This story was originally published by ProPublica.
Last year, ProPublica began publishing “The Secret IRS Files,
” a series that has used a vast trove of never-before-seen tax information on the wealthiest Americans to examine their tax avoidance maneuvers.
, the Oregon Democrat who chairs the Senate Finance Committee, is one of the top experts in Congress on tax matters and an advocate of raising taxes on the rich. He has proposed a bill that would build on his past efforts
to tax the wealthiest. The most recent legislation would tax people with $1 billion
in assets (or $100 million in income for three years in a row) not just on their income as it is traditionally defined but also on the growth of their wealth each year. It would take a bite out of so-called unrealized gains, taxing a rise in the value of the stocks, bonds and other assets owned by the ultrawealthy — even if they didn’t sell the assets. For assets that are not readily traded, Wyden’s bill would impose a deferred tax, an annual interest charge that would be added to any capital gains tax owed when the wealthy person sells the asset.
Wyden’s bill seeks to counteract a technique that the ultrawealthy can use to avoid income taxes: They hold on to their assets and simply avoid the income — and tax — that comes when they sell them. The rich can live lavishly by employing a technique known as “Buy, Borrow, Die
,” in which they buy or build assets, borrow against them and then avoid estate and gift taxes when they die.
We checked in with the senator to ask about his proposal and the prospects for any new laws in the coming year.
The interview that follows has been edited and condensed for clarity.
As you know, we’ve been reporting on how little tax the ultrawealthy in America pay. Our reporting for the first time has put names and faces and specifics on this issue by pointing out that Jeff Bezos and Elon Musk and the like have paid zero in taxes in recent years. And that the ultrawealthy really pay a low rate when compared to their wealth growth. I’m wondering if seeing these numbers has had an effect on your thinking, and if you think there’s been an effect on colleagues of yours who may not have had this full appreciation the way you did?
The answer is really yes and yes. It has affected me, and it’s affected, I believe, other senators. And the fact is my bill raises $557 billion, and it does so by simply requiring billionaires to pay taxes every year, the way nurses and firefighters do. At the same time, I feel very strongly — and this is the point where I think we’ve made real headway — this is about more than revenue. This is about fixing a thoroughly broken tax code and showing working people in America that billionaires don’t get to play by a different set of rules. My view is the big scandal is what’s legal. When you walk these people through it, it causes people to lose faith in government, lose faith in democracy.
What really causes people to lose faith? I think the fact that billionaires occasionally pay zero in taxes will strike most people as wrong. But are there other things that strike you as really jeopardizing their faith in the system?
The fact is it’s so brazen. Some of the leading conservative publications write articles: “Buy, Borrow, and Die if you want to pay little or nothing. Here is the plan.” I tell people about this at my town hall meetings and everybody starts hollering: “Don’t let people back here get played as suckers by letting billionaires pay little or nothing for years on end while those of us who represent a vast majority of Americans get hammered.”
We’ve been struck that some of the most loyal and closest readers of our stories have been the wealth advisory industry, figuring out a how-to manual. This is not what we intended ...
You have a proposal, which you alluded to, that would raise in your estimate almost $600 billion over 10 years. What are the prospects for that? Because you re-upped a version of that last year and it was quickly shot down by Joe Manchin, as I understand.
A couple of things, first of all, Joe Manchin has always said that he believes that the wealthiest should pay their fair share. And that’s very much in sync with what we say. And I go on to say that paying your fair share and being successful are not incompatible. That’s one of the things that special interests that have opposed my proposal say: “Oh, this is going to keep people from being successful.” Are you kidding me? Continue Reading