“It’s time for corporate America and the richest 1% of Americans to start paying their fair share. “For his first address to Congress on April 28, Joe Biden recalled that he had nothing against millionaires and billionaires, but the pandemic, he said,” has only made things worse. things “. While the American economy lost twenty million jobs, “some 650 American billionaires saw their net wealth increase by more than 1000 billion dollars”, for a total value exceeding 4 trillion dollars, he launched.
The figures are taken from the work of the Americans for tax fairness organization and reflect the evolution of Wall Street prices. In total, the cumulative wealth of billionaires in the United States – and therefore held mainly in equities – jumped 55% between March 2020 and April 2021, i.e. an increase in the value of the stock market portfolio of 1.600 billion dollars, to total 4.600 billions of dollars.
Fortunes sans profits
The first fifteen are regulars (Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg …) but the pandemic has revealed fortunes, like that of the French Stéphane Bancel, at the head of the Moderna laboratory, or of Eric Yuan, the boss of Zoom. Among the strongest progressions of the pandemic are also Ernie Garcia father and son, shareholders and, for the last, co-founder of the used car site Carvana: their global fortune has increased tenfold in thirteen months, from 2.4 billion dollars to 24 billion. Without the company having to date made any profits.
“The pay gap between CEOs and their employees is now among the largest in history,” also criticized Joe Biden, with CEOs earning 320 times the average salary of an employee in their company. “The trickle-down economy has never worked and it is time to grow the economy from the bottom and the middle”, now pleads the US president.
The measure proposed by the White House and potentially the most important to make contribute the great fortunes will be, if the Congress adopts it, the increase of the marginal tax rate on capital income, which would go from 20% to 39, 6%. It would thus align with the rate applied to earned income, which would be increased by 2.6 points for the richest 1%. The capital-labor tax alignment measure would apply to those earning more than $ 1 million per year, or 0.3% of households, according to the White House.
Kennedy’s proposal
The other strong measure would be the elimination of a tax niche on inheritance, which allows to pass on to subsequent generations unrealized capital gains tax-free. A political challenge. “The proposals to tax capital gains on death date back to President Kennedy in 1963 and were made by the Ford and Obama administrations,” said the research services of Congress in a note.
The White House has also announced increased scrutiny by the tax services, citing a report according to which the richest 1% failed to declare 20% of their income. The projects of tax increases on the richest must bring in 1.500 billion dollars over ten years. The Treasury will soon publish in a “green book” the details of the evaluations, measure by measure. Enough to feed the debate already started in Congress.
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