This past Monday was Tax Day, which is undoubtedly no American’s favorite holiday. But the pain of Tax Day is not shared by all. While the typical American pays a good amount of every paycheck in taxes and hopes to get a refund after submitting their return, the ultra-wealthy have a variety of tools at their disposal that allows them to keep Tax Day virtually stress-free.
Tax Day is also an annual reminder to us all that our tax code is fundamentally unfair because the wealthy are taxed fundamentally differently from working Americans. Forget tax loopholes and illegal tax evasion – the truly outrageous tax avoidance is all completely legal.
But it doesn’t have to be this way. With this year’s Tax Day behind us, it’s time that we strengthen our resolve to reform our tax code and finally make the wealthy in this country pay their fair share. This week, we’re showing how the rich manipulate their money to avoid as much tax as possible, and how that behavior sticks the rest of America with the bill.
How The Rich Leverage Their Knowledge Of Taxes by Toby Mathis
In a tale as old as time, the obscenely rich do everything in their power to skirt taxes on their annual gains. One of the most important ways they do this is by earning capital gains rather than ordinary income. As it stands today, capital gains are taxed only when investors decide to sell assets, and when they do, they are taxed at a lower rate compared to ordinary income. This tax discrepancy between earned income and passive forms of income is exaggerated further when you look at the way profits on assets like real estate are taxed.
Opinion: On Tax Day, Let’s Talk About Making Sure Elon Musk and Other Billionaires Pay Their Fair Share by Dean Obeidallah
It’s no secret that Elon Musk’s wealth (and the wealth of billionaires like him) has skyrocketed in recent months. Musk has become so wealthy that he apparently has $40 billion to throw around in a bid to buy Twitter, which begs the question: How is it that someone like Musk gets away with paying a far lower effective tax rate than working Americans? Because his growing wealth is largely in unrealized capital gains, he pays almost nothing in taxes until he sells his stock. The solutions to this problem of unchecked billionaire wealth are clear: we need either a wealth tax, an annual tax on unrealized capital gains for billionaires, or both.
Tax Day 2022: We Need to Tax the Rich — Now by Lexi McMenamin
Most Americans navigate the murky waters of manually filing their tax returns on their own every year, hoping they haven’t made any mistakes and praying they don’t get audited. The rich, on the other hand, have no such stress. For them, the complexity of the tax code is a blessing, because it allows them to manipulate their earnings to keep traditional income low and other forms of income high, and hire expensive tax lawyers to find and exploit every possible loophole. But while complexity and a tax code riddled with loopholes may help the rich avoid taxes, it’s hurting the country.
The Billionaire Minimum Income Tax Is Popular by Jason Katz-Brown
President Biden’s proposed Billionaire Minimum Income Tax is one solution to closing these loopholes and stopping billionaires from moving their money around to avoid paying up. It would enact a minimum 20% tax on the increased wealth of the ultra-rich, whether it’s in ordinary income or unrealized capital gains. This policy is wildly popular, with significant support from even a majority of Republicans. But while people from across the political spectrum understand that we need major reform to make the rich pay their fair share, rich political donors have convinced Congress to not pass the Billionaire Minimum Income Tax. Money talks, and Members of Congress listen. If we want real reform, we need to make the people’s voices even louder.
