Conventional economic wisdom says a time of crisis is not the moment to enact tax increases. But, as Eric Toder at the Tax Policy Center recently pointed out: “[Tax experts] can begin to think of the time after the pandemic passes and how government should respond to massive increases in the public debt, and the new tax increases that Congress will need to enact to fund them.”
Initial tax increases should hold harmless working- and middle-class families who will be the most economically vulnerable coming out the pandemic. The first several trillion in new revenue should come from America’s wealthiest households, those who have seen their taxes slashed over past decades.
At the top of the list of new tax increases should be a wealth tax on our billionaire class.
A new Institute for Policy Studies Inequality briefing paper, authored by Bob Lord, reveals that between 1980 and 2018, the taxes paid by America’s billionaires, when measured as a percentage of their wealth, decreased a staggering 79 percent.
The only appropriate metric by which to measure the tax burden on billionaires, the briefing paper explains, is the rate of tax they pay on their wealth. Unlike the rest of us, the living expenses of billionaires do not constrain their accumulation of wealth. Nor do they rely on their work to generate additional wealth. For billionaires, the accumulation of wealth is driven forward almost exclusively by the growth of their existing wealth and constrained almost exclusively by the tax they are required to pay. No matter how the taxes imposed on billionaires are determined — by income, consumption, property ownership, transfers by gift or bequest — they function only as a tax on wealth.
By allowing the tax burden of billionaires, as a percentage of their wealth, to plummet since 1980, policy makers have caused the nation’s wealth to concentrate obscenely at the very top. In the 12 years between 2006 and 2018, IPS reports, nearly 7 percent of America’s real increase in wealth, measured in 2018 dollars, went to the top 400 billionaires. If the pattern of the past four decades does not change, an even greater share of the nation’s newly created wealth over the next 12 years will flow to the billionaire class.
As we emerge from this pandemic with trillions of additional debt on the nation’s balance sheet, substantial tax increases are inevitable. Early out of the box should be a 10 percent surtax on the incomes of the top 0.1 percent of households, including on capital income. We should also strengthen the estate tax to limit the intergenerational transfers of wealth of billionaires. But central to the program should be a tax that limits the further accumulation — that is, hoarding — of wealth by the billionaire class. That, the IPS report concluded, requires a wealth tax:
Only an annual wealth tax — a direct tax on billionaire wealth — can reliably limit the Billionaire Class rate of wealth accumulation to a level no greater than wealth accumulation for the population at large. Other forms of taxation have valid purposes. But to rein in the Billionaire Class we need something more. And rein in we must.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $120,000 in one-time donations and to add 1383 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
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With gratitude and resolve,
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