“As a member of that 1-percent, 0.1-percent, I can tell you, I can afford a little bit higher taxes and it would make my life better.”Chris Hughes, Economic Security Project
Taxes are how our government raises the revenue necessary to meet its responsibilities to its people. It is also how the government redistributes resources that are produced by the economy it oversees. Clawing back the absurd corporate and individual growth of wealth through the tax code is one way to redistribute economic power back to people of color. Unfortunately, our tax code has become a principal driver of wealth inequality and an essential component of maintaining the Oppression Economy. Through the US Tax Code, elite corporate institutions and the people who control them receive government welfare payments taken from hardworking taxpayers of color. In 2017, this upward wealth transfer was further exacerbated by the passage of the Trump-Ryan Tax Law, which sent 87% of its benefits to the wealthiest 20% of taxpayers. All of this while taxpayers of color received little to nothing. For example, nearly 80% of the benefits from the Trump-Ryan Tax Law went to White households, while a mere 12% went to Black and Latinx taxpayers.
A culprit of this yawning inequality is the tax code’s baked-in preference for previously owned intergenerational wealth. Individuals and companies pay lower taxes on income earned through wealth (such as stocks and bonds) than workers pay on income earned through wages (work for an employer). Further, expenses related to wealth are also used to ensure the wealthy pay lower taxes than those who do not own wealth. For example, a housing subsidy in the form of the Mortgage Interest Deduction is provided to wealthy homeowners to offset their housing expenses in a given year, but the tax code provides no comparable subsidy to offset rental expenses for low-income people whose housing costs are subject to landlords’ whims. The list goes on with wealth ownership in the areas of retirement savings, business ownership, and stock ownership being prioritized and rewarded throughout the tax code.
The corporate welfare state does not end with individuals, it also extends to the multi-billion corporations they control. The elite corporations enjoy a lower tax rate and a complicated array of loopholes to avoid paying taxes to further enlarge their profits. In 2018, 60 companies—including Amazon, General Motors, Netflix, Chevron, and MGM Resorts International—paid nothing in federal taxes (some even received refunds). Depriving the federal government of $20 billion in revenue it needed to meet its responsibilities to its people. We must tax elite corporate institutions and the individuals that control them, help us identify the right policies that will put us on that path. Here are some ideas we have identified so far:
Policies for Consideration
- Institute a wealth tax on corporations and individuals
- Increase taxes on income earned through capital gains and dividends
- Prohibit the hiding of income and wealth to avoid paying taxes (ie. close off-shore tax havens)
- End corporations’ ability to avoid paying their fair share of taxes by closing corporate loopholes