October 11, 2021
A lynchpin in the hopeful passage of the $3.5 trillion infrastructure bill is that “the rich” will pay for it all. Well, I wouldn’t count on it.
Tax-happy folks say it’s only fair to make wealthy Americans and corporations pay for everything. I’m talking about infrastructure, healthcare, schools, and more.
At the same time, U.S. Representative Alexandria Ocasio-Cortez (AOC), an unquestioned member of the “fair share” camp, was spotted wearing a designer gown adorned with the phrase “tax the rich.” She was at the Met Gala, which was $35,000 to attend (or $200,000 per table).
Talk about irony.
AOC and others claim $2.9 trillion in taxes could be collected from wealthy Americans and corporations. It would come from increased income taxes, higher corporate tax rates, and a jump in the capital gains tax. Another $900 billion would come from more aggressive tax compliance efforts.
The thing is, we’ve heard this before and none of it is true. In fact, a new report from the Joint Committee on Taxation showed how planned spending and tax policies would hike taxes on many Americans, including those making as little as $30,000 per year.
“The rich” won’t pay because they already pay more total taxes than anyone. In 2018, the top 1% of earners took in 20.9% of all income but paid 40.1% of all income taxes. The top 1% of earners also paid more in taxes in 2018 than the bottom 90%, which paid 28.6% of taxes. Meanwhile, 61% of Americans paid no taxes last year.
What was that about fairness?
Also, don’t forget “the rich” can employ armies of accountants and attorneys to find loopholes. Therefore, it’s likely revenue estimates from these tax efforts will fall short.
Ultimately, “tax the rich” really trickles down to the everyday American. Even if you took every American billionaire’s assets, it wouldn’t cover the cost of the proposals.
So, there’s a gap.
It’s bridged in part by higher inflation, which is at a 20-year high. New taxes and fees for infrastructure will help cover the gap too because it will cost us more for gas, heating our homes, food, and more.
Who pays for all that? Not “the rich.”