America's tax system is rigged to protect the rich and powerful | CNN
June 10, 2021. Summarized by summa-bot.
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Jeffrey Sachs writes the US tax system is designed to protect wealthy individuals and powerful corporations, and it is breaking the country in more ways than one.
Meanwhile, public opinion – strongly supporting higher taxes on wealthy Americans and corporations – counts for little because the rich have undue influence over the political class.
Between 2014 and 2018, Jeff Bezos, founder of Amazon, saw his wealth grow $99 billion (to the level of $191 billion today) while paying a pittance in income taxes, according to an investigation published by ProPublica, which revealed several of America’s best-known billionaires paid similarly little in taxes.
But why should he sell them when he can pay for his $500 million superyacht and other toys by borrowing – and thereby escape income taxes altogether?
By the way, if Bezos actually sells some shares after owning them for more than one year, he would pay a “long-term capital gains tax” of 20%, below the 22% marginal tax rate on wage income paid by an individual earning $41,000!
The second problem is when companies park their assets and international profits in tax havens.
Because of the tax havens, corporate share prices soar, and Bezos and friends enjoy their mega-incomes as “unrealized capital gains” without the need to pay any taxes.
The third problem is outright unaffordable tax cuts, such as the 2017 Trump-led tax law that cut the statutory corporate income tax rate from 35% to 21%.