Working Class Americans Subsidizing Taxes For The Wealthy, Carrying The Weight For All
Written By: Anton Sawyer
Well, it appears that the only thing certain in life now is death.
Given the recent leak of tax data for multi-billionaires like Jeff Bezos and Elon Musk, among others, it seems that not everyone is guaranteed to pay taxes. In fact, I am going to hedge a bet that 90% of the people reading this article have paid more in taxes than the richest people in the US over the last decade or so. With the wealthy already profiting from Covid-19 (which you can read here), it seems that those in the top tax brackets have seen nothing but days of wine and roses over the last year. So what exactly is the best way to combat this as an average citizen? By having a little conversation with everyone’s favorite uncle: Uncle Sam.
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I know that to some this exercise is going to be futile as most people already know that “the rich get richer, while the poor get poorer.” This has been a mantra for the working class ever since the economics of society became a measuring stick for “success” and “value.”
It’s when you see the levels of blatant disregard and congressional enabling that’s shown by our leaders that’s truly sickening. In early June 2021, an article published by ProPublica—in conjunction with Forbes—showed just how little the mega-rich actually pay in taxes. Some of the findings from the IRS tax data recovered showed that in 2007 Jeff Bezos, then a multi-billionaire and now the world’s richest man, did not pay a penny in federal income taxes that year. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes. The report compared how much taxes the 25 richest Americans paid each year between 2014 to 2018. Those people saw their worth rise a collective $40 billion, yet they only paid $13.6 billion in taxes. This amounts to a true tax rate of 3.4%. As someone who has spent a couple of decades in the workforce, at least 22% of my income goes to the government each year. Most people in the working class are in the same boat, and these numbers just scratch the surface. Time and time again the ProPublica article shows how some of the wealthiest in the world pay absolutely nothing. My question is why? Every American understands that the source of this inequality is in the tax code and how complicated it is. For you and I, being able to afford an incredibly shrewd and knowledgeable tax accountant that can exploit every potential loophole isn't a reality. Yet, this is the way the system is designed.
A good example of using a loophole came in 2008 when Gene Simmons of the rock band KISS bought a professional Australian football (soccer) team ... for 24 hours. Said Simmons of the purchase, "It was a one-day purchase, and it’s called a ‘fold back’ I think, where you go in, and it was a way to shield Australian taxes. As soon as you earn money offshore, you have to pay offshore taxes. And then that’s put against the American taxes, but they hold on to your money, and while they hold on to your money you don’t get the benefit of the…" He trailed off making sure to pick his next words very carefully. “You know, they loan out your money while they hold on to it for a year. It’s an old banking trick, and it’s legal."
There have been some doubts reported about Simmons' purchase, calling it a "publicity stunt," but given the number of times he has boasted about his business prowess over the decades, this is one purchase he's been coy about ever since the tax shelter was revealed. Some will also argue that this was in Australia and not in the US. As he said in the interview, it was related to his American taxes and getting more money more quickly, and yes, this is all legal. But how many average citizens would even have this knowledge—let alone having the income to pull it off? We know that throughout history, being wealthy is often an end unto itself. What is incredibly frustrating as a middle-class worker, is looking to the leaders in Washington for help, and then have them blame the leak and not the inherent tax problems. This reaction has come from both the Republican and Democrat parties.
President Joe Biden has been on a tear in support of the middle class for decades now. There are a plethora of quotes from him talking about income inequality, what we need to do to make upward economic mobility a reality for the largest amount of people, increasing minimum wage, etc. All of these changes were done with the “poor folk” in mind. However, when this tax leak and data was made public, Biden was nowhere to be found with his platitudes for the poorest of the country and that the wealthy need to “pay their fair share.” Given the level of hyperbole that both Biden and the DNC have unleashed upon us when it comes to income equity for all classes, you would think he and his administration would be lining up their lawyers to find ways to prevent this from happening again. You'd be wrong. His administration has opted to find and arrest the person who allowed this leak to occur. Shortly after the leak, Treasury spokeswoman Lily Adams made a clear statement that the Biden administration has decided to turn the attention of its legal hounds towards someone they are trying to shade as the ultimate villain. "The unauthorized disclosure of confidential government information is illegal. The matter is being referred to the Office of the Inspector General, Treasury Inspector General for Tax Administration, Federal Bureau of Investigation, and the US Attorney's Office for the District of Columbia, all of whom have independent authority to investigate." Republican Senate Minority Leader of Kentucky Mitch McConnell shared this same sentiment. "My guess is the IRS, somebody at the IRS leaked this in order to affect the tax debate and remind people that there are some very wealthy Americans," he said. "There are some very wealthy Americans. But it's important to remember we don't tax wealth." He added: "Our tax returns are, by law, confidential because of just this kind of shenanigans. These people ought to, whoever did this, ought to be hunted down and thrown into jail." The most confusing part of what he said was “it’s important to remember, we don’t tax wealth.” So is the annual net income of someone all that’s allowed to be taxed? What about property taxes (they account for total assets in many municipalities and can be taxed as well)? McConnell's statement makes absolutely no sense. But the message that they aren’t going to do anything about reducing the loopholes in the tax code was heard loud and clear.
Of course, in order to keep up the proper smokescreen, certain Republican congressional members have come out since this revelation was thrust upon the masses claiming they want to close tax loopholes that allow the wealthy to pay little to nothing in taxes. Conservative Kentucky representative James Comer came out to help lead this charge of knowing misdirection. "Everyone knows there are billionaires that take advantage of the tax code. When Donald Trump was running for president, he talked about that," Comer stated. "Republicans want to close the loopholes and make sure that every American pays their fair share of taxes.” This somewhat flies directly in the face of the vote he made for the Trump-era tax cuts for the wealthy in 2017. At that time he claimed, “I am proud to support this critical part of President Trump's pro-growth agenda. [It] will fulfill this promise to the American people who have struggled under the weight of Washington bureaucrats for far too long."
So then how can we combat this unfair advantage? By treating yourself like a business.
In a “Vice: Profiles” episode featuring Matthew Lesko, he spoke about his time while working with various businesses and his experiences with them in the realm of finances and government grants. For those of you who may not remember, Lesko is the New York Times bestselling author who wears loud suits covered in question marks and yells at the TV. If you’ve ever suffered from insomnia and found yourself watching an infomercial at two in the morning, it’s almost impossible to never have seen him. What many people don’t know is that before he started writing books on government grants, he worked for giant corporations who tasked him with finding any and all free money offered by the government to businesses for thousands of different reasons. On both a moral and personal level, he found this line of work to be so draining, that he eventually quit. This lead him to write many books for the average American, and inform them how to get free government money. He was very specific in mentioning that his work felt hollow/empty at the corporate level, but incredibly fulfilling when working with individuals who could desperately use the funds. “I feel what I do is important because I know for most problems in life, I could find you a source of free money and help to help you solve that problem.” He made it clear that helping the average American is all he’s concerned with. Yet, with all his good intentions, many completely disagree with his approach. “Some people interpret what I’m doing as promoting welfare. I’m making more people take advantage of government programs. To me, it’s just sharing with people what reality is.” When asked about why there is so much opposition to his efforts, he noted a giant discrepancy between reality and the way the average citizen has been trained. “Maybe because of our culture, people hate government, so it’s the last place to look for help,” pausing to reflect on the utter hypocrisy he was about to state. “Except if you’re very rich, then you go there first.”
It’s been made abundantly clear that there is no help from up above. When our leaders are more concerned about a leak of statistical information over the financial burden placed on some of the most vulnerable members of society at large, I highly doubt they are going to find a way to level the playing field. Given these revelations, it does allow for a silver lining. It defeats one of the top complaints made by conservatives in how various government programs will be paid for; by taking all of those billionaires and making them pay … something. By this I mean legitimately getting the money from them with the same ferocity like the IRS does for everyone who can’t afford a lawyer. If Bezos or Musk turned over a check for even half of what their bracket says, it would help cover a huge amount of infrastructure programs or be used to increase medical assistance for children, the elderly, and those with disabilities. Too bad there is nothing but talk coming from those who can realistically fix it.
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