GOP rep complains it’s 'ridiculous' for Harris to ask billionaires to 'pay their fair share'

09 October 2024

One pillar of Vice President Kamala Harris' economic platform is to increase taxes on the wealthiest Americans, calling on billionaires to "pay their fair share" of federal taxes. Now, the chairman of the House of Representatives committee overseeing taxes is crying foul.

On Wednesday, Rep. Jason Smith (R-Missouri), who chairs the powerful House Ways and Means Committee, complained about Harris' plan to Fox Business host Maria Bartiromo. In the clip journalist Aaron Rupar posted to X (formerly Twitter), Smith defended the historically low tax rates of the richest Americans and called the vice president "ridiculous" for suggesting they should be increased.

"What's so ridiculous is for her statement to say that the rich should pay their fair share," Smith said. "It's just a talking point that she throws out there... Her policies are absolutely atrocious."

However, Harris' argument that U.S. billionaires aren't paying historically low tax rates is backed up by hard data. Earlier this year, French economist Gabriel Zucman wrote in the New York Times that the wealthiest Americans paid just 23% of their income in taxes in 2018. Previously, the top 1% of Americans paid more than 56% of their income in taxes in 1960, and taxes still took up 52.7% of their incomes in 1970.

After Ronald Reagan's inauguration in 1981, the richest saw their tax rates drop precipitously, paying just over 35% of their incomes by the time Reagan left office in 1989. This trend continued after George W. Bush signed new tax cuts benefiting the rich into law in the early 2000s. Barack Obama extended those tax cuts in 2010, and Donald Trump signed even larger tax cuts into law in 2017. By 2018, the bottom half of U.S. income earners paid approximately 24% of their income in taxes, while billionaires paid an even lower rate. Zucman explained that the primary reason for this is that in the United States, work is taxed at a higher rate than assets.

"[W]hile most of us live off our salaries, tycoons like Jeff Bezos live off their wealth," Zucman wrote. "In 2019, when Mr. Bezos was still Amazon’s chief executive, he took home an annual salary of just $81,840. But he owns roughly 10 percent of the company, which made a profit of $30 billion in 2023."

"If Amazon gave its profits back to shareholders as dividends, which are subject to income tax, Mr. [Jeff] Bezos would face a hefty tax bill. But Amazon does not pay dividends to its shareholders... Instead, the companies keep their profits and reinvest them, making their shareholders even wealthier," he continued. "Unless Mr. Bezos, Warren Buffett or Elon Musk sell their stock, their taxable income is relatively minuscule. But they can still make eye-popping purchases by borrowing against their assets. Mr. Musk, for example, used his shares in Tesla as collateral to rustle up around $13 billion in tax-free loans to put toward his acquisition of Twitter."

This is where the tax plans of the two major parties' presidential nominees come into focus. While Harris is aiming for generating more revenue from assets held by the richest in her call for higher taxes on unrealized capital gains over $100 million, Trump is campaigning on renewing his tax cuts from 2017, which overwhelmingly benefited the rich.

If Trump were to succeed in renewing the tax cuts — which are due to sunset next year — it would amount to a cost of roughly $10 trillion over the next decade. CNN reports that Harris' plan to tax unrealized capital gains on the roughly 10,660 Americans who have net worths of nine figures or more "could be used to pay for social spending programs, like helping families pay for child care or down-payment help for first-time homebuyers."

Watch the clip of Smith's remarks below, or by clicking this link.

From Your Site Articles