It’s that time of year again–tax season. And on the campaign trail and Capitol Hill, Democrats are on the warpath about the super-rich not paying their fair share in taxes.
Sen. Elizabeth Warren’s plan for a wealth tax is the major policy proposal of her 2020 campaign. “Millionaires and billionaires” are still a centerpiece of Sen. Bernie Sanders stump speeches. And Alexandria Ocasio-Cortez, the Democratic Socialist freshman representative from New York, advocates for raising the top marginal tax rate to 70% (it’s currently 37%).
These politicians have a point: ten percent of Americans now earn nearly half of all the country’s income. Economic inequality is at near-record levels, and is growing. But over the last 30 years, the tax rates paid by high-income people have actually come down.
“More of their income comes from investments and so-called capital income. And through lobbying or through changes of policy, they have gotten the rates for high-income people and for capital income cut over time,” said Austan Goolsbee, the former Chair of President Obama’s Council of Economic Advisers and an economics professor at the University of Chicago’s Booth School of Business. “The rich could definitely afford to pay a lot more as a share of their income than they pay now.”
But taxing the wealthy isn’t as simple as raising the rates. So, ahead of #TaxDay, VICE News asked Goolsbee to walk us through ways to narrow the gap.
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