Two numbers show what is going wrong in the US. In the US Census’s weekly household survey at the end of July, 30 million people said they did not have enough to eat. Shortly before, the left-wing liberal think tank Americans For Tax Fairness had calculated that America's billionaires had increased their wealth by 42 billion dollars a week since the pandemic began in mid-March. The more than 600 wealthiest people in the US are now another 700 billion dollars richer.
The Corona crisis acts like a turbo for inequality, so the proposal by former presidential candidate Bernie Sanders seems to be the right solution. The Senator has tabled a bill, called the Make Billionaires Pay Act , which provides a 60 percent wealth tax on profits made by the super-rich during the coronavirus pandemic.
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The tax proceeds are to be used for a year to pay medical bills for people who cannot afford any or only inadequate health insurance. For a long time it was said that Americans could not enjoy such a Robin Hood mentality. But even hedge fund managers like Ray Dalio, also a multi-billionaire, and JamieDimon, head of the major bank JP Morgan, are now worried about social stability in the country. In Germany, too, the pandemic has reignited the discussion about reintroducing the wealth tax.
Jeff Bezos doesn't have his fortune in the savings account
To take from the rich and give to the poor, that makes sense to many. But the solution is not as simple as Sanders and other advocates of redistribution by the tax authorities would like to believe. Super-achievers like Amazon boss Jeff Bezos, whose fortune grew by more than $ 60 billion during the pandemic, don't have their money in their savings account. It's in stocks, holdings, real estate, art and all kinds of complex financial instruments. It takes experts and experts to evaluate this.
The figures quoted by the media and on which Sanders also relies are based on estimates. The business magazine Forbes has hired dozens of journalists to target the billionaires who are busy with nothing other than collecting information about their wealth. But the figures are not suitable as a basis for levying a compulsory levy.
Not only would it be laborious to carry out the assessments; those affected would also be quick to find ways to avoid taxation. As is well known, whole nations live from it. Panama Papers, Paradise Papers - the list of tax evaders discovered is long, and the list of undiscovered tax evaders is even longer. Of the twelve OECD countries that levied wealth tax in 1996, only four were left in 2018. The tax revenue from this is in the single-digit percentage range.
There is a better solution than wealth taxes
There are therefore considerable doubts as to whether a compulsory levy, such as that proposed by Sanders, would actually raise enough funds for health care. In addition, there are constitutional concerns, in 1997 they tipped the balance in Germany to abolish the wealth tax. Therefore, attempts to levy taxes on the wealth or income of the wealthy have usually endeavored to broaden the definition of "wealthy". The majority of the tax pay then not the super rich, but the middle class.
Taxes on the wealthy try to make an unjust distribution of profits more equitable in retrospect. It would be better to start beforehand, where the profits are skimmed off: in the company. Wages and salaries would have to rise, and distributions to owners would have to fall.
Between 2008 and 2017, more than 90 percent of the corporate profits of the largest US companies flowed into the pockets of shareholders through share buybacks and dividends. But organizing political majorities for this would be much more difficult than introducing a bold Make Billionaires Pay Act .