Our one-month reprieve is over; it’s time to pay our taxes. The coronavirus pandemic may have delayed the taxman, but there’s not much relief for most of us, as we must now file our income tax returns by May 17. Some of us might even have to pay taxes on some of the COVID-19 relief benefits we received. And, of course, we will watch again as many of the wealthiest people and the largest corporations pay as little as no income taxes at all.
Like it has done with so many other aspects of our lives and economy, the coronavirus pandemic is now exposing the inequities of our tax laws and the dominance of our shareholders-based capitalist system. Last year was a record year for Wall Street investment values while it was also a record year for jobs lost in America. That’s a problem.
We get it that no one wants to pay more taxes, but it is painfully obvious that our current system is not fair to working families and most of the 99% that live below the 1% super-wealthy cut-off line. The top 1% of wealthiest people last year paid 38.5% of all collected income taxes by the IRS. But 90% paid 30%. The United States is supposed to have a progressive income tax system where those that earn the most pay the most taxes at slightly higher percentages. The United States hasn’t had a true progressive tax system since 1968 when the top income tax rate was 52.8%. It is now just 21% and the lowest rate is 12%. (It’s true that very low-income households pay no income taxes.)
When working families with multiple full-time jobs can’t afford child care or rent, that’s regressive, not progressive. When 55 of the largest corporations in America paid zero corporate income taxes last year, that’s criminal. Nike recorded a profit of $2.9 billion. FedEx had an excellent year and posted a $1.2 billon profit. Neither paid taxes, according to a report by the Institute on Taxation and Economic Policy. The tax watchdog organization said the 55 largest U.S. corporations claimed $12 billion in tax breaks last year. The same report calculated that the 2017 Trump Administration tax cuts reduced overall corporate tax liabilities by $161 billion. How much did your taxes go down?
The pandemic has created widening divides of winners and losers. Most of the jobs lost last year were middle to low-income jobs, including almost 20,000 Sonoma County jobs. Meanwhile, billionaires like Amazon’s Jeff Bezos and Facebook’s Mark Zuckerberg saw their wealth increase by $68 billion and $37 billion, respectively. Google’s Larry Page had his Google stock value climb another $21 billion. The top CEO wages are now 320 times greater than their companies’ average worker wages. What Bill Gates passively saw added to his pocket in a single day could almost fund a small city’s mom and pop businesses for a year.
Last year, Boeing cut 30,000 jobs, but their CEO earned a $21.1 million bonus. The Hilton hotel chain cut 25% of all its jobs, but awarded its CEO a $55.9 million stock option.
Guess whose lobbyists are fighting the proposed Biden Administration American Jobs Plan and Plan to Rebuild Infrastructure? Our tax rules and capitalist economy are built to favor corporate profits and stockholder dividends at the detriment and hardship to workers, small businesses, minority communities and the frail — our youngest children and oldest generations.
Sonoma County and its taxpayers, working households and both the smallest and the largest corporations all share these tax system realities. Some of the results we see are unmet local infrastructure needs, unaffordable child care services, a housing crisis, healthcare shortages and widening income inequities that impact our Latino and people of color communities at greater numbers.
Consider this our annual plea for fair and more equitable tax reforms. All we have to do is move some decimal points around a little.