Billionaires should have to follow the same rules as the rest of us
A “Tax Day” marcher who was part of a 2015 rally. (Getty Images)
Most of us are happy to have Tax Day behind us this year. The escalating cost of everything from gas to housing made this year’s Tax Day more stressful than usual for thousands of Montanans who are already tightening their belts in the wake of historic inflation.
As a director of a senior advocacy organization, I know firsthand that older Americans are especially feeling the squeeze. The average senior’s retirement income shrinks as they age, while the price of healthcare, prescriptions and food continues to increase. Research estimates show that 50% of adults aged 65 and older who live alone, and 23% who live in two-elder households don’t have enough money to cover basic needs like housing. Things got even harder for many during the pandemic that put many older Americans at risk for illness, separated families and threw the economy into a tailspin.
But the pandemic didn’t have the same impact on everyone. Billionaires, for instance, actually increased their wealth substantially during the last two years. According to the Montana State Billionaires Tax Report, not only are there more billionaires than ever in the United States, but U.S. billionaires have gotten $1.7 trillion richer during the first two years of the pandemic. Montana’s four billionaires have gotten 51.5% richer.
That’s a stark contrast to the number of people who lost jobs, businesses and suffered through illness during that same period or even to the number of people who did fine during COVID but did not massively increase their personal wealth. And, not only did billionaires get much richer during the pandemic, unlike the rest of us, they paid no more in taxes despite making more money.
That’s because billionaires don’t follow the same rules as the rest of us.
Average Montanas pay income taxes based on the income they earn at work: the more they earn, the more they pay. But billionaires, who generate their wealth from the stock market, don’t pay any more when their wealth rises because income from assets is not taxed like income from work. Thanks to this loophole, billionaires get special treatment–their own tax rules that enable them to avoid taxes while the rest of us pay our fair share.
It doesn’t have to be this way. Congress could take action to make billionaires pay more like average Montanans. Lawmakers have a choice to make: they can close loopholes and make the ultra rich follow the same rules as the rest of us, or they can keep letting the rich get richer while contributing nothing to support the economy that has fueled their tremendous wealth gains.
Fixing the broken tax code helps all of us. The additional revenue from taxing billionaires could help Montana seniors lower the cost of their healthcare, fund public education and provide much needed relief to our affordable housing crisis. Rising demand for housing and escalating material costs for building have increased housing prices significantly during the pandemic. Montana is in the top five states for housing price increases following the pandemic, increasing 24% in 2021.
Lifelong Montana residents are being priced out of rental homes or their own mortgage thanks to a new type of ‘land grab’ and moving to Montana for a better quality of life. Bozeman, once a cowboy university town, is now one of the fastest growing cities in the country. The median sale price for a single-family home in Gallatin County in 2021 is $648,000, far out of reach for an average middle class working family. The average cost of housing in the Flathead practically doubled in less than two years. The rental market is just as dire, pricing hardworking Montanans out of neighborhoods where they thrived for years and forcing seniors to choose between paying rent and paying for prescriptions.
At the same time, Montana’s four billionaires are now worth about $19.5 billion. It’s a safe bet that the ultra-wealthy are not struggling to pay for rent or gas while they shop for luxury homes in Montana. Nor do they need to sell assets to finance their lavish lifestyle. In fact, most wealthy people avoid selling assets since passing them on to heirs allows them to avoid ever paying taxes, while selling assets triggers taxes. This is another loophole that enables concentrated dynastic wealth, creating a permanent upper class of wealthy Americans with the resources to buy their own laws and operate by their own rules.
If Congress took action to make the rich abide by some of the same tax rules that apply to everyone else, the rich would stay rich but the rest of us–who helped make people like Jeff Bezos and Elon Musk rich in the first place–would benefit from that wealth too.
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