In December 2017, the GOP/Trump tax bill passed, codifying a $2 trillion giveaway to Wall Street, big corporations, and wealthy individuals. The tax code, which was already working great for Wall Street and the super rich, was rigged by Trump and the GOP to funnel even more wealth upwards, while paving the way to cuts in critical public services like Medicare and Social Security.
This past April, we filed our tax returns for the first time under the new tax regime. We and many Americans felt the sting very personally in the form of a higher tax bill, all to pay for a wholesale redistribution of wealth to the rich.
The good news is that there are a lot of exciting tax proposals out there, from raising income tax on the super rich to a tax on wealth that would pay for tackling the opioid crisis to taxing Wall Street trades to pay for debt-free college. We’ve been following all of these new ideas to unrig the tax code and take the power back from Wall Street and the super rich.
But we want to hear directly from activists about their ideas to make the tax code fairer. So on Tax Day this year, we asked 160,000 email activists how they would fix the tax code.
The response was telling: thousands of members took the time to share their thoughts. Not only did a higher percentage than usual (22%) of our activists respond to a check-the-boxes survey of tax reform ideas they agree with, 435 people wrote in a response detailing their own suggestions. In other words: while the topic of taxes can get wonky very fast, in fact, people get its importance to their lives, they care, and they are paying attention.
We listed eight bold proposals to fix the tax system that have either been proposed or introduced by members of Congress, and brief explanations of each one, and asked members to check which ones they support. They were allowed to check as many as they liked from the following list:
- Wall Street Sales Tax — We pay taxes when we buy a pair of shoes or some tacos — Wall Street traders should pay a tax when they buy or sell stocks and other financial products.
- Eliminate the “carried interest” loophole — Private equity and hedge fund managers shouldn’t pay lower tax rates than teachers, nurses, and firefighters. Let’s get rid of this ridiculous subsidy.
- Tax excessive wealth — Charge a 1% tax to people who have over $10 million, and another 1% tax to people who have over $1 billion. The last thing we need is an inherited aristocracy.
- Tax rich people selling assets the way we do regular income — Capital gains are profits from selling things like stock, art, and yachts. Inexplicably, we tax income from stuff less than income from work. There is no earthly reason for the rest of us to subsidize peoples’ yachts.
- Bring back the estate tax – Most owners of multi-million dollar estates are allowed to pass on property to their heirs tax-free. The estate tax helps us avoid becoming an inherited aristocracy and brings in revenue for schools and roads — let’s bring it back!
- Raise income tax for the super rich — Tax the portion of people’s income above $10 million at a 70% rate. Don’t worry — under Eisenhower, top earners used to pay a 91% marginal tax rate, and the world didn’t come to an end.
- Tax a company’s real profits — Tax the real profits that very large American companies report to their investors — no loopholes or exemptions — so no company with massive profits can disguise them or hide them offshore to pay zero federal taxes.
- Tax companies with ridiculous CEO pay more than other companies — There is no way CEOs work 500-1000 times as hard as a worker at their company. When CEOs get paid more than a hundred times what their workers get paid, charge the company a 10% surtax.
Of these, the top 4 vote-getters were:
- Taxing companies with ridiculous CEO pay more than other companies (2,347 votes)
- Raising income tax for the super rich (2,297 votes)
- Implementing a Wall Street Sales Tax (2,193 votes)
- Bringing back the estate tax (2,004 votes)
The other four proposals (tax a company’s real profits, eliminate the ‘carried interest’ loophole, tax excessive wealth, and tax rich people selling assets the way we do regular income) also had their supporters. People seemed to be fans of all eight proposals.
We also encouraged members to write-in their own suggestions for creating a fairer tax code. Here are some trends we observed among the hundreds of individual suggestions our members made:
- People want Trump’s tax law repealed. We hear you! Let’s keep up the pressure — 2020 is coming.
- People love the idea of taxing Wall Street trades: they had multiple names for such a proposal, including: taxing Wall Street volatility; sales tax on stock and bond transactions; financial speculation tax; Wall Street transaction tax; flash tax; “robinhood tax”; and more. But the sentiment is clear: end the double-standard — tax Wall Street.
- People are disgusted with obscene CEO pay and the inequality it is fueling, and they want to take it on. Here’s what one member wrote:
“Honestly, companies with ridiculous CEO pay should be paying at least a 25% surtax to really penalize them for their greed. If we could even head outside tax law, CEOs shouldn’t even legally be able to make 1,000x more than their employees. If we tied CEO pay to their lowest paid workers (say, you can’t make more than 10x more than your lowest paid employee), that would really make them open their eyes to the insane amounts of inequality. And please increase the excessive tax percent from 1% to least 10%. They need to feel it!”
- Lots of support for flat tax. I’ll be honest, this one made us pause. While it reflects a clear desire for fairness in our tax code, flat taxes can be deceptively unfair, or “regressive”: that means that they tend to result in higher taxes for the poor, and lower taxes for the rich. A little dated, but here’s a good explainer.
- Total nostalgia! Many of you referenced returning to the tax regime in place during the administration of REPUBLICAN President Dwight Eisenhower in the 1950s. Just to recap what was happening then:
“The top income bracket in the United States climbed to a marginal tax rate of 91 percent. Taxes on corporate profits were two times as great as they are in 2017, and that’s before the current proposal to cut that rate to 21 percent. The tax on large estates rose to more than 70 percent. Businesses operated under a relatively high tax burden, and they employed a labor force in which one-third of the workers were unionized and bargained with executives as equals. Corporations served a diversity of stakeholders as opposed to stockholders. The result was a booming economy that benefited most Americans. The average corporate CEO received 20 times more compensation than the firm’s typical employee; by 2016, CEOs’ salaries averaged more than 200 times those of the average worker.”
- It’s a big, collective NOPE to corporate loopholes, offshore tax havens, undertaxed luxury goods, and subsidies for the fossil fuel industry.
- Thinking systemically: folks realize that fixing the tax code is not enough, and many proposed taking on undue influence of lobbyists, doing anti-trust work, closing the revolving door between industry and Washington, repealing Citizens United, getting dark money out of elections, ending “Too Big To Fail”, reinstating Glass-Steagall, eliminating student debt, better funding the IRS to go after powerful tax frauds, and more.
This wasn’t a representative survey that followed the standard methodology. But the formal surveys tend to agree: voters’ number one concern is that wealthy people aren’t paying their fair share, and 73% of them want to see higher taxes on annual income over $10 million (that last one is a Fox News poll!)
Together, we are more powerful. We thank activists for sharing their thoughts and fighting for a tax code that works for all of us and our collective future, and not just Wall Street, big corporations, and the wealthy. It was valuable to us to engage with activists and affirm that there is broad consensus and intense energy behind proposals to make the tax code–and our economy–fairer. May all 2020 hopefuls take note.