10 Ways to Force the Stinking Rich to Share Their Wealth
For all the moaning from deficit hawks, the
Deficit hawks aren't interested in the deficit, they just don't like the idea that the government spends money on social projects that help poor people. To close the deficit, we could either raise taxes or cut expenditures, and you never hear deficit haws begging to raise taxes. Here are 10 ways a deficit hawk who didn't hate poor people could ease his anxiety
1. Ban Offshore Tax Havens For Big Corporations
The government loses about $100 billion a year from corporate tax evasion. Companies that do their business in the
Congress did finally take some action on this front in March, when it passed its paltry $15 billion jobs bill. The legislation included some efforts to crack down on corporate tax deception, but nowhere near enough. Over 10 years, the new provisions are only expected to bring in an additional $8.7 billion—that's less than 1 percent of the overall problem.
Close the Loophole for Hedge Fund Kingpins
Why do the richest people in the world get taxed at the lowest rates? Nobody makes more money than Wall Street hedge-funders, but thanks to a particularly preposterous loophole in the tax code, they pay only a 15 percent tax rate for income that is supposed to be taxed at 35 percent. Why? Instead of taking a salary, hedge fund managers compensate themselves by taking a percentage of their fund's profits, and these profits are subject to the capital gains tax rate, rather than the income tax rate.
This costs us about $5 billion a year, and it's very easy to fix. Obama supports closing the loophole, and has included it in his current budget proposal. Congress just has to pass the thing.
3. Increase the Capital Gains Tax
But why is the capital gains tax only 15 percent? For that, we can thank Dick Cheney. When President Bush was devising his epic tax cut agenda, he didn't have a problem with axing most taxes for the super-rich. But one tax cut struck him as just too conservative: the capital gains tax. Capital gains are increases in the value of investments like stocks—poor people don't buy stocks, and besides, the capital gains rate was already very lenient, a mere 20 percent. But Cheney fought a behind-the-scenes battle to overrule Bush, and his plan to slash the capital gains tax passed.