Billionaires keep getting richer and richer while many working families are barely able to keep their heads above water and struggle to afford healthcare, childcare, eldercare, education, and housing.
- As of July 25, 2022, America’s roughly 700 billionaires had $4.4 trillion in wealth. They grew $1.5 trillion, or nearly 50%, richer since the pandemic began 28 months ago.
- The gap in wealth between the ultrarich and everyone else has grown so distorted that these roughly 700 billionaires had more wealth than the 65 million households in the bottom half of American society, who are collectively worth $3.9 trillion.
- Billionaire wealth as a share of total American household net worth has risen persistently since 2010. In 2010 billionaires held 2.2% of all wealth, right before the pandemic it had grown to 2.8%, and in 2022 it is 3.5%. (Forbes and Federal Reserve data)
- Billionaire wealth, which is overwhelmingly held by White families, is equal to 70% of the total wealth ($6.3 trillion) of America’s 18.6 million Black households, and is 20% larger than the total wealth of America’s 12.8 million Hispanic households ($3.7 trillion)
- These inequities are partly caused by our unfair tax system, which requires workers to pay income taxes out of every paycheck while enabling billionaires to defer paying income taxes for years—or avoid paying taxes altogether—on the income they generate from their wealth held in corporate stock and other assets.
Billionaires do not pay close to their fair share of taxes and typically pay a lower average tax rate than many working families.
- In multiple years, according to IRS data uncovered by ProPublica, billionaires such as Jeff Bezos, Elon Musk, Warren Buffett and Michael Bloomberg paid zero federal income taxes even as their wealth grew by billions of dollars.
- ProPublica also found that from 2014 to 2018, the 25 wealthiest Americans paid an average effective federal income tax rate of just 3.4% when the growth in their wealth is counted as income.
- The White House found that over a recent nine-year period (2010-2018), the 400 wealthiest Americans paid an average effective federal income tax rate of only 8.2% when the growth in the value of their stock holdings is included in their income.
- The average federal income tax rate for all taxpayers was 13.3% in 2019.
Billionaires are able to avoid paying their fair share of taxes because the rising value of their wealth from assets is not taxed unless those assets are sold.
- Billionaires do not need to sell their assets to turn the increasing value of their wealth into cash income; instead, they use their swelling fortunes to secure special low-interest loans that allow them to live lavishly without paying income taxes.
- A lifetime of such income growth can be passed onto the next generation tax-free.
Billionaires are increasingly trying to buy elections and their influence in elections has grown exponentially since the Supreme Court’s 2010 Citizens United decision.
- Billionaires pumped $1.2 billion into the 2020 elections (not counting the self-funded presidential campaigns of Michael Bloomberg and Tom Steyer), almost 40 times more than the $31 million they donated in 2010, the first year the Citizens United rules were in effect.
- In the 2020 election cycle, billionaires contributed nearly $1 out of every $10, while making up just 0.01% of all donors contributing more than $200.
- Almost half the money (47%)—$89.4 million out of a total of $188.3 million—raised by the two main GOP congressional super PACs through the first 16 months of the 2022 campaign cycle has come from just 27 billionaires.
- Billionaires donated almost $240 million to the combined campaign efforts of Donald Trump’s two runs for president. Over half came from just one billionaire household, that of casino magnate Sheldon Adelson (who has since died).
A special income tax on billionaires will raise hundreds of billions of dollars that can be used to lower costs for working families and make other crucial public investments.
- President Biden’s Billionaire Minimum Income Tax, which has been introduced in the House by Reps. Steve Cohen (TN) and Don Beyer (VA), would raise $360 billion over 10 years.
- The Billionaires Income Tax proposed by Sen. Ron Wyden, chairman of the tax-writing Senate Finance Committee, and Rep. Jamaal Bowman (NY), would raise $550 billion over 10 years.
- This revenue can help lower the costs to working families of childcare, healthcare, housing, education and more. It can help fund solutions for climate change that is threatening our communities with wildfires, droughts and floods.
Polling shows that the American people want this tax—by overwhelming margins.
- Three-fifths (59%) of likely voters support the features in the Billionaire Minimum Income Tax.
- Two-thirds (64%) of likely voters support the features in Wyden’s Billionaires Income Tax, including 61% of Independents. It increases the popularity of President Biden’s Build Back Better economic agenda by up to 40 points in battleground states and congressional districts, especially among undecided independent voters.
Experts agree a billionaires income tax would be both Constitutional and difficult for billionaires to avoid.
- It taxes income from wealth as it is accumulated each year, just like income from wages is taxed in each paycheck.
- Such a tax would annually tax the rising value of assets like corporate stock, which is the main source of billionaire income and goes untaxed for years, decades or even forever.