According to a report by Oxfam America published on April 18, the assets of 735 billionaires living in the US have increased by 62% over the past two years, reaching a shocking figure of 4.7 trillion USD.
While billionaires wealth shows no signs of slowing, the income of ordinary workers has only increased by 10% a small increase overshadowed by a huge increase in housing costs, gas, food and other commodities, leading to skyrocketing inflation. Many people have struggled to rebuild their economy after COVID-19 blockades.
A recent study by ProPublica shows that while average families in the US pay federal income tax at 14%, the 25 richest people pay the actual tax rate of 3.4% from 2014 to 2018. While there are various reasons why the rich may eventually have to pay less, one major reason is that they do not report a large portion of their income - something even the US Tax Department was forced to eventually acknowledge last year.
We estimate that 36% of unpaid federal income tax is in the top 1% of the richest people, and collecting all of the federal income tax in this group would increase the federal income by about $175 billion a year, the researchers said.
However, instead of tracking the tax payments of the rich, IRS continues to screen low-income households - those with incomes of $25,000 or less - at a rate five times higher than any other tax-paying class, according to an analysis conducted by Transactional Records Access Clearinghouse last month. IRS admitted that "such a low audit rate is not optimal," but has so far refused to address the issue.
Some US politicians have proposed plans to tax the rich, but not enough to pass. Oregon Democratic Party Secretary Ron Wyden called for taxing billionaires' unperformed profits, a system that would generate $56 billion in revenue a year, enough to cover sick leave, family benefits, and child care at a reasonable cost.
San Jose Democratic Party Congressman Alex Lee proposed a 1.5% tax on assets of households worth more than $1 billion. Previous efforts to pass the law in California, home to some of the country's richest lawmakers, have failed.
Oxfam sees a further increase in the global minimum tax rate on multinational corporations to $63 billion. The organization says the money could go towards key community health needs, including expanding Medicare and Medicaid.
Although even the Biden administration has supported the idea, it requires the approval of all states where multinational companies operate a difficult consensus on the least controversial issues.
