Watching folks up in Washington wrangle over details of the president's Build Back Better plan can get a little dizzying as ideas get batted back and forth — it can also get boring.
More recently it has been the latter, as two Democratic senators gum up the works with objections — some known, and some unknown — to various provisions of the plan. Those ongoing objections are not nearly as tedious as the tired tropes trotted out by the servants of special interests.
Critics complain about reckless, out-of-control spending for programs disliked by their donors. Those same critics reject practically any proposal to offset the costs of those programs, arguing that hiking taxes on incomes would extinguish the entrepreneurial spirit and cripple the economy.
What those naysayers refuse to talk about is the rigged system that favors those who are able to "avail themselves of tax-avoidance strategies beyond the reach" of workaday Americans who live from paycheck to paycheck. They amass wealth by investing in assets that increase in value but cannot be taxed as income.
Until the asset is sold, any appreciation in value is considered an "unrealized gain" for tax purposes. The owner of that asset, however, can leverage it to secure other things of value — a loan, for example, which is not taxable as income.
The owner can reap the benefits of the asset's increased value for all sorts of things and never pay taxes until it is sold and any profits — or capital gains — are considered realized. But an owner of this increasingly valuable asset could choose to hold on to it and pass it along as part of the estate upon death to an heir, avoiding taxes altogether as a result of existing tax laws.
ProPublica held a magnifying glass up to U.S. Tax Code earlier this year with an article based on a trove of Internal Revenue Service data gleaned from tax returns filed by thousands of the wealthiest Americans. The nonprofit news organization's analysis of tax data for the 25 richest Americans exposes a tax system that imposes a greater burden on middle-class households than what many might have imagined.
By the end of 2018, according to ProPublica's reporting, the 25 richest Americans were worth $1.1 trillion, an amount equal to what 14.3 million ordinary wage earners would be worth if their wealth were combined. The tax bill in 2018 for the 25 richest Americans totaled $1.9 billion while the bill that year for the ordinary wage earners amounted to $143 billion.
Lawmakers should quit kowtowing to lobbyists who cater to the ultra-rich and corporate interests. Carving out — and protecting — loopholes that allow the wealthiest to avoid paying their fair share contributes to the decay of the nation's infrastructure.
Businesses depend on a reliable transportation system with bridges that won't collapse and pavement that doesn't crumble under the weight of an increasing volume of traffic. They also rely on a skilled workforce, which depends on public education.
The owners of these businesses — and the corporations — should pay a fair share of the taxes that support these and other taxpayer-supported services they rely on.
D.E. Smoot covers city/county government for the Phoenix.