You Just Paid Your Taxes. Here’s How the Superrich Avoid Them.
With taxes due, it’s an apt time to consider some of the ways our federal tax code favors America’s wealthiest, and how a subset of those fortunate folks will use every trick in the book to game the system even further to their advantage.
Much of it revolves around the way the IRS taxes long-term investment profits—a.k.a. capital gains. President Joe Biden is asking people to pay a lot more on these profits. For decades, after all, the tax code has rewarded investors, particularly those at the very top of the nation’s wealth and income distributions, with very favorable rates. This policy is based on the long-debunked notion that the benefits of giving rich people even more money to invest will eventually trickle down and lift up the masses via job creation and so forth. (One report from the nonpartisan Congressional Research Service found no evidence that reducing tax rates for America’s upper crust increased the size of the nation’s economic pie, “but there may be a relationship to how the economic pie is sliced.”) [Read more.]