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There are other ways to tax the wealthy
A majority of Americans are increasingly open to raising taxes on the wealthy. Lawmakers like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have proposed revolutionary ways of reducing wealth inequality. But Andrew writes that there are other ways of bridging the gap — ways that stand a chance of becoming law.
Start with the estate tax. Gary Cohn, the former White House economic adviser, once said, “Only morons pay the estate tax.” Andrew recommends starting there, writing that no fix could work without this. One solution: taxing inherited property at its current worth to capture gains in value made over decades. According to the Congressional Budget Office, closing this loophole could raise more than $650 billion over a decade.
Raise capital gains rates for the wealthy. Andrew suggests introducing two new tax brackets — say, a marginal 30 percent bracket for those earning over $5 million and a 35 percent bracket for over $15 million — so the U.S. could raise money without discouraging investment.
Close the carried-interest loophole. Current tax law allows executives at investment firms to have bonuses taxed as capital gains, not ordinary income. Scrapping that — an idea that President Trump has supported — has clear appeal to Americans’ basic sense of fairness.
Reconsider breaks for charitable giving. At a minimum, Andrew writes, “we ought to consider whether the wealthy should be allowed to take deductions when they move money to their own foundations, or whether they should only take a deduction when the money is spent.”
Support the I.R.S. “The agency is so underfunded that the chance an individual gets audited is minuscule,” Andrew writes.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
There are other ways to tax the wealthy
A majority of Americans are increasingly open to raising taxes on the wealthy. Lawmakers like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have proposed revolutionary ways of reducing wealth inequality. But Andrew writes that there are other ways of bridging the gap — ways that stand a chance of becoming law.
Start with the estate tax. Gary Cohn, the former White House economic adviser, once said, “Only morons pay the estate tax.” Andrew recommends starting there, writing that no fix could work without this. One solution: taxing inherited property at its current worth to capture gains in value made over decades. According to the Congressional Budget Office, closing this loophole could raise more than $650 billion over a decade.
Raise capital gains rates for the wealthy. Andrew suggests introducing two new tax brackets — say, a marginal 30 percent bracket for those earning over $5 million and a 35 percent bracket for over $15 million — so the U.S. could raise money without discouraging investment.
Close the carried-interest loophole. Current tax law allows executives at investment firms to have bonuses taxed as capital gains, not ordinary income. Scrapping that — an idea that President Trump has supported — has clear appeal to Americans’ basic sense of fairness.
Reconsider breaks for charitable giving. At a minimum, Andrew writes, “we ought to consider whether the wealthy should be allowed to take deductions when they move money to their own foundations, or whether they should only take a deduction when the money is spent.”
Support the I.R.S. “The agency is so underfunded that the chance an individual gets audited is minuscule,” Andrew writes.
____________________________
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
