It’s now becoming clear to me that the American wealthy have become even wealthier during the pandemic. A March 29 article by Robert Reich reports that America’s 704 billionaires have increased their wealth by $1.7 trillion since the start of the pandemic in February 2020, while most Americans have struggled just to get by. The super-wealthy have done so well because they’ve bankrolled politicians who alter statutes (such as tax laws) to give them even more wealth. And they’ve hired armies of lobbyists to keep their taxes minuscule and create huge tax loopholes.
These trends continue practices from years past. According to ProPublica, the nation’s 25 richest people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, IRS data shows. That’s a tax rate of only 3.4 percent. Ordinary Americans paid 7.8 percent or more.
The rich have been avoiding taxes for many years. For examples, Jeff Bezos, the richest man in America, reportedly paid no federal income taxes in 2007 and 2011. Elon Musk, the second richest, paid none in 2018. Warren Buffett, often ranking number 3, paid a tax rate of 0.1 percent between 2014 and 2018.
Now President Biden proposes to change all that. The Journal of Accountancy reports that revenue provisions in Biden’s proposed budget include what an administration fact sheet calls a new billionaire minimum income tax of 20 percent on the income of the nation’s wealthiest individuals. The budget also would increase the corporate tax rate from the current 21 percent to 28 percent and institute measures supporting the United States’ participation in a global minimum tax.
It’s not clear to me that Congress will pass the proposed bill taxing the wealthy. But some changes are almost inevitable. It looks like we will at last take some steps to reduce inequity in America.