“World” Editorial Department. A bad time for tax optimization. A few days after the belated but useful initiative of the G7 countries to seek fairer taxes on the profits of global multinational corporations, the disclosure of the tax returns of the top 25 U.S. billionaires reignited the taxation of the rich. The tax debate. United States.
Public Broadcasting Corporation, An association specializing in investigative journalism in the public interest obtained these official documents, which indicate that these super-rich people include Jeff Bezos (Amazon), Michael Bloomberg (Bloomberg) and Elon Musk (Tess Pull), and pay little or no income taxation between 2014 and 2018 on a pro-rata basis. The average tax rate applicable to them is 15.8%, while the marginal tax rate in the United States is 37%. In theory, these documents are not available to the public, and disclosing these documents may constitute a criminal offence, revealing the unfairness of the US tax system.
These billionaires who are proud of establishing successful businesses are masters of the art of legal tax avoidance. Most of their wealth is made up of company shares. These shares are not considered taxable income. As long as these assets are not sold and create capital gains, they evade tax to a large extent.
If we adhere to these principles, this will not seem shocking, because it does seem difficult to tax a person’s unrealized gains. But in fact, this is indeed a fool’s game. These billionaires do not live on love and freshwater: they can resort to huge loans, which are themselves secured by the value of their estate. These loans are not taxed, and the interest they generate can be deducted from income tax. Well, compared to the size of their wealth, this is ridiculous.
As for dividends and capital gains, they are only taxed at 20%. The low tax rate encourages the wealthy to convert their labor income into capital income by setting up their own in companies, trusts and other foundations, thereby evading progressive income tax to a large extent. Translation that is still impossible for ordinary labor. Finally, keep in mind that a couple’s estate can enjoy a full exemption of less than $22 million.
The main stakeholders who opposed the increase in tax rates and the Republican minority in Congress tried their best to conceal their embarrassment about these revelations and emphasize the illegal nature of their publications. The debate cannot be limited to this kind of legal sophistry.work Public Broadcasting Corporation Only emphasize the obvious point: the principle of “equal income, equal taxation” has become a pipe dream in the United States.
Opponents of reform say that removing tax optimization will not solve the fiscal deficit problem. But it doesn’t exist at all. The U.S. tax system has contributed to the dangerous drift of inequality and a sense of injustice. The four hundred richest Americans enjoy lower tax rates than those applicable to other types of taxpayers. Joe Biden opposes fundamental reform of the tax system that undermines the cohesion of American society and weakens the operation of the economy.