The 735 billionaires who call the US home have watched their wealth surge 62% over the last two years, reaching the shocking figure of $4.7 trillion, according to a report by Oxfam America released on Monday.
While the billionaires’ wealth gains show no sign of slowing down, ordinary workers’ earnings have gone up just 10% – meager growth that has been all but cancelled out by hefty increases in the cost of housing, gas, food, and other commodities, with no end in sight to soaring inflation. Many have struggled to rebuild economically after the Covid-19 pandemic lockdowns.
A recent ProPublica study found that while the median American family pays a federal income tax rate of 14%, the 25 richest only paid an effective rate of 3.4% from 2014 to 2018. While there are plenty of different reasons the rich may end up paying less, one major cause is that they don’t report a major chunk of their income – something even the Internal Revenue Service was finally forced to admit last year.
“We estimate that 36% of federal income taxes unpaid are owed by the top 1% and that collecting all unpaid federal income tax from this group would increase federal revenues by about $175 billion annually,” the researchers admitted.
Rather than follow up on that discovery, the IRS continues to audit low-income families – those earning $25,000 or less – at a rate five times higher than any other class of taxpayer, according to an analysis conducted last month by the Transactional Records Access Clearinghouse. The IRS has admitted “such low audit rates are not optimal,” but has thus far declined to address the problem.
While several US politicians have proposed plans to counter the inexorable ‘trickle-up’ draining working class Americans dry, none have made it to a vote. Senator Ron Wyden (D-Oregon) has called for taxing the unrealized capital gains of billionaires, a system that would bring in $56 billion per year in revenues, enough to paid sick leave, family medical leave, and affordable childcare, according to Oxfam’s calculations. California state lawmaker Alex Lee (D-San Jose) has proposed a 1.5% wealth tax on households worth more than $1 billion. Previous attempts to pass such a law in California, home to some of the richest lawmakers in the country, have failed.
At the same time, Oxfam has observed that a global minimum tax on multinational corporations would raise another $63 billion, which the organization argues could fund critical public health needs, including expanding Medicare and Medicaid. While even the Biden administration has backed that idea, it would require the approval of all countries in which the multinationals operate – a difficult consensus to reach on even the least controversial of matters.