Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Are US billionaires really going to pay more tax?

Are US billionaires really going to pay more tax?

For years, the assumption has been that most Americans are anti-tax, but are attitudes changing?

Higher taxes are a hot topic in American political circles.

Democratic presidential candidate Elizabeth Warren has called for a 2% tax on family fortunes above $50m.

Rival candidate Bernie Sanders, who tugged the Democratic Party to the left in his 2016 presidential run, is back with his own tax on "extreme wealth" and remains another top contender.

Billionaires such as George Soros, Warren Buffett, Eli Broad and Marc Benioff have also come out in support of higher taxes on the super rich.

Even US President Donald Trump speaks about the need to close tax loopholes for the wealthy.

Yet for years, standard political doctrine has held that anti-tax sentiment is as American as apple pie.

So what's going on?


Growing gap

Americans have long told opinion polls they think the wealthy should pay more.

But the issue has gained political traction in recent years, galvanised by eye-catching research about rising income inequality, stalling upward mobility and findings that the richest 400 Americans now pay lower tax rates than any other income group.

Economists are engaged in a heated debate about just how big the gulf between rich and poor is.

But there is little doubt that the gap has widened sharply over four decades toward record levels, fuelled by a mix of forces, including rapid gains in company shares and a relatively stagnant minimum wage.

The US central bank estimates that the top 1% of US households hold about 39% of the country's wealth, a term that includes assets such as property.

The top 1% also account for about 13% of income, after taxes and other federal transfers, according to a 2016 Congressional Budget Office analysis.

That's a higher share than in the UK, where the top 1% is estimated to account for about 8% of income and around 24% of overall wealth.


Tax backlash

Exposés of how some wealthy individuals have avoided paying their taxes in full, and scandals such as celebrities bribing college admissions officers for their children, have added to the anger.

Almost two-thirds of Americans told Pew Research Center this year that they were bothered "a lot" by the feeling that some corporations and the wealthy don't pay their fair share of taxes.

Even a poll from Fox News - a television network known for its conservative bent - found that 70% of voters favoured tax increases on families making more than $10m a year.

The discontent is especially deep among Democrats, who were outraged when Republicans cut rates for the wealthy and corporations as part of a $1.5 trillion tax cut in 2017.

Just 32% of Democrats now say the present federal tax system is fair, compared with 64% of Republicans, Pew found.

"There's genuine frustration around the country and the political discussion is, I think, reflecting that," says Arloc Sherman, senior fellow at the Center on Budget and Policy Priorities, a Washington think tank.

"And it's about time," he adds.


Wall Street worries

As fury over the economic divide grows louder, the American business class, traditionally a staunch defender of low-tax regimes, has started to shift its tone.

This summer, to great fanfare, a key business group declared that companies' interests extended beyond shareholders to include employees and local communities.

Other Wall Street titans have argued that reform of capitalism is necessary to head-off more draconian changes.

But their worries don't necessarily signal that higher taxes are likely anytime soon, according to Andrea Louise Campbell, a political science professor at MIT, who is working on a book about American attitudes toward taxation.

She says that although Americans have said they favour higher taxes on the wealthy for years, when it comes to the ballot box their support depends on what kind of tax is being proposed. Voters typically back high rates on annual income but not, for example, on inheritances.

Reducing inequality also routinely ranks low on the list of voter priorities - with fewer than 3% identifying it as the top problem in Gallup surveys.

"It is certainly the case that income inequality has increased and many Americans are aware of that and are unhappy with the trend, but translating that into a desire for redistributive taxing and spending policies is more difficult," Ms Campbell says.


Democrats divided

A few newspaper columns and famous names notwithstanding, surveys show the rich tend to be anti-tax - and the rich still have the most influence.

Despite the populist tone US President Donald Trump struck during his 2016 presidential campaign, once in office he championed a tax cut that disproportionately benefited the wealthy.

There is even a divide among Democrats, as many moderates stop short of supporting a wealth tax - which covers items such as property, yachts and art in addition to income - that is backed by Ms Warren and Mr Sanders.

They have argued that such plans are not only unrealistic but bad policy, since they can be difficult to enforce.

Wealth taxes have been phased out in much of Europe, and they would almost certainly face a legal challenge in the US over whether they meet the constitution's criteria for what the federal government is allowed to tax.

Even if the public was convinced by Ms Warren's proposal - which would place a 2% tax on household assets over $50m and 3% over $1bn - it's unlikely to make it past Republicans and lobbyists in Washington, Ms Campbell adds.

"The role of public opinion in setting taxes is relatively modest," says Ms Campbell. "Even if ordinary Americans on average would like increased taxes on high income, high wealth people, I don't think they're the ones with influence on policymakers."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
UK Government Tries to Sue 4chan for Breaching Online Safety Act
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
"Every Centimeter of Your Body Is a Masterpiece": The Shocking Meta Document Revealed
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
Beijing is moving into gold and other assets, diversifying away from the dollar
China Requires Data Centres to Source Majority of AI Chips Locally, For Technological Sovereignty
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
Jellyfish Swarm Triggers Shutdown at Gravelines Nuclear Power Station in Northern France
OpenAI’s ‘PhD-Level’ ChatGPT 5 Stumbles, Struggles to Even Label a Map
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
The World Economic Forum has cleared Klaus Schwab of “material wrongdoing” after a law firm conducted a review into potential misconduct of the institution’s founder
A Computer That Listens, Sees, and Acts: What to Expect from Windows 12
Bitcoin hits $123,000
Southwest Airlines Apologizes After 'Accidentally Forgetting' Two Blind Passengers at New Orleans Airport and Faces Criticism Over Poor Service for Passengers with Disabilities
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Russian Forces Advance on Donetsk Front, Cutting Key Supply Routes Near Pokrovsk
It’s Not the Algorithm: New Study Claims Social Networks Are Fundamentally Broken
Sixty-Year-Old Claims: “My Biological Age Is Twenty-One.” Want the Same? Remember the Name Spermidine
Saudi Arabia accelerates renewables to curb domestic oil use
The Billion-Dollar Inheritance and the Death on the Railway Tracks: The Scandal Shaking Europe
World’s Cleanest Countries 2025 Ranked by Air, Water, Waste, and Hygiene Standards
Denmark Revives EU ‘Chat Control’ Proposal for Encrypted Message Scanning
Perplexity makes unsolicited $34.5 billion all-cash offer for Google’s Chrome browser
Cristiano Ronaldo and Georgina Rodríguez announce engagement
×