How much new revenue could that focus collect? The IRS last October put the overall “tax gap” at $496 billion but cautioned that “the tax gap estimates cannot fully account for all types of evasion.” So we just don’t know exactly how much in taxes our richest are evading.
We do know that in 2019 — the most recent year with data available — only 0.4 percent of taxpayers with reported incomes over $500,000 ended up getting audited.
Two years ago, analysts at ProPublica took a crack at dramatizing just how colossally little the richest among us pay in taxes. Over the five-year stretch that led up to 2019, these analysts noted, our nation’s 25 richest paid a mere $13.6 billion in federal income taxes. Over those same years, our top 25 fortunes grew by $401 billion. Our richest paid, in effect, what “amounts to a true tax rate of only 3.4 percent.”
Subjecting the wealthiest among us to serious audits would certainly help raise that true tax rate. But those among our wealthiest who belong to the Patriotic Millionaires fair-tax group believe we need to do much more than up the rate for audits on our richest. Earlier this week, meeting in Washington, D.C., activists with Patriotic Millionaires unveiled a bold new gameplan — Crack the Code — for thoroughly overhauling how we treat the rich at tax time.
“Money is money is money, whether it comes in through birth into the right family, an investment gain, or a paycheck,” Crack the Code explains, and “should all be taxed at the same rates” at upper income levels. That means everything from taxing capital gains and ordinary income at identical tax rates to replacing the estate tax with an income tax on inheritances equal to the same rate imposed on other types of income, subject to a $1 million exclusion per person.
And how high should the tax rate on high incomes go? Our tax code, Patriotic Millionaires believes, ought to give every American a full “cost of living” exemption from income tax and then impose above that basic cost-of-living benchmark “progressively higher marginal rates of tax” that rise all the way up to 90 percent on annual income over $100 million.
To complete the tax picture, Crack the Code calls for a special new tax to “constrain undue wealth concentration.” Grand fortunes from 1,000 to 1,000,000 times the nation’s median household wealth, Patriotic Millionaires believes, should face an annual wealth tax that ranges from 2 to 8 percent.
“If our economy and our democracy are to survive, we must fundamentally reimagine our tax code,” sums up the Patriotic Millionaires gameplan. “For our future, our grandchildren’s future, and our country’s future, we must tax the rich.”
This content originally appeared on CounterPunch.org and was authored by Sam Pizzigati.
Sam Pizzigati | Radio Free (2023-04-24T05:51:51+00:00) Seriously Auditing the Rich Makes Sense. Seriously Taxing the Rich Can Save Us.. Retrieved from https://www.radiofree.org/2023/04/24/seriously-auditing-the-rich-makes-sense-seriously-taxing-the-rich-can-save-us/
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