Bob Lord, a tax policy Senior Advisor for the Patriotic Millionaires, recently published a piece in inequality.org titled “How to Fix America’s Roundabout, Badly Broken System for Taxing our Richest.”
In this piece, Bob contends that the reason the richest in America have never been richer is because the American tax system has failed to place a check on the ultra-rich’s wealth growth.
Over the past four decades, the share of wealth held by the top .01% of Americans has ballooned from 2.3% to 9.6%. Today, these Americans, roughly 13,000 households in total, hold an average $1 billion in wealth.
This has happened largely because the tax code taxes wealth indirectly through income, property, and consumption taxes. Before 1980, this system worked reasonably well to keep a check on the concentration of wealth, but not so much since then.
To reverse the trend that is growing wealth inequality in the United States, Bob argues that we need to take a more direct approach to taxing wealth. He offers three ways to do this:
1) A direct tax on wealth, like that proposed in Senator Warren and Representatives Boyle and Jayapal’s Ultra Millionaire Tax Act
2) A tax on unrealized capital gains, like that proposed in Senator Wyden’s Billionaires Income Tax
3) A strengthened and revitalized estate tax.
The growing concentration of wealth in the handful of a few in America poses an extraordinary threat to our democracy. As the late Justice Louis Brandeis once said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” If we care about the fate of our country, we must do as Bob suggests and start taxing wealth more directly.