Why Biden's Plan To Tax The Super Rich Is Moving From Unlikely To Likely: RR
- 'Why Biden's plan to tax the super rich is moving from unlikely to likely.' And why it's really really important. By Robert Reich, April 5, 2022. -Ed.
America is on the cusp of the largest inter-generational transfer of wealth in history. As wealthy boomers expire over the next three decades, an estimated $30 trillion will go to their children. Those children will be able to live off of the income these assets generate, and then leave the bulk of them – which in the intervening years will have grown far more valuable – to their own heirs, tax-free. After a few generations of this, almost all of the nation’s wealth will be in the hands of a few thousand family dynasties.
Unless Joe Biden’s new tax plan is enacted — the odds of which is moving from unlikely to likely. I’ll explain in a moment.
Dynastic wealth runs counter to the ideal of America as a meritocracy. It makes a mockery of the notions that people earn what they’re worth in the market, and that economic gains should go to those who deserve them. It puts economic power into the hands of a small number of people who have never worked but whose investment decisions have a significant effect on the nation’s future. And it is antithetical to democracy. We are well on the way. Already 6 out of the 10 wealthiest Americans alive are heirs to prominent fortunes. The Walmart heirs alone have more wealth than the bottom 42% of Americans combined.
The richest one tenth of one percent of Americans already owns almost as much wealth as the bottom 90%.
- Monopolists overlook the U.S. Senate, cartoon. The Gilded Age of Robber Barons, 1890.
The last time America faced anything comparable occurred at the turn of the last century, in the first Gilded Age. Then, Pres. Teddy Roosevelt warned that “a small class of enormously wealthy & economically powerful men, whose chief object is to hold & increase their power,” could destroy American democracy. Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916 & the capital gains tax in 1922. Since then, both of Roosevelt’s taxes have been eroded by the moneyed interests. As the rich have accumulated more wealth, they have amassed more political power- which they’ve used to reduce their taxes. By now, the estate tax affects only a handful of super-wealthy families that are busily setting up “dynastic trusts” to circumvent what’s left of it. And the capital gains tax has been defanged by what’s known as the “stepped-up-basis-at-death” loophole. More on this in a moment.
Last week Joe Biden unveiled 2 tax proposals that would revive Teddy Roosevelt’s original vision, & could possibly slow or even reverse America’s march toward oligarchy: (1) a minimum income tax that Biden calls a billionaire tax but would in reality apply to households with a net worth of $100 million or more, and (2) a separate tax at death on gains from appreciated assets, even if the assets are not sold. The odds are growing that at least one of these proposals will get through the Senate in April or May via “reconciliation” requiring only a bare majority (i.e., all 50 Democratic senators plus the vice president). I’m told Joe Manchin is mostly on board (which means the other Democratic holdout, Kyrsten Sinema, will sign on as well).
Let me go into a bit of detail on each:...https://robertreich.substack.com/p/why-bidens-plan-to-tax-the-super
________
- Cartoon showing Gilded Age American industry titans Cyrus Field, Jay Gould, Cornelius Vanderbilt, & Russell Sage, seated on bags of "millions," on large heavy raft made of low wages & high prices being carried by workers.
- GILDED AGE. In US history, the Gilded Age was an era extending roughly from 1870 to 1900. It was a time of rapid economic growth, especially in the Northern and Western United States. As American wages grew much higher than those in Europe, especially for skilled workers, and industrialization demanded an ever-increasing unskilled labor force, the period saw an influx of millions of European immigrants.
The rapid expansion of industrialization led to real wage growth of 60% between 1860 and 1890, and spread across the ever-increasing labor force. The average annual wage per industrial worker (including men, women, and children) rose from $380 in 1880, to $564 in 1890, a gain of 48%. Conversely, the Gilded Age was also an era of abject poverty and inequality, as millions of immigrants—many from impoverished regions—poured into the United States, and the high concentration of wealth became more visible and contentious.
Railroads were the major growth industry, with the factory system, mining, and finance increasing in importance. Immigration from Europe, and the eastern states, led to the rapid growth of the West, based on farming, ranching, and mining. Labor unions became increasingly important in the rapidly growing industrial cities. Two major nationwide depressions—the Panic of 1873 and the Panic of 1893—interrupted growth and caused social and political upheavals... https://en.wikipedia.org/wiki/Gilded_Age
= new reply since forum marked as read
