More than 200 millionaires say they have a message for business leaders and billionaires attending the World Economic Forum in Davos this week: “Tax the ultra-rich.”
The group, which includes actor Mark Ruffalo and Disney heiress Abigail Disney, argues that the rich are not paying their fair share, allowing them to get even richer as inequality widens around the world.
Meanwhile, a group of lawmakers in seven states plan to introduce bills this week that would increase taxes on the wealthy, The Washington Post reported. The states include California, Connecticut, Hawaii, Illinois, Maryland, New York and Washington.
The push for higher taxes on the rich comes as the US heads for an economic crisis after hitting its current $31.4 trillion debt ceiling on Thursday. This figure represents Treasury Department borrowing to fund financial obligations, from social safety net programs like Social Security to military budgets and infrastructure spending. The number has skyrocketed from $24 trillion since President Donald Trump’s tax cuts in 2017, which primarily helped the wealthy and corporations lower their tax burden.
“Eating Our World Alive”
“Extreme wealth is eating our world alive,” Abigail Disney said in a statement. “It undermines our democracies, destabilizes our economies and destroys our climate.”
She added: “But for all their talk about solving the world’s problems, Davos attendees refuse to talk about the only thing that can really make a difference – taxing the rich.”
According to a new report by Oxfam, Patriotic Millionaires, the Institute for Policy Studies and the Fight Inequality Alliance, creating a federal US wealth tax could bring in more than $583 billion annually, revenue that will be used to boost spending on education by nearly half could be released on Wednesday.
The group is calling for a new progressive wealth tax that would include a 2% tax for those with net worth of $5 million or more, 3% for those with $50 million or more, and 5% for those with $1 billion in net worth. adds dollars or more. “Tax the ultra-rich and do it now,” read a letter signed by the 200 millionaires.
World Economic Forum warns of global ‘polycrisis’ in next decade 06:07
The rich get richer
The benefits of the growing economy have largely sunk to the richest Americans, according to the new report.
Over the past decade, the wealth of the richest 1% of Americans has grown 19 times faster than the bottom half of the population. On a dollar basis, that means $37 out of every $100 went to the top 1%, while the bottom 50% received $2, she found.
The US has about 64,500 people with assets of more than $50 million and 728 billionaires, from Elon Musk to Jeff Bezos.
While the report focuses on the wealth of wealthy individuals, corporations have also benefited from former President Trump’s tax cuts in recent years.
The average effective tax rate for large, profitable companies, or the percentage of income paid after tax breaks, fell from 16% to 9% in 2018, the first year the tax cuts went into effect, according to a new report from the US Government Accountability Office, a watchdog of the Government.
The Effects of Extreme Wealth
About 7 in 10 economists believe inequality is increasing globally because of tax cuts for the rich, according to the new report, which polled 135 economists in 40 nations. About the same proportion believe the rich pay lower taxes relative to their income than the average citizen in their country, the report added.
The latter was a critique of the US tax system, with a 2019 analysis by economists Emmanuel Saez and Gabriel Zucman finding that the 400 wealthiest US families enjoy a lower overall tax rate than the middle class. The wealthy have been helped by the 2017 Tax Cuts and Employment Act and lower tax rates on capital gains, including investment gains, compared to earned income.
Such an inverted tax system harms the nation’s economic stability and social cohesion, Chuck Collins, board member of Patriotic Millionaires, said in a statement. It also makes it harder for the US to generate revenue, he added.
“Our failure to effectively tax the rich makes things much, much worse,” he said.