Fair Taxes on America’s Billionaires and Giant Corporations Would Provide $252 Billion in Revenue Per Year to Help Slash Poverty and Reduce Hunger in the US

Tax Day serves as a stark reminder of the gross inequity in our nation’s tax system that enables the ultra-wealthy to purchase yachts and private islands, while the US child poverty rate climbs and food insecurity spikes. In the United States, the average American pays a 13 percent tax rate while the nation’s top billionaires have paid rates as low as 3.4 percent.

According to new Oxfam calculations based on recently released Forbes data, America’s 735 billionaires are worth $4.7 trillion—an astonishing 62 percent increase over the past two years. Worker earnings have increased by only 10 percent over the same time, while food costs are up by more than a third (according to the USDA), contributing to an actual decrease in real earnings. Oxfam calculated that a series of tax proposals—including Senator Warren’s wealth tax on billionaires, Senator Wyden’s billionaire income tax, and a global minimum corporate tax—would yield a total of $252 billion dollars in revenue every year.

“The billionaire wealth explosion in this country comes at a time of historic inflation hitting working families, compounded by the expiration of critical social safety nets put in place at the start of the pandemic to protect America’s most vulnerable,” said Gina Cummings, Vice President of Advocacy Alliances and Policy at Oxfam America. “The impact on real people is devastating, leading countless families to slip into poverty. The ongoing failure of our nation’s leaders to implement a more equitable tax system is a stain on democracy.”

Also on Tax Day, Oxfam America joins Americans for Tax Fairness, Daily Kos and Ben Cohen and Jerry Greenfield (co-founders of Ben & Jerry's Ice Cream) in partnership with MoveOn to deliver petition signatures from more than 500,000 American taxpayers who have expressed outrage at the current US tax system and are calling on Congress and President Biden to address the growing inequality crisis by making billionaires pay their fair share of taxes.

“It’s no mystery that a half a million people have raised their voices to demand a tax system that favors working people over the ultra-wealthy. Americans are united in wanting a tax system where corporations and billionaires pay their fair share. It’s past time for Congress to enact tax policies that allow for everyone and our communities to thrive,” said MoveOn Executive Director Rahna Epting.

"Tax Day is the day that millions of Americans are reminded of the financial contributions they make to the federal government to protect public health, ensure we are safe and provide opportunities to pursue life, liberty and happiness. Working families pay their fair share of taxes to do so, but billionaires do not. That's why Congress must pass a billionaires income tax this year. Everyone, especially billionaires, must do their part according to their means," said Frank Clemente, executive director, Americans for Tax Fairness.

Oxfam estimates that Senator Warren's wealth tax would raise roughly $113 billion just from billionaires in 2022. This would provide enough revenue to invest in spending programs to support US families through the now expired extended Child Tax Credit ($97bn), investments to make child care affordable for families with children from birth through age 5 ($24bn), and reinstating expired child nutrition waivers to provide free food to children through schools, local government agencies and nonprofits ($11b). When these programs were in place in the earlier stages of the pandemic, the poverty rate in the US was slashed by as much as 50 percent.

Oxfam estimates that Senator Wyden's billionaires’ income tax would raise $56 billion a year on average, taxing capital gains annually instead of when assets are sold. Sen. Wyden’s proposal would more than cover paid sick leave ($10bn), family medical leave ($20bn) as well as affordable child care to allow more mothers and care givers to return to work by absorbing the crushing cost of care for young families ($24bn). President Biden also proposed to tax capital gains annually to ensure that billionaires pay a tax rate of at least 20 percent. That proposal would raise $36 billion a year.

“While the pandemic grinds on, it is shocking to realize, and accept, that three quarters of low-wage workers do not have access to paid sick leave,” said Cummings. “It needs to be said that a vastly disproportionate share of these workers are women and people of color, making this a civil rights issue. This is not just morally unacceptable, it’s dangerous for everyone. We can fix this with a small tax on those who have billions to spare.”

Finally, Oxfam estimates that a global minimum corporate tax would yield $63 billion a year and reduce corporations’ abuse of tax havens. While corporations are enjoying record profits, they are still paying lower tax rates than most working families. In fact, some large corporations in the US paid as little as $0 in federal taxes on profits in 2020. The Biden administration negotiated an international agreement last year to put an end to this race to the bottom by ensuring that all large multinational corporations pay a tax rate of at least 15 percent in all countries where they operate. Congress should promptly incorporate that global minimum tax into US law.

The $63 billion a year in corporate tax revenue could allow the US to invest in climate finance, including tax credits for clean energy ($11.4bn) and cutting carbon emissions with tax credits for consumers and companies ($32bn); and fund critical public health needs, including funding global COVID health needs ($5bn), covering the uninsured for COVID vaccines and testing ($1.5bn), expanding Medicare for hearing ($8.9bn), and closing the Medicaid gap ($6bn).

“We reject the narrative that this country cannot afford to invest in a better world: protect the planet, feed hungry children, ensure child care costs do not wipe out a family’s earnings, guarantee that hourly workers receive paid leave for illness or the birth of a child,” said Cummings.

Tax rates on the rich are falling at the same time as their wealth is skyrocketing. During WWII, the top federal income tax rate peaked at 94 percent and remained at 70 percent three decades later. Taxes on the rich have steadily declined since the Reagan Revolution of the 1980’s. Now, Jeff Bezos—the second wealthiest man in the world—is reported to have paid a true tax rate of less than 1 percent between 2014 and 2018.

“The American people have been told a lie. They are paying their fair share to keep this country running. It’s time for our nation’s billionaires and giant corporations to contribute their fair share of taxes to support the very people who have provided the labor that has allowed them to enjoy record profits and excess wealth,” said Cummings.

/ENDS

Notes to editors:

• The Tax Foundation publishes current tax rates: Federal Income Tax Data, 2021 Update | Tax Foundation.
• ProPublica published information from secret IRS files about how the wealthiest avoid paying income tax.
• Forbes publishes data annually on the worth of billionaires.
• Inequality.org has calculated how much richer billionaires are now than before the pandemic.
• The Bureau of Labor Statistics tracks median wages every month. In February 2020, the average was $28.52; in February 2022, it was $31.58, roughly 10% higher. Factoring in inflation, the end result is actually a decrease in the real value of wages.
• According to the USDA, for the Thrifty Food Plan, between February 2020 and February 2022, average family monthly costs went from $654 to $888—roughly a 35% increase (weekly costs went from $151 to $201).
• The NY Times documented how Covid aid programs spurred a drastic reduction in poverty.
• Senator Wyden Statement on Billionaire Income Tax Score
• ITEP report in April 2021 found At least 55 of the largest corporations in America paid no federal corporate income taxes.
• The decline in federal income tax rates is documented in the IRS historical data tables.