It’s Time For a 100 Percent Tax on Billionaire Estates
July 28, 2019
By Chuck Collins
Since President Trump’s Tax Cuts and Jobs Act was enacted, corporate America and the billionaire class have had a field day. As CNBC recently reported, the beneficiaries of these policies don’t fall that far our of the president’s orbit, let alone his cabinet: Secretary of Education Betsy Devos and her family’s generational wealth have skyrocketed since the policies were signed into law.
At a time when wealth disparity in the United States continues to grow and the lion’s share of the expanding economy moves toward the wealthiest among us, the news that Devos is profiting off the policies of the administration she serves in is anything but surprising, yet wholly counterproductive to a healthy economy and functioning democracy.
I’m watching this trend with personal interest: As the great grandson of the meatpacker Oscar Mayer, like Devos, I had the immense privilege of being born into the 1 percent.
For me, being part of a family that had amassed vast amounts of wealth came with a sense of responsibility, and I knew individual acts of philanthropy wouldn’t be enough alone to reduce the widening chasm between the wealthiest Americans and the rest of the country. That’s why I gave away my inheritance at 26. And that’s why I’ve spent the following three decades mobilizing to create a fairer tax system.
Many wealthy American families, the Devos’ chief among them, are using their considerable resources, political influence and media holdings to help rig the rules of the economy in order to protect and grow their own dynastic wealth. Billionaires are expanding their shares of the pie at the expense of investments in our social safety net, infrastructure, and education systems.
Earlier this year, at the behest of their campaign donors, U.S. Senate Majority Leader Mitch McConnell (R-KY) and Senators Charles Grassley (R-Iowa) and John Thune (R-SD) introduced the Death Tax Repeal Act of 2019, arguing that the estate tax is “an onerous and unfair” tax on “hard-working families.”
Keep in mind that the 400 wealthiest billionaires today have as much wealth as the bottom 64 percent of the US population combined.Three wealthy dynastic families – the Waltons, Kochs and Mars clans – together hold over $348 billion. Since 1983, their wealth has expanded almost 6,000 percent, adjusted for inflation. Over the same period, the median U.S. household wealth has declined 3 percent.
If we are concerned (and we should be) about the health of our economy, strengthening – not eliminating – the estate tax is the solution.That is the kind of policy that will ensure our government represents the average person, rather than becoming a hereditary aristocracy of wealth and power.
When Congress established the estate tax a century ago to put a brake on the build-up of concentrated wealth and power, Supreme Court Justice Louis Brandeis observed, “You can have concentrated wealth in the hands of a few or democracy. But you can’t have both.”
We are hurtling towards a destabilizing level of inequality and bold measures are required. Our elected leaders can’t make the 1 percent be generous, and I wouldn’t recommend holding your breath waiting for Devos to give away her inheritance. But we can require them to pay their fair share.
Democrats in Congress should advocate for a progressive estate tax: with graduated tax rates starting at current levels of 40 percent on wealth over $10 million and rising to 100 percent over a billion. Under current estate tax law, someone with $15 million and $15 billion pay the same rate.
This proposal is not without precedent. In 1936, Franklin D. Roosevelt and Congress instituted an estate tax of over 90 percent to thwart the “economic royalists” of that day.
Not comfortable with 100 percent or even 90 percent? Well, a good first step is to support Senator Bernie Sander’s new estate tax initiative that would levy a 77 percent rate on inheritances over $1 billion.
We are at an inflection point: Do we protect our democracy or become a plutocracy? It’s time to knock the crown off the Devos crowd, so we can build toward an economy that doesn’t serve the interests of a few households.
Posted with permission