“Get me taxes. We millionaires should pay more taxes, to begin with, because we have more money. I do not want to live in a world with a small group of very rich people and a lot of poor people. The US used to be the ray of hope in the world, now we are the ray of greed. We have corrupted the system so that the wealthiest pay less taxes than the middle class.”
To imagine a Spanish millionaire saying any of those phrases is like imagining a Spanish politician resigning. These are things that, simply, hardly happen in our society. But it is happening in the country that many identify as the symbol of capitalism: United States.
A group of 400 US millionaires has been asking the US Congress for months not to lower their taxes after the brutal reduction that Donald Trump has already done.
“Any reform of taxes should not increase inequality but benefit the economy, and this violates both points”, points to El HuffPost Mike Lapham, leader of ‘Responsible Wealth’ (responsible wealth), a program that develops and proposes alternatives for reduce inequality.
Mapham, a wealthy heir to a stationery company that became an activist by seeing the gap between his and his employees, believes that with the Trump downgrade “to the banks, the multinationals and the millionaires will do very well, they will bathe in a paste they do not need, they have never lacked.”
The millionaires believe that whenever they touch on taxes in Washington, be they the Democrats or the Republicans, they favor them. “And that’s something quite peculiar,” says one of them.
The video has been shared by Bernie Sanders, who lost the primary against Hillary Clinton for being too “socialist” for the US and later many pointed out that he could have defeated Trump.
The US is one of the countries with the most inequality between the richest and the poorest. And it is in one of the moments of its history in which that gap is more pronounced. 1% of the population controls 35% of wealth , a percentage that never stops growing.
Why does it not stop increasing the wealth of the most affluent? Among other reasons, because each time they pay less taxes.
According to data from ‘Americans for Tax Fairness’ (Americans for Tax Justice), the richest in the US paid a maximum tax rate of 91% in the decades of the 50s and 60s of the 20th century, the greatest period of economic splendor in the United States. country. Now it is officially 43.4% and many reduce or avoid it by pulling legal loopholes, foreign investment or directly taking it to tax havens.
ALMOST ALL THE MONEY OF THE RICHEST TAXES TO 15%
“The system already favors the super rich, we have reached a point where, if you are a millionaire, you pay less taxes.” Most of the money from the great fortunes comes from capital gains (disposition of shares, bonds or real estate), which taxed at 15%, “explains Lapham.
That is why the rich with a social conscience have organized themselves around platforms like his and have asked Trump to raise taxes to reduce the national deficit. Among the signers are the owner of Ben & Jerry’s, the billionaire George Soros and the philanthropist Steven Rockefeller.
Most of those who have signed up to this initiative live in California, New York or Massachusetts, mostly Democratic states, and belong to 5% of the population earning more than $ 250,000 a year or have more than 1 million in assets.
THERE IS NO EVIDENCE THAT INCREASING TAXES DISINCENTIVE THE ECONOMY
Although Trump defends his policy as a way to stimulate economic activity, progressive millionaires do not agree and consider that rich people will not invest more because they lower taxes, they will only save and possess even more.
In addition, a video economics professor adds that “there is little or no evidence that raising taxes discourages economic activity.” Lapham goes further: “In fact, the opposite is true: the more money the state collects to invest, the more the economy of a country is stimulated,” he says.
He adds: “And the rich are the ones who benefit most from these public investments.”
The other initiative in favor of raising taxes is Patriotic Millionaires (Millionaires Patriots), which define themselves as “proud traitors of their class”. Its members are richer than those of ‘Responsible Wealth’: they must earn more than a million dollars a year and / or own more than five million in assets.
IT HAS NOT BEEN SOLD WELL WHAT IT MEANS TO RAISE THE TAXES
Lapham believes that the biggest obstacle to reducing inequality is that progressive parties have not sold well the idea of raising taxes, but is “optimistic” to look to the future. “I think that in the Trump era people will react against the lack of protection of the State,” he says.
“Nobody likes to pay more, not the rich, they take advantage of all the deductions they can, if you ask people: ‘Do you want a tax reduction?’ They will inevitably say yes. budget item that gives anger pay, “he says.
“But if you explain it as an exchange, if you ask: ‘Do you want a tax cut or do you prefer a good public education, roads in good condition, quality inspections of food and water?’ Most people are very willing to pay to have all of that, “says Lapham.
“Now we are losing but the future trend plays in our favor. Have things worse in the last year in the US? Yes. But if we look back 200 years, we see that things are much better than then, ” he told The HuffPost Morris Pearl, president of ‘Patriotic Millionaires’.
“On the other hand, (the economist) Thomas Piketty assures that the rich will continue to enrich themselves, just to start with a little more money, the children of the rich end up being much richer than those of the poor. of capitalism, “laments Pearl, who left his mark on Wall Street and was the CEO of BlackRock, one of the most important investors in the world.
REAGAN MARKED THE BEGINNING OF BRUTAL INEQUALITY
The rich not only ask that they do not lower taxes, but eliminate the legal loopholes that allow to hide the great fortunes and raise them to return to the maximum interest rate “of the time of Ronald Reagan”, the political guru of the neoconservatives.
Precisely, the Reagan presidency marks the beginning of the enormous increase in inequality experienced by American society (and most Western countries), according to experts, for its financial policy favorable to investors, large companies and fortunes.
“During the Reagan presidency, the maximum rate was much reduced, the message was that if you put more money in the hands of the rich, they would create more employment, but the reality is that there is no correlation between both and that the tax rebates are not paid alone, “says Lapham.
Pearl, in fact, believes that Reagan’s “demonization of the state” was what started the debacle. “It made most Americans believe that the fact that people organize and choose a representative is, in some way, harmful.” So, as now, the prevailing idea is that people who act independently do so. well and that collective action is bad, “he laments.
NOT ONLY THE MONEY, ALSO THE POWER SHOULD BE DISTRIBUTED
In their letter, the millionaires of ‘Responsible Wealth’ believe that it is part of the general interest they pay more, since they worry that the tax cuts will affect important items such as education, research, infrastructure or social security programs for the most disadvantaged.
The ‘Patriotic Millionaires’ defend that all who work full time should be able to pay for basic needs and therefore ask for an increase in the minimum wage and for large companies and fortunes to pay more taxes, adding that not only wealth should be shared but also the power.
In ‘Americans for Tax Fairness’ they go further: they demand that the rich tax at a minimum rate of 30% so that they never pay less than most citizens, that the profits derived from investments tax like wages and suggest raising the equivalent to the inheritance and donation tax.
THE DEMOCRATIC STATES REJECT AGAINST THE COLLECTION OF TAXES
Trump has boasted on Tuesday of his tax rebates to groups of farmers, although the decreases are more pronounced in the sections that affect higher incomes. In the process, he has made a mistake and has five times the money supposedly saved by the beneficiaries.
The tax cuts were made at the expense of regional and local taxes, the amount of which can not be deducted in excess of $10,000. According to the US press, it is a hard blow to those who earn the most in the populated states with high taxes, which are usually Democratic.
California is trying to rebel against Trump’s measure by arguing in court that a state is like an NGO. Will they be able to backtrack on what Trump proudly called “the biggest tax drop in US history” (even if it were not)?
Translated to English. Read the original full article, in Spanish on El Huffpost