SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
");background-position:center;background-size:19px 19px;background-repeat:no-repeat;background-color:var(--button-bg-color);padding:0;width:var(--form-elem-height);height:var(--form-elem-height);font-size:0;}:is(.js-newsletter-wrapper, .newsletter_bar.newsletter-wrapper) .widget__body:has(.response:not(:empty)) :is(.widget__headline, .widget__subheadline, #mc_embed_signup .mc-field-group, #mc_embed_signup input[type="submit"]){display:none;}:is(.grey_newsblock .newsletter-wrapper, .newsletter-wrapper) #mce-responses:has(.response:not(:empty)){grid-row:1 / -1;grid-column:1 / -1;}.newsletter-wrapper .widget__body > .snark-line:has(.response:not(:empty)){grid-column:1 / -1;}:is(.grey_newsblock .newsletter-wrapper, .newsletter-wrapper) :is(.newsletter-campaign:has(.response:not(:empty)), .newsletter-and-social:has(.response:not(:empty))){width:100%;}.newsletter-wrapper .newsletter_bar_col{display:flex;flex-wrap:wrap;justify-content:center;align-items:center;gap:8px 20px;margin:0 auto;}.newsletter-wrapper .newsletter_bar_col .text-element{display:flex;color:var(--shares-color);margin:0 !important;font-weight:400 !important;font-size:16px !important;}.newsletter-wrapper .newsletter_bar_col .whitebar_social{display:flex;gap:12px;width:auto;}.newsletter-wrapper .newsletter_bar_col a{margin:0;background-color:#0000;padding:0;width:32px;height:32px;}.newsletter-wrapper .social_icon:after{display:none;}.newsletter-wrapper .widget article:before, .newsletter-wrapper .widget article:after{display:none;}#sFollow_Block_0_0_1_0_0_0_1{margin:0;}.donation_banner{position:relative;background:#000;}.donation_banner .posts-custom *, .donation_banner .posts-custom :after, .donation_banner .posts-custom :before{margin:0;}.donation_banner .posts-custom .widget{position:absolute;inset:0;}.donation_banner__wrapper{position:relative;z-index:2;pointer-events:none;}.donation_banner .donate_btn{position:relative;z-index:2;}#sSHARED_-_Support_Block_0_0_7_0_0_3_1_0{color:#fff;}#sSHARED_-_Support_Block_0_0_7_0_0_3_1_1{font-weight:normal;}.grey_newsblock .newsletter-wrapper, .newsletter-wrapper, .newsletter-wrapper.sidebar{background:linear-gradient(91deg, #005dc7 28%, #1d63b2 65%, #0353ae 85%);}
To donate by check, phone, or other method, see our More Ways to Give page.
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
While purporting to be concerned about income inequality, Johnson advocates for proposals obviously intended to benefit his rich benefactors and, worse yet, himself.
If you were a rich Wisconsinite striving to get even richer and you had little regard for intellectual honesty or the well-being of your fellow citizens, you would agree with Sen. Ron Johnson’s remarks at last month’s Senate Finance Committee hearing.
Otherwise, you’d find the senator’s views troublesome, to say the least.
I was a witness at that hearing. Johnson asked me to agree with him that having both an income tax and an estate tax is double taxation. As politely as I could, I pointed out that the income tax and the estate tax are two different taxes. The senator’s argument is no different than saying it is double taxation if an average American, after paying tax on her wages, pays federal excise tax at the pump when she purchases gas.
Unless and until Johnson’s face replaces Roosevelt’s at Mt. Rushmore, I’ll go out on a limb and say we should stick with the tax structure Roosevelt advocated.
Johnson undoubtedly knows better. America has had both an estate tax and an income tax for over a century now. They’re two different taxes. One is an income tax; the other is an excise tax on the transfer of substantial wealth. The specific purpose of the estate tax was to limit the size of America’s largest dynastic fortunes, lest we slip into an aristocracy. The lead advocate for the estate tax, President Teddy Roosevelt, recognized the necessity for both taxes: “The really swollen fortune, by the mere fact of its size,” Roosevelt observed, “acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means.” Therefore, Roosevelt, a Republican like Johnson, advocated for both a “graduated income tax on big fortunes,” and “a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”
At the hearing, Johnson was speaking in support of keeping one of the worst loopholes in the tax code, a provision commonly known as stepped-up basis. It allows the untaxed gains on the investment assets of mega-millionaires and billionaires to escape income taxation entirely, as long as they hold those assets until death. Jeff Bezos, for example, would avoid income tax on over $100 billion of gain on his Amazon shares were he to hold those shares until his death. And if ultra-rich Americans ever need cash, they don’t need to sell highly appreciated assets. Instead, they can borrow against the assets. It’s a strategy known as buy-borrow-die.
Johnson’s true goal isn’t really protecting the ultra-rich from double taxation, though. He actually wants to protect them from any taxation. That’s what the Death Tax Repeal Act of 2023, a bill Johnson and 41 other Republican senators have sponsored, would do. If that were to become law, Mr. Bezos, or any other billionaire, could pass his billions to his inheritors free of both estate tax and income tax on all those previously untaxed gains.
Unless and until Johnson’s face replaces Roosevelt’s at Mt. Rushmore, I’ll go out on a limb and say we should stick with the tax structure Roosevelt advocated. And that requires closing the stepped-up basis loophole.
At the hearing, Johnson did not limit his shilling for the ultra-rich to the stepped-up basis issue. While purporting to be concerned about income inequality, Johnson advocated for proposals obviously intended to benefit his rich benefactors and, worse yet, himself. Were it up to him, for example, our tax law would “index out” inflationary gains. Here’s how that would work for Johnson and his fellow real estate moguls: Say Johnson purchased a property for $10 million with $2 million in cash and an $8 million loan, using the property’s rental income to make the loan payments. Now, say inflation ran at 4% for 10 years and Johnson’s property kept pace. Under his plan, he’d be treated as if he paid $14 million for the property. And if he then sold the property for its $14 million value? He’d have no income tax to pay, but after paying off the loan, he’d have a $4 million profit. Yes, $800,000 of that profit would be attributable to inflation, but the other $3.2 million would be real profit, and it would escape tax entirely if Johnson has his way.
Johnson’s efforts to “address inequality”—yes, he really presented it this way at the hearing—aren’t limited to opposing stepped-up basis reform and advocating for indexing for inflation. He also insists that he and his rich patrons not be taxed on their massive investment gains until they sell assets so they have the “wherewithal to pay.” That would allow the country’s ultra-rich to continue to benefit from the tax-free compounding of their investment gains using the buy-borrow-die strategy. When you do the math, even when the ultra-rich sell long-held investments before they die and pay tax on their gains, the effective annual rate of tax on the growth in their wealth can be less than 5%. With Johnson’s plan to “index out” inflation added to his staunch support of buy-borrow die, that effective rate would be even lower.
There’s no need to guess about whether Johnson believes he’s advocating for good tax policy or is simply carrying water for his billionaire backers (and himself). The record is clear. In 2017, Johnson pushed hard for the so-called “pass-through deduction,” which allows owners of limited liability companies and subchapter S corporations to pay a 20% lower rate of tax on their income. He even threatened to withhold his vote for former President Donald Trump’s tax package unless the pass-through deduction was increased. In 2018, according to reporting by ProPublica, the pass-through deduction generated tax deductions of over $117 million for Dick and Liz Uihlein, the owners of Uline, and over $97 million for Diane Hendricks, the owner of ABC Supply Co. In 2022, according to the Milwaukee Journal Sentinel, Hendricks and the Uihleins contributed at least $22.5 million to Wisconsin Truth PAC, a Johnson-supporting super PAC which spent $24 million on ads attacking Johnson’s 2022 opponent, Mandela Barnes.
Those massive contributions were entirely rational, in a depressing way that reeks of corruption. In 2018 alone, Hendricks and the Uihleins saved just under $80 million in tax as a result of Johnson’s handiwork. His efforts to continue the pass-through deduction past its scheduled 2025 expiration date could net them about $1 billion over the next decade. That $22.5 million they spent on Johson’s 2022 senate campaign may be categorized as a campaign contribution. But when $22.5 million has the potential to enrich you to the tune of $1 billion, it smells a lot more like an investment. And a highly profitable one; the kind only billionaires experience.
With Washington filled with politicians like Ron Johnson, we need more patriotic millionaires. A lot more. To paraphrase our Vice Chair, Stephen Prince, we need more wealthy Americans to step up and say that while they like being rich, they recognize that our tax system has been rigged in their favor for far too long. And we need more politicians fighting to unrig our tax system, not rig it further. We’ll never change the mindset of Ron Johnson and his ilk. The only way to fix this mess is to elect politicians who will outvote them.
Trump-Vance tax agenda of cuts and tariffs stands in stark contrast to the reforms that Walz has shepherded.
As Minnesota Gov. Tim Walz and Ohio Sen. JD Vance prepare to debate this week, it’s worth looking at their approaches to tax policy, a critical throughline that helps determine not only the quality of public services in communities across the country, but also the overall fairness of our economy.
Recent reforms signed by Walz have helped create a moderately progressive tax system in Minnesota, making the state stand apart from most that charge the rich lower tax rates than everyone else.
Our analysis shows that taxes on working-class families declined markedly over the last few years in Minnesota while taxes on high-income people went up slightly.
The most notable changes were signed into law by Walz in 2023 as part of a sweeping tax reform package. Some changes were temporary, like taxpayer rebate checks and expanded property tax credits. But the bill also included important permanent reforms.
In Minnesota, Walz has helped institute a tax system that asks wealthy households and profitable corporations to chip in more to help create a stronger, healthier, more equitable society.
Chief among those was a new Child Tax Credit that is expected to slash child poverty in Minnesota by one-third, according to Columbia University’s Center on Poverty and Social Policy. The link between Child Tax Credits and child well-being is well established, as the financial security afforded by these credits is associated with improved child and maternal health, better educational achievement, and stronger future economic outcomes.
Other tax cuts signed by Walz include expanded exemptions for Social Security income and for student loan forgiveness, plus an extension of the Child Care Tax Credit to newborn children.
To help pay for all this, the 2023 bill included tax increases on high-income people and profitable corporations. Certain tax deductions claimed by high-income filers have been scaled back. Capital gains, dividends, and other investment income over $1 million per year is now subject to a modest 1% surtax. And multinational corporations reporting income overseas now face higher taxes as well, as the state opted to piggyback on a law written by congressional Republicans targeting companies’ “low-taxed income.”
Vance has not been a lawmaker for long and doesn’t have a robust track record on tax policy. The roughly dozen tax-related bills he sponsored or co-sponsored in Congress run the gamut. He has introduced bills that would use the tax code to fight the culture war against colleges, universities, and campus protesters. He’s signed onto several bills that would further enrich the richest, like eliminating the estate tax (which is paid almost exclusively by those inheriting more than $20 million) and making the 2017 Trump tax law’s subsidy for pass-through businesses permanent (which goes mostly to millionaires, who often game the system to extract the largest possible windfalls from this law).
Vance has also introduced legislation to repeal tax incentives for electric vehicles and replace them with tax breaks for buying American-manufactured vehicles, and signed onto a bill to eliminate rebates for upgrading to more efficient appliances. He’s also a co-sponsor of a bill to erode K-12 public schools with private school voucher tax credits.
In August, Vance floated increasing the Child Tax Credit to $5,000 per child for “all American families,” yet details remain scarce. His comments suggest he would make the credit available for many–but not all–the low-income families who currently earn too little to receive it as well as the wealthy families who earn too much (over $400,000). It’s unclear if Vance’s plan would help all low-income families currently left out by the credit’s lack of refundability–he’s never addressed that. While it’s promising that Vance talked about the Child Tax Credit, it’s hard to take his vague proposal seriously–especially after he sat out a vote in the Senate for a bipartisan bill that would have expanded this credit.
On the trail, Vance is hyping up many of his running mate’s tax proposals, including Trump’s tariff tax. This proposal–which would create a 60% tariff on Chinese imports and a 20% one on all other imports–would cost an average middle-class American family nearly $4,000 a year.
The tariff plan is a critical part of the Trump-Vance tax agenda because it’s one of a very small number of revenue raisers in a basket of special interest tax cuts. So, yes, it would help pay for some of those tax cuts (though at an estimated $2.8 trillion raised over the next decade it pales in comparison to the over $9 trillion in revenue loss from proposed cuts). But it would do it in a way that falls hardest on regular families, making our system fundamentally less fair in the process.
That stands in stark contrast to the reforms that Walz has shepherded. In Minnesota, Walz has helped institute a tax system that asks wealthy households and profitable corporations to chip in more to help create a stronger, healthier, more equitable society.
This is the type of tax system that most Americans say they want. It’s also exactly the kind that America desperately needs.
"Over and over again, Republicans in Washington have professed their deep concern about the national debt and yet virtually all of them have signed onto legislation that would provide a $1.8 trillion tax giveaway to billionaires."
Sen. Bernie Sanders on Tuesday unveiled legislation that would hike taxes on estates worth more than $3.5 million as congressional Republicans work to repeal the estate levy entirely—a move that would hand nearly $2 trillion to the wealthiest people in the United States.
The For the 99.5 Percent Act, which Sanders (I-Vt.) unveiled alongside Sen. Elizabeth Warren (D-Mass.) and Rep. Jimmy Gomez (D-Calif.), would impose a 45% tax on estates worth between $3.5 million and $10 million, a 50% tax on estates worth between $10 million and $50 million, a 55% tax on estates worth between $50 million and $1 billion, and a 65% tax on estates valued at over $1 billion.
"This is not a radical idea," Sanders' office said in a press release. "In fact, from 1941-1976, the top estate tax rate was 77% on estates worth more than $50 million."
The new legislation would not impose any new taxes on 99.5% of Americans.
"Over and over again, Republicans in Washington have professed their deep concern about the national debt and yet virtually all of them have signed onto legislation that would provide a $1.8 trillion tax giveaway to billionaires by repealing the estate tax," Sanders said in a statement Tuesday, referring to the GOP's Death Tax Repeal Act of 2023, a bill led by Sen. John Thune (R-S.D.).
Thune's legislation currently has 40 Republican cosponsors, including Senate Minority Leader Mitch McConnell (R-Ky.), whose wife received an inheritance worth between $5 million and $25 million following her mother's death in 2007.
Dozens of House Republicans have also backed legislation that would repeal all federal income taxes and replace them with a regressive national sales tax.
"At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes," said Sanders. "We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks."
According to a summary released by Sanders' office, the new legislation would also target loopholes and inadequate rules that have allowed billionaire families like the Waltons to pass down wealth tax-free.
The bill was introduced with the backing of more than 420 national, state, and local groups, including the AFL-CIO and Public Citizen.
"For years, billionaires and multi-millionaires have gotten away with paying little to nothing in taxes," Warren said Tuesday. "This legislation will help us fix our broken tax system by closing loopholes that the ultra-wealthy use to dodge paying their fair share. Congress should pass this bill so we can invest in working families and build a brighter future for all of our children."
\u201cWe can make our tax system fairer AND raise revenues to ensure we can build a brighter future for all of our kids. It's a win-win-win.\u201d— Elizabeth Warren (@Elizabeth Warren) 1681825163
Citing an estimate from the Joint Committee on Taxation, Sanders' office noted that a previous version of the For the 99.5 Percent Act would have raised $430 billion in federal revenue over its first decade.
The new bill, which faces long odds in both chambers of Congress, was unveiled on Tax Day, an occasion that—as one group put it in a statement earlier Tuesday—serves as "an annual reminder that the ultra-rich exist in an entirely separate world when it comes to taxes."
The For the 99.5 Percent Act is one of several pieces of legislation mentioned by the Patriotic Millionaires in its newly released tax reform agenda, which calls for wealth taxes, a 90% top tax rate on centimillionaires, and other changes to "fundamentally reimagine our tax code."
"For our future, our grandchildren's future, and our country's future," the group said Tuesday, "we must tax the rich."
Survey data released Tuesday by the progressive advocacy group Groundwork Action found that nearly 75% of U.S. voters, regardless of party affiliation, want Congress to prioritize cracking down on wealthy tax cheats and closing loopholes that benefit the rich.
The polling data also showed that 70% of U.S. voters want Congress to "make sure millionaires and billionaires pay more in taxes."
"Voters across the political spectrum are tired of hearing about billionaires and massive corporations paying less in taxes than nurses, teachers, or firefighters, so it's no surprise they're rejecting the Republican agenda of protecting tax breaks for the wealthy at all costs," said Lindsay Owens, executive director of Groundwork Collabortive Action.
"If Republicans want to talk about deficit reduction," Owens added, "Democrats have an easy response: Let's make the wealthiest Americans and biggest corporations pay their fair share before asking workers and families to pay a penny more."