PRESS RELEASE – US Billionaires Doubled Wealth During Pandemic – Should Pay Fair Share of Taxes

West Virginians for Affordable Health Care

Health Care for America Now

Americans for Tax Fairness

 

ON THIS TAX DAY, WEST VIRGINIA’S WORKING FAMILIES ARE PAYING

 THEIR FAIR SHARE BUT AMERICA’S BILLIONAIRES ARE NOT! 

$2 Trillion, or 70%, of the Pandemic Wealth Gain of Nation’s 740 Richest May Well Go Untaxed, Making Case for President Biden’s Proposed Billionaires Income Tax

Passage of Billionaires Income Tax Could Deliver up to $335 million a Year to West Virginia if Distributed Like Current Federal Grant Funds

(Download PDF of Press Release Here)

Charleston, WV – On Tax Day, April 18, 2022, West Virginia’s working families are once again paying their fair share and billionaires are not. American billionaires saw their net worth climb by a collective $2 trillion, increasing 70%, during the first two years of the pandemic to a staggering $5 trillion, according to Forbes data analyzed by Americans for Tax Fairness (ATF). [See table below – also complete data here] But none of that wealth growth—the main source of billionaire income—may ever be taxed!

The total number of U.S. billionaires increased from 614 to 741 over the two-year period from March 18, 2020 to April 5, 2022. Among the notable increases in wealth:

  • Elon Musk: The driving force behind Tesla and SpaceX saw his wealth skyrocket over 11-fold, or $266 billion, to settle at $290 billion.
  • Jeff Bezos: The man who started Amazon is now worth nearly $190 billion, after a $77 billion leap in wealth during the pandemic.
  • Larry Page and Sergei Brin: The Google co-founders saw their wealth climb more than 133% – and are now worth $119 billion and $114 billion, respectively.

Loopholes often allow billionaires to pay little or no federal income tax. An expose last year by ProPublica based on IRS data revealed that Elon Musk, Jeff Bezos and other top billionaires paid zero federal income tax in several recent years. It determined that the top 25 billionaires paid just a 3.4% tax rate between 2014 to 2018 when the growth in their wealth is counted as income. White House economists have determined the nation’s 400 richest billionaires paid a tax rate of only 8.2% over a recent nine-year span when the increased value of their corporate stock was counted as income. The average federal income-tax rate for all taxpayers was 13.3% in 2019. 

Billionaires and other very wealthy people overwhelmingly generate income not from a job or small business, but from the growth in the value of their investments. But that form of income is never taxed unless the investments are sold. Yet the very wealthy do not need to sell their assets to turn the increasing value of their wealth into cash income; instead, they use their swelling fortunes to secure special low-interest loans allowing them to live lavishly without paying income taxes. Moreover, a lifetime of such income growth from assets can be passed onto the next generation tax-free

Name

Net Worth
Mar. 18, 2020
($ Millions)

Net Worth
Apr. 5, 2022
($ Millions)

24 Month Wealth Growth
($ Millions)

24 Month % Wealth Growth

Number of Billionaires

614

741

 

 

TOTAL

$2,947,500

$5,002,720

$2,055,220

69.7%

Elon Musk

$24,600

$290,290

$265,690

1080.0%

Jeff Bezos

$113,000

$189,827

$76,827

68.0%

Bill Gates

$98,000

$135,022

$37,022

37.8%

Warren Buffett

$67,500

$124,193

$56,693

84.0%

Larry Page

$50,900

$119,037

$68,137

133.9%

Larry Ellison

$59,000

$116,162

$57,162

96.9%

Sergey Brin

$49,100

$114,297

$65,197

132.8%

Steve Ballmer

$52,700

$99,576

$46,876

88.9%

Mark Zuckerberg

$54,700

$82,713

$28,013

51.2%

Michael Bloomberg

$48,000

$82,000

$34,000

70.8%

Jim Walton

$54,600

$69,644

$15,044

27.6%

Alice Walton

$54,400

$68,694

$14,294

26.3%

Rob Walton

$54,100

$68,368

$14,268

26.4%

Charles Koch

$38,200

$62,971

$24,771

64.8%

Julia/David Koch

$38,200

$62,971

$24,771

64.8%

Source: Forbes data from March 18, 2020, and April 5, 2022, analyzed by Americans for Tax Fairness and available here.

 

 

Congress can close this massive tax loophole through a billionaires income tax, such as recently proposed by President Joe Biden and earlier by Sen. Ron Wyden (D-OR), the Senate’s chief tax writer. A comparison of the two proposals can be found here. Both proposals would tax investment gains of the superrich more like the wages of workers are taxed now. Requiring billionaires to pay a fairer share on the growth in value of their assets would make the tax system more equitable and generate revenue that would greatly benefit the economy and increase services and opportunities for millions of Americans. 

President Biden’s Billionaire Minimum Income Tax would raise $360 billion over 10 years exclusively from the richest 0.01% of Americans, each worth at least $100 million. The Billionaires Income Tax proposed by Sen. Wyden would raise $555 billion over 10 years from about 700 billionaires

If that revenue was distributed to the states based on historical levels of federal grants to state budgets, West Virginia could gain about $220 million or $335 million a year for 10 years, respectively, from the Biden and Wyden billionaires tax plans. This is based on budget data from the National Association of State Budget Officers. Between 2019 and 2021, federal grant funds made up an average of about 28% of West Virginia’s state budget.

Federal grant funds to states pay for numerous programs and services: healthcare (Medicaid and CHIP), childcare, food and nutrition (SNAP, WIC), education (Head Start, Title I and IDEA),

housing, transportation (highways, airports, and mass transit), public safety and much more. These funds represent nearly one-third of state budgets on average and nearly one-quarter of state and local budgets combined. Additional funds generated by a billionaire’s income tax could be used to lower costs to the state’s working families for vital services like healthcare, childcare and housing.

The potential of $220 million or $335 million a year in federal grants would add about 1.2% or 1.8% to state’s budget, respectively, based on an average of the state’s budgets between 2019 and 2021.

“Most working families’ biggest asset is their home, not stocks and bonds. Recently my county assessor sent me a note informing me that the value of my home had increased and that increase would be reflected in a hike in my property taxes,’ shared Gary Zuckett, Director of WV Citizen Action. “If working folks have to pay more tax when their property increases in value, then our nation’s billionaires should also pay up when their investments appreciate!”

 

“The failure to tax increases in billionaire wealth from skyrocketing corporate stock and other investments is the worst loophole in our loophole-ridden tax code. Workers pay tax on their income all year, every year. Simple justice demands that billionaires do the same,” said Frank Clemente, executive director of Americans for Tax Fairness. “Congress should close this loophole as part of the legislation members are now negotiating to help families cope with rising prices and make major investments in clean energy, all paid for by more fairly taxing the rich and corporations.”

The public overwhelmingly favors a billionaires income tax: 64% of respondents in a recent national poll supported Senator Wyden’s plan. (Biden’s plan was not tested in this poll.)  

This billionaires’ bonanza has played out opposite from the general pandemic experience: 497,864 West Virginia residents have contracted COVID-19 and 6,835 have died from it. Hundreds of small businesses have closed, daily life has been disrupted and the cost of everything from housing to gas has consumed a greater share of household incomes. Although prompt and ample federal action prevented much worse economic consequences from COVID and helped to speed recovery, businesses and families will once again face perils as many of these interventions are set to expire soon.  

Millions of families, for instance, could face steep increases in healthcare premiums or loss of insurance coverage in the second half of this year as pandemic responses fall away:

  • Medicaid Coverage: Early in the pandemic, as millions of Americans lost jobs and healthcare coverage, Congress passed the bipartisan Families First Coronavirus Response Act that covered many more people. The federal government increased matching funds to states and ensured that Medicaid enrollees would be continuously covered through the duration of the public health emergency despite income fluctuations or other factors that would ordinarily disqualify them. Once the public health emergency expires—which it is expected to do this year—as many as 13 million people could lose health coverage over the next 12 months, according to an Urban Institute study. In West Virginia about 90,000 of the state’s 570,000 Medicaid patients could lose their coverage, according to an Urban Institute study (see table 2).
  • Affordable Care Act (ACA) Coverage: Congress and the Biden Administration also took action to make private insurance more affordable during COVID by passing the American Rescue Plan, which provided enhanced premium assistance to help more people buy ACA coverage. This resulted in record high enrollment in insurance marketplace plans this year. However, the enhanced premium assistance that saved individuals over $800 last year, will expire at the end of 2022 if Congress does not take action. This will price millions nationwide out of coverage, among them many of the roughly 19,000 ACA policy holders in West Virginia.

Continuing affordable healthcare coverage for millions of America’s working families would cost about $50 billion a year. That cost could be covered by Sen. Wyden’s tax on just the nation’s 700 or so richest households, preventing hundreds of thousands of West Virginian’s from losing health care.

“There is no question that billionaires can buck it up and pay their fair share of taxes. During the COVID pandemic, billionaires saw their net worth more than double while West Virginia workers struggled to make ends meet. Fair share taxes yes, but the billionaire tax also is about raising funds to provide real financial help to hard-working families”, offered Dr. Jessie Ice, Executive Director, West Virginians for Affordable Health Care. “It is about workforce development.  When the very richest pay fair share taxes, our nation can afford to help working moms pay for child care, working dads pay health insurance premiums, working families pay for home care services so that West Virginians can go to work without putting grandma in the nursing home.” 

“It’s time to get our priorities straight. No one in our country, no matter where they live or how much money they have, should lose healthcare because they can’t afford coverage while billionaires get richer and avoid paying any taxes toward supporting the economy,” said Margarida Jorge, Executive Director of Health Care for America Now.

West Virginia organizations are calling on the state’s congressional delegation to take a position on increasing taxes for billionaires through the enactment of a billionaire’s income tax like those proposed by President Biden and Senator Wyden. As Congress prepares to debate a package that will include some tax increases for the wealthy, local advocates are asking every Member of their delegation to endorse a resolution calling for billionaires to pay their fair share.

Current proposals to create a billionaire’s income tax represent a historic change in direction away from decades of tax breaks and wider loopholes for the wealthy that have contributed to a growing wealth gap between the nation’s richest families and everyone else. President Trump’s 2017 Tax Cuts and Jobs Act (TJCA), the last major tax legislation passed by Congress, provided $1.9 trillion in tax giveaways mainly to the rich and corporations while working and middle income families saw few benefits.

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