We Can Make the Super Rich Pay Their Fair Share | Opinion

The pandemic brought its fair share of challenges for Americans, including straining household budgets. From spiking unemployment at the start of the pandemic to rising costs this the past year, Memphians tell me every day about the increasing difficulties of stretching their dollars and taking care of their families.

Yet even as our challenges have grown, the ultra-wealthy have maintained their jet-setting lifestyles. In fact, billionaires have expanded their fortunes tremendously since the pandemic began. Here in Tennessee, the state's 10 billionaires grew $21 billion, or 85 percent, richer over the first two years of the pandemic.

But while billionaires increased their wealth, we were the ones footing the tax bill. Thanks to a skewed tax code that showers tax breaks on those with the greatest means, the average billionaire pays a lower tax rate than middle-class workers.

The ultra-wealthy meticulously evade taxes by living off the growing value of their assets, which are only taxed if sold, instead of wages or paychecks, which are taxed annually. The ultra-wealthy can avoid paying a dime in taxes by simply holding on to their assets. If they need cash, they take out special low-interest loans on their assets without triggering a tax bill. This income works just like any other kind of income—allowing them to purchase houses, super yachts, and spaceships—but it isn't considered taxable income. By holding on to their assets, borrowing against their gains, and using an estate planning loophole to pass their gains on to heirs tax-free, the ultra-wealthy can avoid taxes forever.

Taxing the Utra-Rich
A mobile billboard calling for higher taxes on the ultra-wealthy depicts an image of billionaire businessman Elon Musk, near the U.S. Capitol on May 17, 2021. Drew Angerer/Getty Images

The system is so skewed that billionaires like Jeff Bezos, Elon Musk and Michael Bloomberg paid nothing at all in federal income taxes in some years.

To keep this two-tiered system in place, America's billionaire class exploit their fortunes to influence elections and support candidates who will cut taxes on massive corporations and ultra-rich individuals. According to a recent report, billionaires have already pumped tens of millions of dollars into the 2022 midterms.

Earlier this year, President Biden proposed a commonsense solution to close the loopholes in our system by requiring ultrawealthy individuals to pay a minimum tax that treats the rising value of their assets the same way income from work is taxed for the rest of us.

Polls show that the vast majority of Americans, including majorities of Democrats, Republicans and independents, support the president's billionaire minimum income tax proposal. At a time when there are few things Americans can agree upon, overwhelming majorities agree that the ultra-rich need to pay their fair share.

If the ultra-wealthy lived by our rules and paid the taxes they owed, they would still be extremely wealthy, but the rest of us would be better off, too. The revenue raised could be used for any number of critical investments, including lowering the cost of health care and education; covering dental, vision, and hearing services for seniors in Medicare for the first time; and improving public safety.

It's past time for ultra-millionaires and billionaires to play by the same rules as everyone else. That's why Congressman Don Beyer and I introduced the Billionaire Minimum Income Tax Act with 32 House co-sponsors, including Democrats from every region and every segment of the political spectrum.

The Billionaire Minimum Income Tax will ensure that the extremely few households with a net worth over $100 million pay at least a base level of taxes each year instead of paying lower tax rates than ordinary Americans or evading taxes altogether.

It comes down to this: a small business owner or teacher in Tennessee shouldn't be paying more in taxes than a billionaire in New York City or Silicon Valley in a country founded on freedom, opportunity, and equality.

No matter how much money we have or what we do for a living, we all have a responsibility to pay what we owe and to contribute to building shared prosperity in our country. Ensuring the wealthy pay their fair share like the rest of us is an important step toward making this a reality.

Congressman Steve Cohen (TN-09) is serving his eighth term in Congress and is Chairman of the Judiciary Subcommittee on the Constitution, Civil Rights and Civil Liberties.

The views expressed in this article are the writer's own.