Yes, the tax cuts benefit the billionaire class, whose effective tax rate is among the lowest in the country. And yes, they make profits for large corporations, many of which pay no federal income taxes. The outrageous tax fraud committed by the ultra-wealthy has understandably angered the American public, exacerbated by Congressional inertia on the issue.
But we need to recognize that the tax cuts also support the wealth of millions of wealthy Americans who take advantage of exemptions that are very difficult, perhaps impossible, to defend on practical or moral grounds. there is.
Tax breaks on dividends and capital gains (gains on the sale of assets such as stocks and art that are taxed at lower rates than other sources of income) cost the government an estimated $153 billion last year. In 2022, 92% of those benefits went to households earning more than $200,000, and 73% went to households earning more than $1 million.
A recent study found that inheritance explains more than 60% of the nation's wealth inequality, and U.S. law allows wealth to be passed on to heirs almost tax-free. Suppose you buy his $1,000 stock and its value increases to $49,999 over your lifetime. And tell your kids that when you die. Even if the kids turn around and sell the stock the next day when it's worth his $50,000, he still gets his $1 for the growth that occurred while owning the stock. You will only pay tax on.
Overall, about half of all major income tax expenditures—provisions that exclude or reduce income for tax purposes, resulting in significant revenue losses for the government—flow to households in the top 20 percent of the income distribution. $500 billion a year is sent to America's wealthiest families to build more affordable housing, deepen investment in public education, reduce child poverty, and close the black-white wealth gap. It could have helped shrink it, and even made us all feel safer. I was able to go to the dentist.
