10 Steps to Break Up the Wealth of the Super Rich
Continued from previous page
Other potential remedies include a push for an amendment to the Constitution to remove the free speech rights for corporations that Citizens United provides. Move to Amend is a coalition organizing such an amendment.
The reeingineered corporation will still employ thousands of people and be innovative and productive. But it will be much more accountable to shareholders, to the communities in which it operates, and to customers, employees, and the common good.
Redesign the Tax Revenue System. This final section of rule changes examines how farsighted tax and revenue policies can aid in the transition to a new and sustainable economy. Present tax rules do not reflect the widely held values and priorities of the 99 percent. Rather, they reflect the designs and worldview of the powerful 1 percent of global corporations and wealthy individuals. The 1 percent devotes considerable lobbying clout to shaping and distorting our tax laws, which is one of the reasons those laws are so complex and porous.
Our tax revenue system should be simple, treat all fairly, and raise adequate revenue for the services we need. Tax rules and budgets are moral documents; we should not pretend they are value neutral.
We’ve already discussed two ways that the tax code has been distorted. The first is how it privileges income from wealth over income from work by taxing capital gains at absurdly low rates. Second, the offshore system gives advantages to the global tax dodgers in the corporate 1 percent who force domestic businesses in the 99 percent to compete on an uneven playing field.
Another example is the way our tax code offers larger incentives to mature extractive industries such as oil and natural gas instead of directing resources to communities and corporations that conserve resources, care for the Earth, and catalyze new green enterprises.
The present tax system not only fails to raise adequate revenue from those most capable of paying but also serves as a huge impediment to progress. Current tax rules lock us into the economy of the past, rather than encouraging a transition to a new economy rooted in ecological sustainability, good jobs, and greater equality.
Conventional tax wisdom asserts that we should “tax the bads” by placing a higher price on harmful activities. Hence the notion of “sin taxes” levied on liquor, tobacco, and now, with increasing ferocity, junk food. Taxing these items raises revenue to offset the societal costs of alcoholism, cancer, and obesity. But sin taxes, like any sales tax, are regressive, requiring lower-income households to pay a higher percentage of their income than the wealthy pay.
There are three major “bads” that our tax code should be revised to address:
1. Extreme concentrations of income, wealth, and power that undermine social cohesion and a healthy democracy
2. Financial speculation, such as the activities that destabilized our economy in 2008
3. Pollution and profligate consumption that deplete our ecosystems
There are several bold interventions that focus on “taxing the bads” of our contemporary era and reversing two generations of tax shifts away from the 1 percent. They cluster around three foci: taxing concentrated wealth, taxing financial speculation, and taxing the destruction of nature.
• Tax inheritances. Levy a progressive estate tax on the fortunes of the 1 percent. At the end of 2010, Congress reinstated the estate tax on estates over $5 million ($10 million for a couple) at a 35 percent rate. Congress could close loopholes and raise additional revenue from the 1 percent with the greatest capacity to pay. The Responsible Estate Tax Act establishes graduated tax rates, with no tax on estates worth under $3.5 million, or $7 million for a couple, and includes a 10 percent surtax on the value of an estate above $500 million, or $1 billion for a couple. Estimated annual revenue: $35 billion.