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Dear John,
Corporations are like people at least in this one regard: The wealthiest are able to zero out much or all of their tax liabilities.
Between 2018 and 2022, when America’s biggest corporations increased their profits by 63%, a $1.25 billion increase, these same corporations paid just 14% in taxes, a third less than the legal rate of 21%. During the same years, 23 of the nation’s biggest corporations paid an effective tax of zero or less.
So where did these untaxed profits go? They certainly didn’t go to better wages or conditions for workers. No, they’re going straight to shareholders and executives, with 90% of corporate profits going into dividends and stock buybacks, according to Oxfam.
And some 35 companies including Netflix, Tesla, and Ford paid their top five executives more than they paid in federal taxes.
And while most of us dutifully pay our taxes, withheld from our paychecks every month, guess who’s skipping out on taxes and paying a much smaller percentage, if anything at all, every year, legally?
When the top 1%, holding $44 trillion in wealth, make huge gains in the stock market and other investments, the gains are not taxed until they are sold.
But with hundreds of millions, or even billions, in investments, the ultra-rich can completely fund their luxurious lifestyles with low-cost loans, leaving the bulk of their empire untouched. When the heirs acquire the amassed fortune, the monetary gains escape taxation completely.
Now President Biden is proposing tax policies that side with working people, not billionaires and corporations. Tell Congress to follow his lead and finally make the ultra-rich pay their fair share for the greater good.
President Biden’s plans include calls for raising the corporate tax rate from 21% to 28%, and raising the stock buyback tax from 1% to 4%. Also helpful: a 25% tax on the wealth gains of households with over $100 million in assets, establishing an inheritance tax; and continuing to fully fund the IRS to crack down on the wealthiest tax cheats.
In stark contrast, Trump and the GOP seek not only to renew their 2017 tax scam in 2025, but to add yet another round of massive tax cuts, costing Americans $4.2 trillion over the next 10 years.
Such massive cuts would keep Social Security and Medicare constantly at risk. After all, the ultra-rich have no need for them.
How much would ordinary Americans see of this $4.2 trillion windfall? It’s estimated that the 20% of Americans with the lowest incomes would see a whopping 1%.
The richest 20%? They’re set to receive nearly 67%.
Tell Congress to develop tax policies that benefit ordinary Americans, while requiring ultra-millionaires, billionaires, and corporations to finally pay their fair share now.
Thank you for all your work for economic justice!
Robert Reich
Inequality Media Civic Action
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