In case you missed it (and we hope you didn’t), yesterday was Tax Day in America. It was the last day for millions of Americans to file their federal, state, and local tax returns for the 2021 fiscal year.
Most Americans dutifully pay their fair share in taxes by the tax filing deadline every year but, unfortunately, there is one group of people that notoriously does not: America’s 735 billionaires. In June of last year, ProPublica reported that, between 2014 and 2018, the 25 richest Americans paid a mere 3.4% effective tax rate on more than $400 billion in gains while the rest of the country paid an average tax rate of 13.3% on their income. To make matters worse, they also found that some of the richest of the rich, including Elon Musk, Jeff Bezos, Michael Bloomberg, and Carl Icahn, at times got away with paying nothing at all in federal income taxes.
We wanted to use this year’s Tax Day to bring more attention to billionaires and their tax avoidance schemes. To do this, we created a mobile billboard, with Jeff Bezos and his infamous superyacht as inspiration, and drove it around New York City and Washington, D.C. for all to see.
Our friends at Americans for Tax Fairness also used Tax Day to shine a spotlight on billionaires. They released a new bombshell report that exposes how America’s richest were able to expand their fortunes over the past two years of the pandemic. Specifically, they found that billionaires increased their wealth by $2 trillion, or 70%, between March 2020 and April 2022, putting their collective worth at a whopping $5 trillion. America’s biggest billionaire, Elon Musk, took home the lion’s share of this pandemic wealth bonanza as he increased his worth by $266 billion, or 1080%.
It is beyond belief that billionaires could expand their already-outsized fortunes during a public health crisis that involuntarily forced millions of Americans into poverty and unemployment. But what adds insult to injury here is that most members of the American pandemic billionaire crew will pay next to nothing in taxes on these gains. This is because most billionaire wealth is tied up in capital gains, which are only taxed when investors decide to liquidate them and, when they do, they’re taxed at a lower rate than ordinary income.
This has to change. It is high past time that billionaires in America are forced to make bigger tax returns. Elon Musk, Jeff Bezos, and Mark Zuckerberg cannot be allowed to profit from our collective social infrastructure – our schools, roads, bridges, police forces, courts, and more – and then turn around and pay nothing for it in return like the rest of America does. If we want to restore some semblance of fairness to our tax code and our economy, then we need to start by making billionaires pay their fair share in taxes.
Thankfully, there are already policy solutions in play that Democrats can enact to tax billionaires more effectively. President Biden’s Billionaire Minimum Income Tax and Representative Bowman’s Babies Over Billionaires Act (introduced last week), which propose taxing unrealized capital gains on a regular, annual basis, are two such initiatives that would go a long way in making billionaires pay their fair share every year on Tax Day.
Democrats must now do whatever is necessary to pass these proposals, especially before the political window of opportunity potentially closes with the upcoming 2022 midterm elections. West Virginia Senator Joe Manchin may prove to be an obstacle here, but it is imperative that Democrats do whatever is necessary to sway him before it’s too late.
We don’t know of any American that particularly likes Tax Day – not even us! But paying taxes is a necessary part of living in society and it’s about time that billionaires start doing it every year like the rest of the country does.
