As Democrats in the Senate continue to debate the final details of what should be included in the Build Back Better Act, we want to take this week to shine a spotlight on why this piece of legislation is so important.
Inequality in the United States and around the world is out of control. The recently-released 2022 World Inequality Report details just how bad this problem has gotten, and the picture it paints is bleak. Congress must act soon to lift up those who are struggling and tax those with more to give. We’re going to examine some key findings from this study undertaken by some of the world’s leading inequality experts – Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman – as well as highlight a few discoveries from other investigative tax research that are relevant in the context of inequality.
A huge study of 20 years of global wealth demolishes the myth of ‘trickle-down’ and shows the rich are taking most of the gains for themselves by Juliana Kaplan and Andy Kiersz
The just-released 2022 World Inequality Report, the culmination of four years of painstaking research, exposes just how large the gaps have grown between the rich and the rest, both within countries and at a global level. One of the most jarring statistics coming out of the report shows that the richest 10% of the world’s population hold 76% of all wealth, while the poorest half of the world holds just 2%. Clearly, the many tax cuts given to the wealthy and corporations over the years have not “trickled down” and benefited everyone else. Instead, they have exacerbated inequality.
As millions fell into poverty during the pandemic, billionaires’ wealth soared by Tami Luhby
As a surprise to no one, the World Inequality Report also found that billionaires did well for themselves over the course of the pandemic. Really well. According to the report, in 2020 billionaires saw the greatest increase in their wealth – roughly $3.6 trillion – in any year on record. This occurred at the same time that the pandemic forced 100 million people into poverty around the world, raising the global poverty total to 711 million people.
These Real Estate and Oil Tycoons Avoided Paying Taxes for Years by Jeff Ernsthausen, Paul Kiel, and Jesse Eisinger
How have the mega-rich been able to get so incredibly rich over the years? According to extensive investigative research done by ProPublica, a few of them – particularly those in the real estate, oil, and gas industries – have grown their wealth by dodging federal income taxes almost entirely. Unfortunately, this is perfectly legal, as the tax code allows for people in these industries to write off business losses in their taxes. Former President Donald Trump is a great example here: as a real-estate mogul, Trump paid nothing – quite literally $0 – in federal income taxes 10 times between the years 2001 and 2015 by claiming huge losses on his various holdings.
When You’re a Billionaire, Your Hobbies Can Slash Your Tax Bill by Paul Kiel, Jesse Eisinger and Jeff Ernsthausen
Another investigative research report from ProPublica reveals that the mega-rich can also escape tax liabilities by writing off losses from… their hobbies. Wealthy Americans can legally write off losses from hobbies and side interests like horse racing, auto racing, ranches, and luxury hotels and pay nothing in federal income taxes because of it. Charlotte Weber, for example, the heiress to the Campbell Soup fortune, has been involved in the horse-racing world for years (unfortunately, she hasn’t been too successful – her horse in this year’s Kentucky Derby finished dead last). She’s gotten $173 million in tax write-offs over 21 years for this particular hobby.