"Republicans Complain Taxing The Rich Is Unfair As New Report Shows Millionaires’ Wealth ‘Exploding’"
Of course, the truth is that those Americans don’t have any federal income tax liability because they don’t make enough to fall into even the lowest income tax bracket, a result that has been exacerbated by the Great Recession. These Americans also pay a hefty proportion of sales and payroll taxes. In fact, when payroll taxes are included, less than a quarter of American households pay no federal taxes, and the vast majority of those are the elderly or people with very low incomes (including students and the unemployed).
The upshot is that income inequality has led to a situation in which huge quantities of wealth are concentrated in the hands of the few, which manifests itself in the number Republicans are citing to justify their opposition to raising taxes on the rich. And, as if we needed any more evidence, a report being released today by the consulting firm Deloitte shows that wealth concentrated in the hands of millionaires is “exploding”:
Total wealth among millionaire households could more than double over the next decade in 25 major economies, growing from an estimated $92 trillion this year to $202 trillion in 2020. The study shows the United States and Europe will continue to have the greatest concentrations of wealth…The wealth of millionaire households in the U.S. could reach $87 trillion in 2020, up from $39 trillion in 2011. In 2020, 43 percent of the world’s wealth held by millionaire households is predicted to be in the U.S.
While the trend in recent decades has been towards more income inequality — with the vast majority of income gains in the last three decades going to the richest one percent — the trend in tax rates has been going the other way. At the moment, just the richest 400 Americans hold more wealth than the bottom 50 percent of Americans combined, but effective tax rates on the richest 400 have fallen by half since 1995. My colleague Zaid Jilani noted today that income inequality in the U.S. is as bad as it is in places like Uganda and Pakistan.
As Sen. Robert Menendez (D-NJ) said yesterday, “listening to the rhetoric used makes it sound like a significant portion of Americans are around, simply sitting, doing nothing, waiting for the taxman to bring riches. It seems to me that reality is far different.” Indeed, Republicans are either arguing that taxes need to go up on the poor and the middle-class or they are saying that the rich should never see their taxes go up, no matter how much wealth they accumulate.