While working people pay taxes on every paycheck, billionaires can go years without paying any federal taxes. (Photo: Ronda Churchill)
It’s been a rough couple of years for American workers. First, working families were battered by a pandemic that caused massive unemployment, loss of health coverage and financial hardship for tens of millions of working people. The unemployment rate in Nevada hit 28% during the COVID-19 shut down which impacted many casino workers like myself.
Thanks to swift bipartisan action in 2020,,Congress passed historic relief packages that helped workers, extended health coverage and protected the majority of Americans from COVID’s worst harms. The unemployment rate fell from 14.7 percent in April 2020 to 3.5 percent this summer, millions of people got affordable healthcare coverage that brought the number of uninsured people to an all-time low and poverty actually declined even as the pandemic raged on. Nevada has been able to come back and our unemployment rate is currently at 4% and many people who didn’t know when they would be able to work again like myself, have come back to the workforce.
But even as infection rates declined, the pandemic’s impact lingered. Rising inflation over the past year threatened recovery as people found themselves paying record amounts for fuel, goods and services. Large corporations, seeing an opportunity to fatten profits, used pandemic conditions as a pretext for price-gouging consumers. Since the spring of 2020, corporations in the non-financial sector have raised prices by an annualized rate of 6.1%—a huge increase over the 1.8% annual price growth between 2007–2019. Over half of this increase (53.9%) contributed to bigger profit margins, while labor costs accounted for less than 8% of the increase. In 2021, corporate profits surged by 35%, giving American corporations their most profitable year since 1950. But even as CEO pay and shareholder earnings soar, workers’ real wages–despite some increases– failed to keep up with the higher cost of living.
Though corporations made more profits, they mostly didn’t pay more taxes. In 2020, for instance, 55 of the nation’s largest profitable firms like Nike, FedEx and Salesforce, paid zero in federal taxes thanks to loopholes and breaks in the tax code. Neither did their billionaire CEOs and shareholders. Billionaires increased their wealth by an astonishing $1.7 trillion, or 57 percent, between March 2020 and March 2022. In Nevada, 16 billionaires increased their wealth by 60% over this two-year period.
Like their corporations, the ultra rich have either avoided taxes or paid a much lower rate than middle class workers thanks to special tax breaks that help them hoard their wealth. Research shows that the nation’s 400 richest billionaire families paid an average tax rate of just 8.2 percent between 2010 and 2018. Middle class people paid an average tax rate of 13.3 percent in 2019.
A rigged tax system is something we can fix and, thankfully, congressional Democrats were able to help pass the Inflation Reduction Act which lowers the price of prescriptions, makes health insurance premiums for Affordable Care Act coverage more affordable, and cuts energy costs through its climate provisions which also reduce pollution and harmful carbon emissions. It also makes the tax code more fair by requiring the nation’s richest corporations–those making over $1 billion in profits annually– pay a 15% minimum corporate tax. It provides the IRS (Internal Revenue Service) resources to track down the nation’s richest tax cheats so they will finally have to pay what they owe like the rest of us. No one making less than $400,000 a year will see higher taxes.
There is still a lot more to do to make our system more fair and equitable but at least we’re headed in the right direction. Congress should pass a Billionaires Income Tax that requires the ultra-rich to pay taxes on their increased wealth the same way workers pay on wages. Everyday working Nevadans like myself should not have to pay more in taxes than the billionaires that live in our state and all over the country. The everyday person will have to prepare themselves for tax season because they don’t have the resources to know what loopholes to use. When I’ve had to pay taxes I’ve had to set up payments because I can not afford to pay the sum upfront even though to a billionaire like Elon Musk it would be nothing. While working people pay taxes on every paycheck, billionaires can go years without paying any federal taxes. It’s time for the tax system to tax billionaires and for them to pay what they owe. The system should be fair and not benefit those at the top.
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