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Wealth Tax
At a time when the ultrawealthy are amassing historic and
dangerous levels of wealth, some propose a federal wealth tax. The debt-ceiling
crisis we are facing in mid-March is a direct result of giving tax breaks
to the ultrawealthy. On February 12th House Republicans put forth a draft budget resolution that calls for $4.5 trillion
in tax breaks that would unequally benefit the wealthy while proposing $2 trillion in cuts to Medicaid, Medicare, Social
Security, and SNAP food stamps. While Social Security benefits cannot be cut
through the reconciliation process, Supplemental Security Income (SSI) can.
We have surpassed the 1920s Gilded Age extreme wealth
concentration in The United States. Since billionaires are almost all white and
mostly male, wealth is also highly stratified by race and gender. Today, the
United States has more income and wealth inequality than almost any major
country on Earth.
At a time when millions of Americans are working two or three jobs to
feed their families, the three
wealthiest people in this country (Elon Musk, Mark Zuckerberg, and
Jeff Bezos) own more wealth than the bottom half of all the American people. The U.S. ranks sixth from the bottom among peer nations in the
share of resources spent on public needs (less than a third of GDP). In
contrast, European countries put closer to half of their economy into societal
investments. That’s why European nations have universal health care, universal parental leave, and
lower poverty. These social safety net programs
pay off. People also live longer throughout western
Europe than here.
Over the last 30 years, the top 1 percent has seen a $21 trillion increase in its wealth, while the
bottom half of American society has actually lost $900 billion in wealth. This
is a massive transfer of wealth from those who have too little to those who
have too much. For the sake of our democracy and working families all over
America who are struggling economically, that has got to change.
Wealth Tax as Transitional Measure
One of Vice President Kamala Harris’s policy proposals during
her presidential campaign was a wealth tax—a 25-percent minimum tax on
unrealized gains for taxpayers whose net wealth exceeds $100 million. This tax
could bring in more
than half a billion dollars of tax revenue over the next decade.
While a wealth ceiling has its proponents, I propose a
wealth tax at this point in time. This tax would establish a method for equalizing
the tax burden in this country. A wealth tax would redistribute wealth from
the top .1% to benefit the majority of citizens in this country.
In his State of the
Union address, President Biden proposed changes that would add revenue and
improve tax fairness. The Billionaire Minimum Income Tax would
phase in for those with wealth over $100 million, requiring that they pay at
least a 20 percent tax rate on all income including unrealized capital gains.
Currently, the morbidly wealthy can accumulate capital gains and pay no taxes
if they don’t sell their assets. Correcting this could raise over $350 billion over a
decade from only the extremely wealthy.
A wealth tax is one path toward reducing the federal
deficit, which
sits at an all-time high of more than $35 trillion. But it is not without
its challenges.
1. Wealth
can be difficult to measure, as some of it exists in illiquid assets such as real
estate and collectibles.
- To pay
the taxes, taxpayers who are cash-poor yet asset-rich, may have to sell
assets.
- Taxpayers
may leave the country to go where there is no wealth tax as happened when
Norway instituted a wealth tax.
4. The
morbidly rich are able to evade taxes, so a wealth tax would be only another tax
they are able to get out of paying.
Even with all these potential pitfalls, it is my contention
that a 20-25% wealth tax is the optimal method to equalize the tax burden on US
taxpayers. It would end the budget reconciliation passed by the House in which
social programs like Medicaid and Snap food stamps would be cut $2 trillion through
2034. At stake is coverage for roughly 79 million people enrolled in Medicaid
and its related Children's Health Insurance Program. So, too, at risk is the financial health of thousands of
hospitals and community health centers — and a huge revenue source to all
states.
The resolution also authorizes the Ways and Means Committee
to increase the deficit by $4.5 trillion over the same time period — this is
the “instruction” that allows the committee to craft
legislation to pave the way for the proposed tax cut for the wealthy of this
same amount.
Medicaid covers Americans from the beginning of life to the
end — paying for 4 in 10 births and care costs
for more than 60% of nursing home residents. The
program operates as a state-federal partnership, with the federal government
paying most of the money and matching state funds regardless of how many people
enroll.
What is Prout?
I call this wealth tax a transitional measure because the
reality of the situation is that now, during tax season, 6000 IRS agents are
slated to be fired by the Elon Musk DOGE (Department of Government Efficiency),
presumably so that they will not be there to collect taxes from the wealthy,
who are most likely to be audited for tax evasion. However, focus needs to be
set on rescinding these cuts.
What we really need is a society which is based on the
social welfare of all citizens, not on the upper tenth of one percent billionaire
class. Prout (Progressive Utilization Theory) is a socio-economic system
created by Prabhat Rainjan Sarkar in 1959. Prout is about economic democracy as
well as political democracy. It’s based on Neohumanist philosophy, which encourages
respect and love for all beings and the environment. The decentralization of
wealth is a key point in a Prout economy. It is achieved by supporting local
cooperatives and industry to meet the needs of communities, making them
self-sufficient. A democratically restructured Prout economy is based on
cooperatives, private businesses, and government-run large-scale utilities.
In Prout, all minimum necessities of life; food, housing,
health care, and medical care, is guaranteed to all people. A minimum and
maximum wage is created, to ensure that the purchasing capacity of all people
is constantly increasing with 100% employment of citizens. After meeting the
basic needs of all individuals, the excess of capital would be given to
individuals, depending upon their service to society. The economy would be focused
more on the bottom up, rather than top down, with elected boards governing
locally. A strong national government would administer programs that help make
localities strong and prosperous.
It is time for a more drastic measure like a wealth tax. I realize
that such a proposal in this country or anywhere else is not something that
will be popular and easily adopted. However, it is the best course of action to
create equality of wealth and opportunities for all to live the life we all
want to see. Everyone wants to be free
of struggling to make ends meet, and to be able to have the opportunity for the
‘life, liberty, and pursuit of happiness’ that the US Constitution sets out for
all citizens. We can achieve this wealth
equality through the implementation of a wealth tax. Then we need to consider
an alternative to capitalism. Prout is that viable alternative.
Notes:
https://www.commondreams.org/news/house-budget-resolution
https://prout.info/to-tax-the-rich-or-to-cap-wealth-that-is-the-question/
https://toolstochangetheworld.org/modules/level-1/3-the-wealth-cap/
https://poole.ncsu.edu/thought-leadership/article/the-pros-and-cons-of-wealth-taxes/
https://thehill.com/opinion/finance/4782461-wealth-tax-supreme-court-decision/
https://proutglobe.org/2011/10/the-wealth-cap-and-other-practical-proposals-for-reducing-inequality/
https://berniesanders.com/issues/tax-extreme-wealth/
https://ips-dc.org/report-billionaire-bonanza-2018/
https://itep.org/worried-about-the-debt-tax-the-rich/
