San Francisco Millionaires Want to Be Taxed More

SAN FRANCISCO (CN) – The attendees of the conference at first appeared bemused, as they congregated in a line in a slick cafe/bar in San Francisco’s famous Mission District. But as they proceeded through the restaurant portion replete with cold-brew coffee and turmeric ginger teas, they passed a bookshop hawking a selection of progressive-oriented tomes and slowly got their bearings.

By the time they entered the back room of Manny’s, the nonprofit cafe/bookshop/civic gathering space, they realized they were in the right place to discuss the single organizing idea that brought them all there on Wednesday afternoon – tax policy.

But rather than focus on algorithms, the IRS or the marginal versus effective rate, the conference featured a collection of activists promoting an increasingly large plank of progressive policy: tax the rich.

The Tax the Rich Conference was put on by a group calling itself the Patriotic Millionaires, comprised of individuals who earn more than $1 million per year or have accumulated at least $5 million. But unlike a healthy segment of high-income earners and wealthy individuals, they weren’t fighting to keep as much money as possible, but organizing to get the government to take more of it.

“The thing is, I’m just as greedy as the other guy,” said Morris Pearl, chair of the Patriotic Millionaires. “The thing is, I’m greedy for something different than what he’s greedy for, I’m greedy for the kind of a country for my kids to grow up in that is the same kind of country that I grew up in.”

Pearl and the others agreed that the largest difference between the country currently and as it was in the late 1970s is an economic system rigged by the rich to make them exceedingly richer, compounding inequality and distorting a political system to favor the elite.

Pearl and the slate of other speakers — economists, professors, lawmakers, think tank policy wonks and activists — trotted out the trove of data to demonstrate the staggering levels of inequality.

“In the late 1970s, the top 1% of highest income earners accounted for about 10% of total income in the U.S. while the bottom 50% earned about 20% of the total income” said Gabriel Zucman, an economist at the University of California, Berkley. “Today, it’s the opposite. These two groups have switched their income share.”

Zucman, along with Emmanual Suez, another UC Berkeley economist, recently published an influential paper about the state of wealth inequality since 1913 and are consulting with Democratic candidates Elizabeth Warren and Bernie Sanders about potential policy solutions.

Their chief proposal includes a wealth tax, which would levy an additional 2% tax on the total value of personal assets in excess of $50 million and a 3% levy on assets above $1 billion (Warren and Sanders have both proposed 6% on assets above $1 billion).

Wealth taxes have proven traditionally controversial in economic circles, with critics pointing to the fact that many European countries abandoning such policies in recent years.

But Zucman said it’s because the particular policies those countries implemented incentivized tax avoidance and failed to enforce laws.

“Tax avoidance isn’t part of the laws of nature,” Zucman said, noting the United States policy of making citizens pay income taxes regardless of where in the world they earn their money.

The speakers unveiled a bevy of other policy proposals including a millionaire surcharge, a higher tax on capital gains and tax penalties for companies who have a large gap between CEO pay and the median worker salary.

California State Senator Nancy Skinner discussed her bill, SB 37, which proposes to raise the corporate tax rate on the top .2% of corporations that do business in the state. The rate would be increased for corporations with a CEO making a salary greater than 50 to 1 to their average worker.

Such proposals are broadly popular, according to activists.

“When I go back home to Minnesota, and I live in a red part of the state that went 30% for Trump, I can talk to anybody about the CEO pay gap,” said Sarah Anderson, Institute for Policy Studies, who is working on a national version of SB 37.

But while many of the speakers and attendees railed against the Republican tax cut bill passed in the early stages of the Trump administration, many speakers were also critical of Democrats in thrall to corporations.

“The problem is still with us after Donald Trump is long gone,” said Robert Reich, an economist who also teaches at UC Berkeley.

Reich served as U.S. Labor Secretary under Bill Clinton in the 1990s and said he saw firsthand how corporations and wealthy individuals have access to lawmakers and are able to turn the political and economic system to their own account.

“The Democratic Party has abandoned, not just the white working class, but the entire working class,” he said.

There are many things to be done, Reich said, but a more progressive tax system for higher income earners, or taxing the rich, is a good start.

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