Taxing Billionaires the Right Way

Taxing Billionaires the Right Way
Getty Images

The single mom appeared at the church in Davenport, Iowa, where Vera Kelly volunteered and asked for some food to share with her children.

But not just any food, Kelly recalled, noting the woman only wanted items she could keep in the car where the family lived and cook on the charcoal grill that served as their kitchen.

Civic-minded activists like Kelly do all they can to assist the less fortunate and lift up their communities. But only fixing America’s broken tax system, as President Joe Biden has proposed, will force the super-rich to pay their fair share and curb the rampant economic inequality that’s turned the nation into a land of haves and have-nots.

“They have the money. We don’t have it,” Kelly, a member of Steelworkers Organization of Active Retirees (SOAR) Chapter 11-4 and the vice president of the Davenport NAACP, said of America’s billionaires. “Some of them got it by hook or by crook, and we worked honestly.”

“If you’re a billionaire, you’re never going to go broke,” added Kelly, who supports Biden’s plan calling for the wealthiest citizens to finally begin paying what they’ve long owed. “They can live off the interest on their money.”

The 77-year-old Kelly, who spends Saturday mornings distributing boxes of cereal, sugar, frozen chicken and other items at a local food pantry, worked 32 years at the former Alcoa plant, now operated by Arconic, near her home. Her husband, B.W. Kelly, who died in November 2020, worked at Deere & Co. for 33 years.

The two paid taxes on every dime they ever earned, considering it not only a duty but a privilege to support America’s social programs as well as essentials like infrastructure funding, medical research and the national defense.

But instead of holding up their end like the Kellys, America’s richest citizens let the rest of the country carry them. A rigged system lets billionaires exploit tax-avoidance tricks unavailable to the masses. The uber-rich shirk their obligations to society and freeload off of everyone else while squandering ever-growing sums on jets, mega-yachts, spaceships and even private islands.

“The rich get richer and the poor get poorer,” Kelly said, referring to the income inequality that’s been growing for decades. “That’s the way that happens.”

“They look down on people,” she said of billionaires. “They think they’re entitled.”

Elon Musk, CEO of Tesla Inc and SpaceX, overtook Amazon founder Jeff Bezos last year to become the richest person on earth. Musk currently has a net worth of about $271 billion.

Yet in 2017, Musk paid only $65,000 in federal income taxes, and in 2018, he paid none, according to an investigation by ProPublica. Between 2014 and 2018 overall, Musk had a “true tax rate” of 3.27%, much lower than the average rate paid by steelworkers, teachers, health care professionals and other working people.

Adding insult to injury, Musk reached into the pockets of these ordinary Americans to line his own. Over the years, he took billions in publicly funded loans, subsidies and other help for his companies.

Even as they flaunt their wealth, Musk and Bezos, who paid no federal income taxes at all in 2007 or 2011 and even accepted a $4,000 child tax credit in 2011, have opposed union campaigns their workers mounted to better support their families.

“They don’t want much,” Erion Dalton, a member of United Steelworkers (USW) Local 1449 in Union, W.Va., said of the Tesla and Amazon workers. Of Musk and Bezos, she said, “You can spend a little more so they can have decent lives.”

Biden’s plan would help level the playing field and bring equity to the tax system.

Among other changes, it would require the wealthiest Americans to pay a tax rate of at least 20 percent on their “full income,” including unrealized gains on stocks and similar assets. Currently, those gains are taxed only when the investments are sold—potentially years down the road—and at rates lower than the income taxes most Americans pay.

Biden’s plan would generate about $360 billion over a decade, most of it from the nation’s 700 billionaires. Musk would pay an estimated $50 billion over that period, for example, and Bezos an estimated $35 billion, according to research by Gabriel Zucman, an associate professor of economics at the University of California, Berkeley.

Polls show that Americans overwhelmingly support forcing billionaires to do their part. Among them is Dalton, a quality inspector at Collins Aerospace who’s active in the USW Women of Steel program and regularly involves co-workers in service projects to address critical community needs.

America isn’t asking billionaires for charity, only insisting they begin honoring their obligations like millions of other taxpayers willingly do each year.

“Pay the taxes that everybody else does,” urged Dalton, noting the new revenue would help build a stronger, more vibrant America. “We rise by lifting others. We have to take care of each other.”

Kelly had America’s poor and vulnerable on her mind when Biden made a campaign stop in Davenport. She sees his tax plan as a way of fulfilling a promise he made to her that day.

“When you get up on the hill, don’t forget about the little, old people down in the valley,” she recalled telling him.

“I’m not going to do that,’” he replied.


Photos of Vera Kelly and Erion Dalton

Posted In: From the USW International President