Yesterday, we teased that we would be sharing a forthcoming solution to the way our tax code unfairly pits our money against your sweat. Today, we’re happy to share what we’ve been working on to reach this very important moment.
Earlier today, a number of our members joined Congresswoman Delia C. Ramirez (IL-03) on Capitol Hill to introduce the Equal Tax Act. This landmark piece of legislation makes the tax code more equitable by taxing investment income at the same rate as ordinary labor income and by closing the stepped-up basis and other common loopholes used by the wealthy to avoid paying their fair share. It’s the first of four pieces of legislation that make up our legislative platform, The MONEY Agenda: America 250, that puts working people at the center of economic policy.
Here we are with Congresswoman Ramirez at our press conference to announce the introduction of the Equal Tax Act.
You can watch a full recording of the press conference here. (Remarks begin at the 9:35 mark.) Also be sure to check out our posts on X, Bluesky, Threads, Facebook, Instagram, and LinkedIn.
The Equal Tax Act would ensure that millionaires and billionaires, who earn most of their money passively through investments, pay the same tax rates as newspaper reporters, dental hygienists, and auto mechanics. Remember what we said yesterday: every dollar that we make through our investments is worth more than every dollar most Americans make at their jobs because, as it’s currently written, the federal tax code taxes ordinary labor income at a higher rate than capital income.
The legislation would also close a number of loopholes that allow the wealthy to avoid paying what they owe the country in taxes. This includes the stepped-up basis, which, if you remember, gives wealthy inheritor families the opportunity to avoid tax completely on capital income.
In full, the Equal Tax Act does the following:
- Limits the lower preferential tax rate for long-term capital gains and dividends to incomes under $1 million. The bill maintains the preferred rate for working people who may have money in a 401(k) or the like. The higher tax will only apply to the first dollar over $1 million.
- Ends the stepped-up basis loophole and disrupts the “buy, borrow, die” strategy used by the wealthy to avoid taxation by treating capital gains as realized at the time of gift or death, with exclusion allowances of up to $1 million in gains.
- Enacts a lifetime limit of $1 million on the use of like-kind exchanges on real estate gains.
- Limits the pass-through deduction to incomes under $1 million.
- Offers very generous protections for family farms and small businesses.
The preferential treatment of capital income over labor income is both intellectually indefensible and grossly unfair. Money is money is money is money—or at least it should be—regardless of how you make it. That’s why the Equal Tax Act is so important.
Here’s another reason why. Inequality in America has reached historic, democracy-destabilizing heights. And when one kind of money is taxed less than another, growing inequality is baked into our society by the math. That’s a recipe for disaster, because inequality—when it reaches a certain level—leads by definition to authoritarianism. And if the events of the last few days and weeks have told us anything, we are already there in America.
To beat back the oligarchical coup that’s currently threatening everything we hold dear in America, we must advance a new vision for the economy. We must structure the economy so that it naturally delivers more stable, more equal outcomes. That starts by treating income the same regardless of how you make it. We’re glad to have done our part by working with Congresswoman Ramirez to introduce the Equal Tax Act today to make it happen.