Pro Publica report on tax evasion gives Dems an opening
The world probably did not hear the shot. The buzz was confined to the media, which is good because the report had more than a few errors. Their definition of "true income" is false and not usable in calculating taxes owed. Share values are not real things. They shift with the wind. For example, once the world realizes that few, if any, read the ads on Facebook, his company is worth nothing unless he makes it a subscription service (paid either by users or the Internet providers who host the site).
There are more than a few problems with the ProPublica report. I wrote about them at https://fiscalequity.blogspot.com/2021/06/taxing-borrowed-wealth.html
For the record, I do not pay income taxes. One third of households do not because they are poor or old (or both). Even when I was paying over the last few years, the payment only covered the amount of IRA withdrawals over the standard deduction. Most retirees will say the same thing (unless they hold Roth IRAs, in which case they paid nothing).
Jeff Bezos pays a lot of taxes, by the way. It all depends on your point of view (and his). For the reality of the situation, see https://fiscalequity.blogspot.com/2021/06/plutocratic-taxes.html
The ProPublica article's purpose is to support a wealth tax. A wealth tax is like a human life amendment. Indeed, taxing wealth would like require a new amendment. The idea is attractive to partisans but the chances of enactment are slim. The majority of Democratic leaders at the precinct level, the donors and even the voters weighed in on the idea. Neither Warren nor Sanders is now president. The reason Biden is president and Trump is not may owe itself to the rejection of a wealth tax. That was certainly what Democratic primary voters thought. I am glad we did not test the assumption. Republican voters crossed party lines to vote for Biden, especially in open primary states like Virginia. They also came out in November,.
Getting money for infrastructure and social democracy is not the only aim of tax policy. A big reason that income and inheritance taxes were proposed was to shift the ownership of the means of production to the workers themselves. The wealth tax is exactly the wrong way to do it. The solution is something called an Asset Value Added Tax, which marks all gains and distributions (including to CEOs and heirs) to market, with avoidance possible only if the shares are sold to employees. THAT is a concept worth pursuing.
If a value added tax on goods and services is also enacted, there is no avoiding taxation, including when the rich borrow money from their shares. When they buy, they pay. Tax dodges like life insurance and Individual Retirement Accounts also lose their power if VAT must be paid anyway. This is why rich people hate the idea of a VAT.
When you buy something, you pay the taxes for those who provide the good or service. Then it is not Bezos who pays the taxes, it's the consumer. In that case, the rich, who have the economic power to have other people pay their freight, will simply offload the tax to the employees, shareholders and customers. It all depends on your point of view.
There is no need for massive retooling. The structures to do infrastructure are already there. No new companies will be created to take care of our infrastructure deficits. They may not even hire any more people. Providing more money for daycare may help parents go back to work, but good tax policy would also support them not having to work at all. In both cases, taxing billionaire wealth is not the appropriate funding stream. The market can make that plutocratic wealth vanish in a day. Families cannot rely on it. A tax paid by drivers is best for infrastructure and one paid by employers is best for services to families.
The details are important.
