The collective wealth of the seven richest Americans has now reached nearly $ 1 trillion. And these seven pay practically nothing in income tax.
According to Forbes, the total net worth of these seven men – Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin, and Larry Ellison – was $ 996 billion on August 25.
That’s a group that’s small enough to fit in an SUV.
Think about it. Only seven men now control a fortune of about $ 1 trillion – that’s about a third of the $ 3.5 trillion package now being tabled in Congress for much-needed programs ranging from dental and vision care to Seniors to child tax credits to rescue millions of families out of poverty and actions that can save our burning planet from climate change.
Some demonize these social expenditures as “unaffordable”. But it turns out a third of the bill could be covered by the fortunes of just 0.0000022 percent of the US population – seven guys in one SUV.
The deeper connection between the wealth of our “trillion dollar seven” and those $ 3.5 trillion in welfare spending: Whether that spending actually becomes a reality is likely to depend on the voices of the so-called political moderates who insist that the programs be implemented must be “paid”. “
The same moderates will hold the deciding vote on the “pay-fors” proposed by social spending advocates: raising taxes on the enormously rich in the country, including the seven trillion dollars.
And that brings us back to how we got into this mess in the first place.
ProPublica recently revealed what many of us have already suspected: Our $ 7 trillion – and their billionaires – barely pay taxes as a percentage of their true income. Between 2014 and 2018, America’s top 25 billionaires paid just 3.4 percent of the increase in their collective wealth over the same five-year period.
Can we change this dynamic?
Yes, but to do this, these political moderates must agree to end the tax avoidance strategy – “buy-borrow-die” – which allows billionaires and the merely super-rich to evade taxation on the enormous profits they make on their investments.
This scam is really very simple. The rich buy an investment or, in the case of the $ 7 trillion, start a business. Then when their asset goes up, they never sell. Instead, they borrow against the increased value of their assets whenever they need cash.
Eventually they die, and with each death the tax liability disappears on any profit that is not taxed, sometimes for an entire adult life.
What makes the buy-borrow-die strategy possible? The gaping loophole in our tax law known as the “tiered base”. Under this loophole, those who sell inherited assets are treated as if they had bought the assets at fair value on the day of the death of the deceased owner.
The bottom line: If Jeff Bezos’ children inherit his Amazon stock, about $ 200 billion in profits will not be taxed at all.
Our political leaders have been aware of the worsening base gap for decades but have done nothing while the super-rich are using buy-borrowing dies to amass obscene piles of untaxed wealth.
But the Biden administration is now calling on Congress to end the reinforced base funding the programs we need to move our country forward. Will our lawmakers now have the courage to tax the seven trillion dollars?