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billionaire tax
How US Taxpayers Helped Elon Musk Become the Richest Man on Earth
Now it's time to tax it back to where much of it came from.
Oct 19, 2024
Once upon a time, here in the United States, we taxed the rich. Significantly. Today, by contrast, we’re actively enhancing their fortunes. Including the biggest personal fortune of them all, the quarter-trillion-dollar stash that belongs to Elon Musk, the current numero uno on the Forbesreal-time list of the world’s largest fortunes.
Musk owes a hefty chunk of his own personal fortune to the taxes average Americans pay. He just happens to be, notes a just-published Politico analysis, “the single biggest beneficiary of U.S. government contracts.”
Two of Musk’s commercial operations, Tesla and SpaceX, have received billions in American taxpayer support. The federal government, Politico points out, has essentially “outsourced its space program” to SpaceX, and Tesla, a shaky electric vehicle company when Musk bought it, only “took off after receiving $465 million in subsidies from the Obama administration in 2010.”
All the tax dollars that Musk has collected from the Defense Department, NASA, and the U.S. intelligence community — coupled with the “generous government subsidies and tax credits to the electric-vehicle industry” that have so boosted Musk’s Tesla — have Council on Foreign Relations senior fellow Max Boot fairly fuming.
Taxpayers like himself, Boot notes, are subsidizing the “fire hose of falsehoods” that now appear on X, the former Twitter, the social media app that Musk bought for $44 billion two years ago. Our tax dollars have essentially supersized our world’s single wealthiest individual.
Back in the middle of the 20th century, the United States took quite a different approach to the money pouring into rich people’s pockets. From the early 1940s through the mid-1960s, the incomes of America’s richest faced a tax bite that would be unimaginable today.
In 1942, then-president Franklin Roosevelt proposed a 100 percent tax rate on income over $25,000, the equivalent of about $484,000 today. Congress wouldn’t go along with that 100 percent top rate. But lawmakers did give the okay to a 94 percent top tax rate on 1944 income over $200,000.
In the 1950s, under the Republican president Dwight Eisenhower, the federal tax rate on top-bracket income never dipped below 91 percent.
Today’s top-bracket federal income tax rate? That stands, on paper, at 37 percent on income over $693,751 for a couple filing jointly. But assorted loopholes have left the tax rate the rich face on their actual annual gains enormously lower.
In 2021, a joint report from the Biden administration’s Office of Management and Budget and Council of Economic Advisers calculated that America’s wealthiest 400 billionaire families, between 2010 and 2018, “paid an average of just 8.2 percent of their income” — counting the gains in the value of their investments — in federal individual income taxes.
“That’s a lower rate,” the report noted, “than many ordinary Americans pay.”
Could we ever get back to anything close to Eisenhower-era tax rates on the richest among us? This past March, the Biden administration proposed a 25 percent minimum tax on the total income — including unrealized capital gains — of the nation’s top 0.01 percent, households worth at least $100 million.
About the same time, progressive lawmakers — led by U.S. senator Elizabeth Warren of Massachusetts and representatives Pramila Jayapal from Washington State and Brendan Boyle from Pennsylvania — introduced the Ultra-Millionaire Tax Act, legislation that would impose a wealth tax on America’s 100,000 wealthiest households, our richest 0.05 percent.
Under this proposed legislation, wealthy households worth up to $1 billion would face an annual tax of 2 percent on their wealth over $50 million. Richer households would face an additional 1 percent tax on wealth over $1 billion.
One of the Senate co-sponsors of that legislation, Vermont’s Bernie Sanders, has also gone a step further and called for a 100 percent tax on wealth over $1 billion.
“I think people can make it on $999 million,” Sanders told journalist Chris Wallace last year.
Sanders and one of America’s most famous deep pockets, Bill Gates, have actually had a friendly podcast discussion over whether our tax rates should allow billion-dollar fortunes to even exist. The Sanders proposal, noted Gates, would tax away over 99 percent of his personal fortune. Gates would be willing to let the IRS take 62 percent, about $100 billion.
For a better America, that certainly might make a good place to start.
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Ending Oil Subsidies, Taxing the Rich Could Help Free Up $5 Trillion a Year for Climate
"The real question isn't whether we can afford to act, but whether we can afford not to."
Sep 24, 2024
Research published Tuesday estimates that rich countries could mobilize over $5 trillion a year for climate action worldwide by cutting off subsidies to the oil and gas industry, imposing a levy on big polluters, and cracking down on tax evasion by large corporations and the rich.
The new report from Oil Change International (OCI) was released as world leaders gathered in New York City for high-level United Nations General Assembly talks, a meeting that comes less than two months before the COP29 climate summit in Azerbaijan.
OCI's research, which includes a fact sheet outlining various proposals to raise funds for climate action, stresses that "there is no shortage of public money available for rich countries to pay their fair share on fair terms for climate action at home and abroad."
"The urgency and extent of growing economic inequality, unfair sovereign debt crises, climate disasters, and fossil fuel profits have created significant momentum towards many of these measures in international and domestic policy spheres," OCI's research brief notes. "Finance has been in the spotlight in most major international political fora in the past few years in recognition that our current financial architecture is a major driver of these overlapping crises."
Among the proposals laid out in OCI's brief are an equitable end to "public finance, direct subsidies, and state-owned company investments in fossil fuels," which could raise $846 billion a year globally; a "climate damages tax" on fossil fuel extraction, which could raise $618 billion a year; a 25% minimum corporate tax rate, which could raise $479 billion annually; and a wealth tax on billionaires, which could raise roughly $2.60 trillion a year in the Global North and over $5.6 trillion worldwide.
Laurie van der Burg, OCI's public finance lead, said that the rich nations most responsible for the climate emergency "owe this money to Global South countries that have not caused this crisis and need fair finance to deliver strong climate plans next year that phase out fossil fuels."
"This is essential to avoid climate breakdown and save lives," she added.
The clock is ticking ⏰ Rich nations must deliver a roadmap for at least $1 TRILLION/year by 2025. No more empty promises. It's time to pay up for a just transition! 💚
Read the full report: https://t.co/eKwm0zXits pic.twitter.com/4qjTO5JQ8c
— Oil Change International (@PriceofOil) September 24, 2024
The COP29 climate summit will take place a year after nations agreed at COP28 to transition "away from fossil fuels in energy systems" in a "just, orderly, and equitable manner."
The success of that pledge, OCI said, depends on rich nations contributing massively to global climate finance after years of falling short of their pledges and continuing to expand fossil fuel extraction and handouts. Worldwide, environmentally harmful subsidies—including fossil fuel subsidies—have surged to $2.6 trillion a year, according to a report released last week.
"Global North countries have a responsibility to redirect their share of these subsidies in support of climate action," OCI said Tuesday.
The new report comes on the heels of a record-hot summer and amid devastating extreme weather, from massive flooding across Europe and Africa to wildfires in South America.
Andreas Sieber, associate director of policy and campaigns at 350.org, said Tuesday that "the real question isn't whether we can afford to act, but whether we can afford not to."
"It is a bitter irony that rich nations hide behind claims of fiscal restraint, yet trillions are still spent on fossil fuel subsidies and militarization," said Sieber. "The truth is simple: the money exists, but the political will does not. By treating climate finance as a zero-sum game, wealthy countries not only deepen global inequality but also undermine their own futures."
"The energy transition isn't charity—it's an investment in global stability and security," Sieber added. "Ignoring the need for support only worsens the climate crisis, which knows no borders."
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'Let's Go!' Top Economist Applauds as Harris Signals Support for Billionaires Tax
Gabriel Zucman, a leading authority on tax evasion by the rich, welcomed news that Kamala Harris' presidential campaign is embracing proposals to tax the ultra-wealthy and large corporations.
Aug 20, 2024
An economist at the forefront of the growing global push for a billionaire wealth tax is welcoming news that U.S. Democratic presidential nominee Kamala Harris is embracing calls for a minimum levy on the United States' richest individuals.
"Let's go!" Gabriel Zucman, an economics professor at the University of California, Berkeley, wrote Tuesday in response to Semaforreporting on the Harris team's endorsement of taxes on ultra-wealthy individuals and large corporations proposed in President Joe Biden's budget for Fiscal Year 2025.
Semafor highlighted a "little-noticed portion" of an analysis released late last week by the Committee for a Responsible Federal Budget, which wrote that Harris' campaign "specifically told us that they support all of the tax increases on the high earners and corporations that are in the Biden budget."
That budget blueprint includes a 25% minimum tax on billionaire wealth, much of which is unrealized capital gains that are not currently subject to taxation. A recent analysis by Americans for Tax Fairness estimated that U.S. billionaires and centi-millionaires collectively held at least $8.5 trillion in unrealized capital gains in 2022—a massive untapped source of federal revenue.
U.S. billionaires have seen their collective fortunes grow by more than $2 trillion since former President Donald Trump—the GOP's 2024 nominee—signed into law massive tax breaks for the rich and big corporations. Trump has campaigned on extending the deeply regressive and unpopular tax cuts and slashing rates for large companies even further.
Surging billionaire wealth at a time when roughly two-thirds of Americans are living paycheck-to-paycheck has amplified calls for a minimum tax on the richest Americans. Zucman noted in a May New York Times piece that in 2018, U.S. billionaires paid a lower effective tax rate than working-class Americans for the first time in the nation's history.
"The idea that billionaires should pay a minimum amount of income tax is not a radical idea," Zucman wrote in May. "What is radical is continuing to allow the wealthiest people in the world to pay a smaller percentage in income tax than nearly everybody else."
Polling has shown that a 25% tax on billionaire wealth is extremely popular with U.S. voters across the political spectrum. A survey in March of last year by Data for Progress found that 87% of Democrats, 68% of Independents and third-party voters, and 51% of Republicans back the idea.
A spokesperson for the Harris campaign confirmed to NBC News on Monday that in addition to backing the push for a minimum tax on billionaires, the vice president supports raising the corporate tax rate from 21% to 28% as a way to help finance parts of her broader economic agenda, which includes an expanded child tax credit and substantial assistance for first-time homebuyers.
The campaign spokesperson called the move—which would still leave the corporate tax rate lower than it was when Trump first took office in 2017—a "fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share."
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