We have a fundamentally broken tax system, one that fuels massive inequality by letting the rich and corporations escape paying their fair share while ensuring that Black, white and brown families go without the critical public investments needed to ensure that all are able to thrive.
Our tax system is rigged in favor of Wall Street and the extraordinarily rich, and the rest of us pay the price. Congress can change this by closing loopholes and restructuring tax policies to stop rewarding Wall Street manipulation. Real tax reform is needed to end advantages for giant CEO pay packages that reward risky, short-sighted, and fraudulent activities at the expense of workers, investors and consumers; to make the financial industry pays its fair share and stop Wall Street tax evasion; to curb wasteful and risky speculation, and to incentivize financial companies and players to support — not suck money out of — the real economy.
Tax policies that tax wealth, end the capital gains tax preference for income from wealth (and with it the carried-interest loophole), and restore individual marginal tax rates and the corporate tax rate to historic norms are the basic principles which will mitigate inequality and underwrite the provision of public goods and services to provide a more just and equitable society. We need to end tax policies that facilitate the transfer of dynastic wealth, such as getting rid of the “stepped-up basis” loophole that allows capital gains to get passed to rich heirs tax-free, either via an inheritance tax, deemed realization at death, or an increased estate tax.
At a corporate level, a myriad of loopholes must be closed that let businesses escape paying their fair share, in many cases not paying any tax whatsoever. Perhaps foremost among these measures is a financial transactions tax to be levied on high frequency traders that destabilize the stock market and contribute nothing to the economy. We need to require country-by-country reporting and automatic exchange of tax information with other countries, eliminate the overly generous net operating loss provision, end “opportunity zones” that incentivize the wrong players and contribute nothing to economic development, and tax excessive CEO to worker pay ratios. Critical to all this is funding the IRS at an appropriate level to enforce the tax laws and stop looking the other way on rampant corporate and high-end tax evasion.
Here are a few legislative vehicles for restructuring the tax code so that it serves everyday Americans, and not Wall Street donors:
Close the “Carried Interest” Loophole
Close the tax loophole that allows private equity and hedge fund managers to mis-classify their salaries as investment income, and pay the much lower capital gains tax rate – instead of paying income tax like the rest of us. Read on >>
Charge a Wall Street Sales Tax
A Wall Street Sales Tax — also known as a financial transaction tax, speculation tax, or Robin Hood tax — is a small fee of a few cents per $100 that would be imposed on transactions in stocks, bonds, or derivatives, raising money for critical services and disincentivizing risky high frequency trading. Read on >>
Tax Outrageous Gaps Between CEO and Worker Pay
To address excessive CEO pay and economic inequality, we can raise the corporate tax rate on companies based on the size of the gap between the CEOs and the median worker pay. Read on>>
Taxing wealth is an important step towards ending the racial wealth divide in America. By taxing the excessive wealth of ultra-wealthy billionaires, we begin to unrig the system that preserves and increases fortunes of the super rich. Read on>>