Billionaires Pay Lower Tax Than WORKING CLASS

Summary

The video script discusses the disparity in tax rates between the richest Americans and the working class. It highlights that in the 1960s, the wealthiest 400 Americans paid over half of their income in taxes, but by 2018, this had dropped to approximately 23%. In contrast, the bottom half of income earners pay about 24% of their income in taxes. The script also addresses the issue of tax avoidance by the ultra-wealthy, such as Elon Musk and Jeff Bezos, through mechanisms like stock holdings and loans against wealth, which allows them to minimize their tax liability. Furthermore, it criticizes the current tax system as being regressive and unfair, with significant implications for social inequality and the funding of public services. The discussion emphasizes the need for a more progressive tax code and the political challenges in achieving such reforms due to the influence of money in politics and the ideological divide.

Takeaways

• 📉 The wealthiest Americans are currently paying a lower tax rate than the working class, with the richest 400 paying approximately 23% of their income in taxes, compared to the bottom half of income earners who pay around 24%.
• 📈 There has been a significant drop in the effective tax rate for the richest Americans from over 50% in the 1960s to the current 23%.
• 💼 Despite claims that billionaires like Elon Musk and Jeff Bezos pay a lot in absolute terms, their effective tax rate is still notably low, highlighting the disparity in wealth.
• 💡 The script points out that the idea of a progressive tax code, where wealthier individuals are taxed at a higher rate, is largely a myth in the current American system.
• 🏦 The reduction in taxes, such as the corporate tax rate drop from 35% to 21% under Trump's administration, and the diminished estate tax, has led to a significant decrease in tax revenue.
• 💸 Billionaires often avoid paying taxes by not taking direct income from their companies and instead taking loans against their wealth, thus avoiding taxable events.
• 🔄 The estate tax is no longer effective in capturing tax revenue on the wealth of billionaires, as they can pass on their wealth to their heirs without significant taxation.
• 💔 The current tax system is seen as unfair, particularly to those who are the backbone of the economy, such as small business owners and wage earners.
• 🚫 There is a disconnect between public sentiment, which largely favors taxing the wealthy more, and the actual policies enacted, influenced by money in politics and the influence of the elite.
• 📉 The tax code has become increasingly regressive over the years, with both Republican and Democratic administrations contributing to the divide and loss of federal revenue.
• 🌐 The script suggests that the unfair tax burden and wealth disparity have significant implications for social discontent and the social contract, contributing to a growing divide in American society.

Q & A

What was the tax rate paid by the 400 richest Americans in the 1960s?

In the 1960s, the 400 richest Americans paid more than half of their income in taxes.

What is the approximate tax rate paid by the wealthiest individuals in America as of 2018?

By 2018, America's wealthiest individuals pay approximately 23% of their income in taxes.

What is the effective tax rate for the bottom half of income earners in the United States?

The bottom half of income earners pay roughly 24% of their income in taxes.

How does the tax burden of the very richest Americans compare to lower income Americans?

The effective tax rate for lower income Americans is now higher, and in some cases, orders of magnitude higher than the absolute richest Americans.

What is a common argument made in defense of the tax burden of billionaires like Elon Musk?

A common argument is that individuals like Elon Musk pay more in taxes, in absolute terms, than any other American in history due to their significant wealth and capital gains.

How has the tax code changed over the years to affect the wealthy and the working class differently?

The tax code has become less progressive, with the very wealthiest paying a lower effective tax rate, while the working class continues to pay a higher percentage of their income in taxes.

What is the significance of the estate tax in the context of wealth concentration?

The estate tax has been significantly reduced, allowing billionaires to pass on their wealth to their heirs without a substantial tax burden, contributing to wealth concentration.

What is the current state of the corporate tax rate in the United States?

The top corporate tax rate in the US was cut from 35% to 21% under the Trump administration.

How do billionaires often avoid paying taxes on their wealth?

They often take loans against their wealth to fund living expenses, avoiding taxable events, and rely on stock value increases, which are not taxed until sold.

What are the implications of the current tax system on the social contract and public services?

The current tax system has significant implications for the funding and financing of society, potentially depriving the public of services like universal healthcare and contributing to social discontent.

What is the general public sentiment towards taxing the wealthy more?

There is a populist and popular majority sentiment in favor of shifting the tax code back towards a more progressive direction where the wealthy are taxed more.

How does the current tax system affect the perception of fairness among the American public?

The current tax system is seen as unfair by many Americans, contributing to a sense of social discontent and a perception that the system is not set up to serve the average citizen.