Why Don’t Billionaires Pay the Same High Tax Rates the Rest of Us Pay? – Investment Watch

by Charles Hugh-Smith

The reality is America has misplaced its approach if commoners pay a fee of 40% however its billionaires pay subsequent to nothing.

As with every part else in polarized America, billionaires proclaiming area tourism is the following massive factor for humanity neatly divides opinion into two camps: those that laud the initiative, laborious work and improvements of the billionaires as examples of the American Can-Do Dream, and those that wished the billionaire area vacationers had taken a one-way flight to a distant orbit of blissful silence.

Setting apart that bitter divide, let’s discover one other divide: how our two-tier tax system permits billionaires to turn into billionaires whereas the remainder of us get poorer. At any time when I focus on the taxes of the non-billionaire self-employed, armies of apologists leap to the protection of the established order with numerous quibbles: the 0.9% Medicare surcharge solely kicks in above $200,000, the cap on Social Safety taxes is $142,800, and so forth.

Setting apart the quibbles–and recall the tax code with regulatory notes is hundreds of pages–let’s cope with the actual subject, which is that billionaires and their companies pay a skinny slice of taxes as a share of complete revenue/beneficial properties in the event that they pay any in any respect, whereas self-employed and small enterprise pay terribly excessive tax charges.

To all of the quibblers: please add the 15.3% Social Safety/Medicare tax fee (self-employed / sole proprietors pay each the worker and employer share of this tax) to the federal tax fee of 24% for revenue above $85,520. It’s 39.3%.

Simply how laborious wouldn’t it be to conclude that everybody incomes greater than $142,000 ought to pay a minimum of the identical fee the remainder of us pay? Aren’t we demonstrating all those self same laudable traits of the billionaires, simply on a smaller scale? Why ought to we pay 40% and the billionaires pay primarily zero?

Gee, do you reckon paying no taxes may assist people turn into richer? Garsh, no person ever requested that query earlier than. And do you reckon paying 40% of your revenue may make you poorer over time? Golly gee, how come the speaking heads worshiping the billionaires by no means ask these questions?

Since Social Safety and Medicare/Medicaid are the bedrock of America’s social security web, why shouldn’t billionaires pay to assist these applications? Effectively, why not? Simply how lame do the justifications should be to be acknowledged as laughably self-serving?

Right here’s the trick billionaires use to evade taxes. There are numerous methods for the super-wealthy to evade taxes–funnel earnings by means of an Irish submit workplace field, purchase a tax break in Washington DC, slide the cash into one in all dozens of world tax havens, and so forth.

However a easy one is to report no revenue and dwell giant off borrowed cash. Because the billions of {dollars} in capital beneficial properties pile up because the billionaire’s inventory holdings soar (thanks, Federal Reserve, for the free trillions; terrible swell of you to provide us all that free cash), there’s no revenue generated till the billionaire sells some shares. No sale, no revenue. Simply pay your self $1 a 12 months in wage, borrow in opposition to your billions at super-low charges of curiosity, and voila, you’re tax-free when you construct your super-yacht, purchase your personal island, and so forth.

Simply as a thought experiment, suppose the primary $50,000 in earnings for everybody have been tax-free, and a 40% tax fee was collected on all revenue above $1 million, each earned and unearned (capital beneficial properties), not when the beneficial properties have been realized in a sale however on the finish of each tax 12 months, whether or not the shares that rose in worth have been offered or not.

So Billionaire House Vacationer reaped $10 billion in capital beneficial properties from the appreciation of shares held, then the Billionaire pays 40% of these beneficial properties: $4 billion. There’s a solution to not pay any taxes on capital beneficial properties–have your portfolio lose worth. No beneficial properties, no taxes. And to shut all of the loopholes, the tax fee is on all belongings and revenue related in any approach, form or kind with the U.S. First they pay the U.S. taxes, then in the event that they need to pay different nations’ taxes as nicely, be my visitor. However the 40% is due and payable no matter every other circumstances.

You don’t prefer it, then cease promoting any merchandise within the U.S. or holding any belongings within the U.S. Why ought to billionaires get to arrange immensely worthwhile monopolies, quasi-monopolies, cartels and companies within the U.S. however pay near-zero in taxes? Why ought to billionaires be free to revenue from America’s financial system however pay nothing to assist its citizenry?

What exactly is the logic of decreasing taxes on the wealthiest few to near-zero? If there isn’t a logic, then we’re left with corruption: America is an ethical cesspool.

The reality is America has misplaced its approach if commoners pay a fee of 40% however its billionaires pay subsequent to nothing. Please word Karma and Divine Retribution should not managed by the billionaire’s lackeys and apparatchiks within the Federal Reserve. The pendulum of exploitation has reached its excessive, and the reversal to the alternative excessive is underway.

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