In recent weeks, Russian oligarchs have dominated headlines as the United States has joined a host of other countries in imposing economic sanctions on elites close to Russian President Vladimir Putin. However, what may be less obvious to the American public is that we have our own class of oligarchs here at home. They are America’s 735 billionaires because the economy is rigged in their favor, and they pay virtually nothing in return in the way of taxes.
Tax Day recently passed, and millions of Americans had to file their taxes. It’s worth renewing our resolve to tax billionaire oligarchs and finally ensure that the wealthiest among us pay their fair share.
It is absurd that the richest man in America, Elon Musk, can get away with paying nothing or next to nothing in federal income taxes but, unfortunately, he is by no means an outlier among his peers. Jeff Bezos, Michael Bloomberg and George Soros have also managed to avoid income taxes entirely several times in recent years. Between 2010 and 2018, the 400 wealthiest billionaires paid an average effective tax rate of just 8.2 percent; between 2014 and 2018, the richest 25 Americans paid an average effective tax rate of only 3.4 percent on over $400 billion in gains.
America’s wealthiest individuals cannot be allowed to suck the lifeblood out of our collective social infrastructure — our schools, roads, bridges, police forces and courts — and then turn around and pay nothing for it while the rest of the nation picks up the bill. If we want to restore some semblance of fairness to our tax code and our economy, we need to start by making billionaire oligarchs pay their fair share in taxes.
Taxing the rich goes beyond just matters of fairness, however. It is also about safeguarding our democracy from the oligarchs who wield an inordinate amount of political power over legislators.
As it stands today, American oligarchs dominate campaign finance. Since the 2010 Citizens United Supreme Court decision opened the floodgates to mega-campaign donations, the top dozen donors alone have accounted for $1 out of every $13 spent in federal elections. In 2020, the top 20 billionaire donors spent $2.3 billion — that’s more than twice as much as what the entire Biden campaign spent.
Our lax campaign finance laws have created a situation in which the average American wields little to no influence whatsoever on Capitol Hill. And it should come as no surprise that public policy outcomes overwhelmingly reflect the preferences and interests of wealthy donors. Nowhere is this trend more apparent than with taxes. Most Americans support raising taxes on the wealthy and corporations and are keenly aware that they don’t pay their fair share. Yet, wealthier Americans oppose tax hikes on their fortunes and have gotten their way in recent years with reduced top marginal rates and the protection of special loopholes and exemptions.
If we want to restore fairness to our tax code and protect our democracy, then we need to muster the political will to tax the rich. In the wake of Russia’s invasion of Ukraine, President Biden and Congress quickly found the resolve to level sanctions against Russian oligarchs. They must now do the same with billionaire oligarchs here at home. We don’t need to seize Jeff Bezos’s yachts or freeze assets as we’ve done with the Russians, but we do need to start taxing their obscene fortunes more effectively.
Thankfully, there are already policy solutions in play that we can enact to tax American oligarchs. President Biden’s Billionaire Minimum Income Tax proposal and Rep. Jamaal Bowman’s (D-N.Y.) Babies Over Billionaires Act are two such initiatives that would go a long way in making billionaires pay their fair share. Democrats must now do whatever is necessary to pass these proposals, especially before the political window of opportunity potentially closes with the upcoming 2022 midterm elections.
The late Supreme Court Justice Louis D. Brandeis once said, “We must make a choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” Americans must heed his word, make the right choice and find the resolve to push lawmakers to tax the oligarchs.
Morris Pearl is a former managing director of BlackRock, a global investment firm. He is the chair of the Patriotic Millionaires.