Joe Biden announced a series of measures to make the richest pay “their fair share,” noting that 650 billionaires have grown richer by $ 1,000 billion in one year. Is he right ?
Yes. The American tax system today looks like a huge “flat tax” with an effective tax rate of 28% for all groups of the population, all taxes and all levels of government included, with an exception for billionaires, who are taxed around 23%. Regressive taxation at the top of the income distribution which can be explained: it is very easy for billionaires to organize themselves to generate little taxable income. Jeff Bezos, Mark Zuckerberg, Elon Musk, Warren Buffet, Sergei Brin, Larry Page …: six of the top ten billionaires in the Forbes 400 ranking are major shareholders of listed companies that do not distribute dividends, are paid a low salary and do not sell their shares, thus limiting their taxable income. They consume “tax free” with loans, with their actions as collateral as for Elon Musk for example. This situation of fiscal injustice is combined with an explosion in wealth since the 1980s, which has further accelerated with the Covid: the fortune of American billionaires today represents 19% of the GDP of the United States, against 9% there is ten years old and 2% in 1982.
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