A coalition of 37 businesses in the Fells Point neighborhood of Baltimore, Maryland have signed on to a letter in which they threaten to stop paying municipal taxes and fees until the city meets its demands for better security, trash collection, and law-enforcement.
“Frankly, it’s pathetic that we have to ask for these basics,” the letter read. “But this is where we are.”
So, to compel our leaders to do their job and to stand up for neighborhoods all across Baltimore, the undersigned parties are prepared to withhold our city taxes and minor privilege and permit fees and place those funds into an escrow account, which we will not release until and unless basic and essential municipal services are restored.
Someone leaked the tax returns of America’s richest people to the independent investigative journalism collective ProPublica.
The upshot, as you might have suspected, is that fabulously rich people pay paltry income tax rates on their growing wealth.
This seems to be largely because much of their wealth does not come in the form of taxable income but in the form of capital gains, which do not get taxed until they are “realized” — which they often never are (instead the wealthy borrow against them, pass them to heirs, or create foundations with them).
Sometimes much of the wealth is donated to charity and so is not taxed for that reason.
This has rekindled outrage about the unfairness of the U.S. tax system.
Some excerpts from a news report based on the tax return leaks:
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
Our analysis of tax data for the 25 richest Americans quantifies just how unfair the system has become.
By the end of 2018, the 25 were worth $1.1 trillion.
For comparison, it would take 14.3 million ordinary American wage earners put together to equal that same amount of wealth.
The personal federal tax bill for the top 25 in 2018: $1.9 billion.
The bill for the wage earners: $143 billion.
Apologists for the rich like Tyler Cowen and the National Review would prefer that we focus on the violation of privacy implications of these tax returns being released to the press.
(Meanwhile, in the real world, us plebs have to cough up our tax transcripts to strangers every time we apply for a loan or try to rent an apartment.)
But the likely effect of this will be to further erode “taxpayer morale” and the willingness of ordinary taxpayers to keep forking over their hard-earned money.
ProPublica plans to release a series of additional reports based on the tax return data it received.