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oligarch act
Pass the OLIGARCH Act to Save the US From Oligarchy
The act offers a powerful mechanism that can break the vicious cycle of unchecked wealth accumulation we now find ourselves trapped inside: a wealth tax tied directly to our level of inequality.
Aug 23, 2023
The United States is experiencing a level of wealth inequality not seen since the original Gilded Age. This yawning gap between rich and poor has unfolded right out in the open, in full public view and with the support of both political parties.
A malignant class of modern robber barons has amassed unthinkably large fortunes. These wealthy have catastrophically impacted our politics. They have weaponized their wealth to co-opt, corrupt, and choke off representative democracy. They have purchased members of Congress and justices of the Supreme Court. They have manipulated their newfound political power to amass ever-larger fortunes.
The result? We can sum that up with a word usually associated with nations like Russia: oligarchy. Unless Congress takes action, inequality—and the instability inequality invariably produces—will only intensify.
Those of us working with Patriotic Millionaires see the OLIGARCH Act as more than just a piece of legislation. We see it as a statement of purpose, a declaration that the American people will not stand idly by and watch the principles we hold dear erode away.
The Patriotic Millionaires have been sounding out the alarm, over recent years, on inequality and oligarchy. More than most, our members—all men and women of substantial means—understand just how much wealth can buy. Wealth can even turn tax systems toxic.
In well-functioning democracies, tax systems serve as a firewall against undue wealth accumulation. By that yardstick, our contemporary U.S. tax system has failed spectacularly. Those of us in Patriotic Millionaires have witnessed that failure first-hand. Our nation’s current tax practices allow and even encourage obscene fortunes to metastasize while saddling working people with all the costs of that metastasizing. Years of this approach to taxation have hollowed out our middle class and our democracy.
Congress can change all that. Enter the OLIGARCH—Oppose Limitless Inequality Growth and Reverse Community Harms—Act. The architects of this legislation, led by Representatives Barbara Lee (D-Calif.) and Summer Lee (D-Pa.), have crafted a visionary approach to combat the existential threat to democracy we all now face. The OLIGARCH Act offers a powerful mechanism that can break the vicious cycle of unchecked wealth accumulation we now find ourselves trapped inside. That mechanism: a wealth tax tied directly to our level of inequality.
Enacting the OLIGARCH Act would create a dynamic tax structure that quickly responds to changes in our distribution of national wealth. The OLIGARCH Act’s elegantly straightforward solution builds upon a set of tax rates that escalate as a wealthy taxpayer’s wealth escalates:
- A 2% annual tax on wealth between 1,000 and 10,000 times the median household wealth.
- A 4% tax on wealth between 10,000 and 100,000 times the median household wealth.
- A 6% tax on wealth between 100,000 and 1,000,000 times the median household wealth.
- An 8% tax on wealth exceeding 1,000,000 times the median household wealth.
As inequality swells, in other words, the wealth tax would intensify, in the process acting as both a deterrent to wealth concentration and an antidote to it. As inequality recedes, our economic playing field would become more level. All of us would find ourselves better situated to flourish.
The OLIGARCH Act legislation also recognizes our fundamental need to counter tax evasion among the wealthiest households. By mandating a minimum 30% audit rate on ultra-rich households and instituting penalties for significant valuation understatements, the OLIGARCH Act would fortify our nation’s capacity to shut down tax manipulation and evasion.
We’ve reached a tipping point in our nation today. Extreme wealth is begetting extreme power, in turn begetting even more extreme wealth. The resulting stranglehold our richest hold over our democratic institutions has led to a government that caters to billionaires while working citizens struggle to make their voices heard. This imbalance doesn’t just weaken the integrity of our democracy. This imbalance emboldens extremist ideologies that thrive whenever masses of people become politically disillusioned.
We face a stark choice. Will we allow a handful of individuals to wield their wealth like a weapon against our nation’s bedrock principles? Or will we rise to the occasion, defend our democracy, and reaffirm our commitment to a society that offers real opportunity and disperses power—instead of letting that power concentrate among a fabulously wealthy few?
Those of us working with Patriotic Millionaires see the OLIGARCH Act as more than just a piece of legislation. We see it as a statement of purpose, a declaration that the American people will not stand idly by and watch the principles we hold dear erode away. We see the OLIGARCH Act as a call to action that asks each and every one of us to join the chorus demanding change. By urging our congressional representatives to co-sponsor and pass this transformative legislation, we pave the way for a future where democratic capitalism thrives, inequality recedes, and the American way of life endures.
Safeguarding our democracy, today more than ever, requires us to address the catastrophic—and rapidly growing—inequality that’s empowering a new aristocratic ruling class. To do anything less than challenge that class would leave our democratic institutions to the whims of America’s oligarchs. The stakes run that high.
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Group of Wealthy Americans Warns US Democracy 'Will Not Survive' Unless Rich Are Taxed Heavily
"For my future, my grandchildren’s future, and our country’s future, we need to tax the rich," said Morris Pearl, chair of the Patriotic Millionaires.
Apr 18, 2023
A group of rich Americans marked Tax Day on Tuesday by calling on the U.S. Congress to aggressively tax wealthy people like themselves, warning that the U.S. will remain in a state of "perpetual chaos" until lawmakers boldly confront the worsening inequality crisis.
"Tax Day isn't just a filing deadline—it's also an annual reminder that the ultra-rich exist in an entirely separate world when it comes to taxes," said Morris Pearl, chair of the Patriotic Millionaires, an advocacy group that supports progressive taxation.
"For us, the loopholes are bigger, the rates are lower, and many rules are entirely optional," Pearl, a former managing director at BlackRock, continued. "The tax code has been contributing to growing inequality for decades, and we're reaching a point where the concentration of wealth is simply unsustainable. We need a change, or our economy and our democracy will not survive. For my future, my grandchildren’s future, and our country’s future, we need to tax the rich."
Ahead of a Tuesday morning event on Capitol Hill, which will feature Rep. Pramila Jayapal (D-Wash.) and other progressive lawmakers, Patriotic Millionaires released a tax reform agenda that calls for, among other changes, a 90% top marginal tax rate for people with annual incomes above $100 million and a federal tax exemption for people who earn less than a "cost-of-living wage."
The group also proposed legislation titled the Oppose Limitless Inequality Growth And Restore Civil Harmony (OLIGARCH) Act, which would create a progressive wealth tax structure aimed at countering the vast concentration of fortunes at the very top.
Patriotic Millionaires explained that the bill would establish "wealth tax bracket thresholds based on multiples of median American household wealth."
"The bracket thresholds are set at 1,000, 10,000, 100,000, and 1,000,000 times median household wealth, with marginal rates at 2, 4, 6, and 8 percent respectively," the group said. "It will wax and wane with wealth concentration, intensifying during periods of extreme inequality when wealth at the top is increasing faster than wealth in the middle, and tapering off to near non-existence when median household wealth increases and inequality moderates."
Erica Payne, founder and president of Patriotic Millionaires, said in a statement Tuesday that the heavily skewed U.S. tax code contains "the seeds of our destruction."
A massive trove of Internal Revenue Service documents obtained by ProPublica last year showed that the 25 richest Americans—including Amazon founder Jeff Bezos and Tesla CEO Elon Musk—paid an average true tax rate of just 3.4% between 2014 and 2018 in large part because unrealized capital gains from stock appreciation are not taxed.
Patriotic Millionaires on Tuesday called for a Billionaire Minimum Income Tax that would "impose a minimum tax on a wealthy household's true economic income, including unrealized capital gains, thereby eliminating the incentive for billionaires to hoard assets and avoid selling, and instead live on low-interest personal loans."
"Elites over decades have broken the social contract," said Payne. "The only way to restore stability to this nation, the only way to fix this country, is to tax this country appropriately. That includes 90% tax rates on centi-millionaires and an aggressive wealth tax designed to make billionaires less rich."
According to an Oxfam America analysis published last week, U.S. billionaires have gotten 86% richer over the past decade, with $37 of every $100 of wealth created between 2012 and 2021 going to the top 1%. The bottom 50% only received $2 for every $100 of wealth generated during that period, according to Oxfam.
"Tax Day is a reminder that the tax system isn't working for ordinary Americans. It's built to favor the richest in our society," said Nabil Ahmed, Oxfam America’s Director of Economic Justice. "The ultrawealthy are sitting on mountains of wealth that remain largely untouched by taxes, and their wild riches are in no small part a result of intentional public policy."
"We need to implement strategic wealth taxes if we want to stand any chance at reining in this kind of Gilded-Era wealth inequality that allows the super-rich to have a stranglehold over our economy," Ahmed added.
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Joe Manchin Just Proved Why We Need the OLIGARCH Act
We need to ensure that the richest people in the country can no longer subvert the overwhelming will of voters by buying the goodwill of elected officials.
Jul 19, 2022
Last week, Senator Manchin blindsided his Democratic colleagues when he reversed course on his previous demands that their agenda be focused on tax reform and declared that he would not vote to raise taxes on the rich or massive corporations. In doing so, he dashed Democrats' hopes to pass any sort of meaningful tax legislation before November. He also ironically proved, by showing the country just how shamelessly he is controlled by his wealthy donors and peers, just how important it is for us to tax the rich.
With so much wealth floating around in our political system, politicians are incentivized to follow the whims of their wealthy donors and ignore the wishes of the average American or West Virginian (both of whom overwhelmingly support raising taxes on the rich).
It all comes down to money and the power it buys. With so much wealth floating around in our political system, politicians are incentivized to follow the whims of their wealthy donors and ignore the wishes of the average American or West Virginian (both of whom overwhelmingly support raising taxes on the rich).
So how do we fix this? The problem of money in politics pre-dates Citizens United. However, in that case the Supreme Court, an institution captured by a long-term political project of many of those same special interests, ruled that, barring Constitutional amendments or a dramatically different set of judges, we cannot limit how much money the powerful can dump into corrupting the political system. So the only vehicle left is to constrain the wealth that fuels it.
Earlier this month, the Patriotic Millionaires, an organization of hundreds of wealthy "class traitors" who are fighting to reduce economic and political inequality, introduced a new proposal we're calling the Oppose Limitless Inequality Growth and Restore Civil Harmony (OLIGARCH) Act, which would directly address the source of the flood of dirty money taking over our electoral system.
The OLIGARCH Act is an annual tax on extreme wealth, based on how rich someone is compared to the wealth of the median American household. It would have four brackets: 2% on wealth between 1,000 and 10,000 times median household wealth, 4% on wealth between 10,000 and 100,000 times median household wealth, 6% on wealth between 100,000 and 1,000,000 times median household wealth, and 8% on wealth over 1,000,000 times median household wealth. Currently, someone would need to have over $120 million in wealth to pay a penny of this tax.
While it would raise plenty of revenue, that's hardly the point. This proposal is designed to reduce inequality, and constrain "runaway" wealth- wealth that is so great living expenses or lifestyle spending won't meaningfully slow its growth.
This is the kind of wealth that can destabilize democracy. People with this level of wealth can fund endless political campaigns to protect their own self interest. They can spend hundreds of millions on media efforts and ads and propaganda campaigns. They can buy up local news networks, talk radio channels, and fund entire media outlets to permeate the airwaves and internet with their talking points and misinformation, and use them to gin up hatred against immigrants, LGBTQ+ Americans, women, and other vulnerable groups to distract from their own accumulation of more wealth. In short, it's the kind of wealth that is already creating an American Oligarchy.
That Oligarchy kicked into action when Senator Manchin indicated he was enthusiastic about reversing Trump tax cuts and taxing the rich. It's the driving force behind the phone calls and fundraiser conversations from the Senator's fellow yacht owners and coal-mine investors. It's what funds the dark money political groups and corporate PACs who used some combination of threats, ego stroking, and (technically legal) bribes to convince him it was time for a change of heart.
Taxing wealth is the only way to meaningfully constrain inequality and its destabilizing effect on our Democracy, and our tax code's traditional focus on income as the primary source of personal taxes does not impact the uber-wealthy who are able to declare little to no income while their overall wealth skyrockets. We need to ensure that the richest people in the country can no longer subvert the overwhelming will of voters by buying the goodwill of elected officials. Inequality is destabilizing our Democracy, and it's time to use the tax code to attack it head on.
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