A plan to tax billionaires like Elon Musk is dead — for now. Why should it be revived?

The United States is home to nearly 700 billionaires – More than any country.

When a so-called billionaire income tax, which would have required people in that demographic to pay annual taxes on their assets (such as stocks) that increase in value, was proposed to help fund President Joe Biden’s spending bill, some were quick to rank it. It’s the latest progressive stunt or shall we say the bill was”dead on arrival. “But tackling this kind of wealth tax is necessary — and it is Something Democrats have been working toward for nearly four decades.

Richer Americans pay only a small percentage of taxes as a proportion of their income compared to the rest of the United States.

The suggestion was Left out of the social spending framework released by the White House on Thursday, So it may seem like a lost cause, but just giving it up would be a mistake for several reasons.

First, it will make our tax system less regressive – meaning the more people earn, the less they pay in taxes – and more progressive. A tax like this would reduce the stark income inequality. Let me paint a picture for you: When a worker – say, a waiter or teacher – earns a dollar in wages, a certain amount of taxes is withheld. This is how most of us live. However, when a billionaire makes (no) money on capital gains—that is, when the value of their stock increases—normally no money is withheld, and the gain is taxed at a rate lower than that for the waiter or teacher.

Here’s why there’s so much hype around this issue: The richest Americans pay only a small portion of taxes As a percentage of their income compared to the rest of us. that Analysis from White House Economists It estimated that the 400 richest families paid, on average, roughly 8% of $1.8 trillion in federal taxes between 2010 and 2018. Elon Musk and Jeff Bezos.) That’s much less than the average American pays, which is about 14.6 percent, according to Tax FoundationIt is an independent nonprofit tax policy organization. As it stands, our tax code is descending.

Seems like a bad contrast, right? Well, that’s right. However, a so-called billionaire income tax could fill this loophole.

Second, revenue from this tax can be directed to Biden Rebuild better The plan, which includes infrastructure improvements, paid family leave, free lunch programs, subsidized daycare, clean energy, and lower prescription drug costs. In fact, according to the American advocacy group Americans for Tax Justice and the Progressive think tank in Washington, the Institute for Policy Studies, American billionaires have acquired more than $2.1 trillion during the Covid-19 pandemicWhich is enough to pay 60% of the cost of Biden’s plan. Therefore, taxing these wealthy people is an opportunity to generate revenue and direct it towards the greater good. It’s a step to Expand your social safety net and improving the lives of most working-class Americans and their families. Who wouldn’t want that?

Finally, the majority of Americans seem to be interested in this kind of thing. One of the recent polls pointed out 3 out of 5 voters support higher taxes on the wealthy and corporations to fund investments such as schools and community colleges. Another poll of the summer Nearly 70 percent of Republicans showed they responded that they were bothered by the feeling that the wealthy and giant corporations were not paying their share in taxes. Unbelievable, plan beyond party boundaries and Supported by the general public? It must be done. What is the problem?

Some, including tax experts, said this new tax system would be really complex and difficult to implement. (Honestly? It couldn’t be harder than The complicated current way of doing taxes right now.) Besides, research shows that a Wealth tax will work can stimulating the economy In many ways, generating revenue for important social programmes.

Others questioned whether the move was constitutional, because while the Constitution gives Congress the power to levy taxes, it states that “direct taxes” (for which there is no clear definition) must be allocated by the states, with each resident paying a share equal to that of the state’s residents. Senate Finance Committee Chairman Ron Wyden, Democrat, who proposed the legislation, made it clear that income taxes should not be left to the state to deal with — and clearer The tax on billionaires is on income, not wealth. Since the definition of “direct taxes” is vague, no one should jump to the conclusion that taxing billionaires is unconstitutional.

Even with all this, it seems the billionaire’s income tax is no longer on the table. From the start, the discussion about how we pay for all social services has been in Biden’s proposal. We got a viable solution that lawmakers were too afraid to touch.

Unfortunately, elected officials were unable to agree to put the needs of the American working class above partisan politics, and to work together to advance the billionaire tax proposal — including eliminating any potential pitfalls. But that’s no reason not to bring it back to the table at the first available opportunity.

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