Congressional ire over tax avoidance is hypocritical
Congress recently expressed outrage over tax data published by Fortune Magazine and ProPublica that shows the very wealthy in America pay a much lower tax rate than average Americans. Fortune reported that 55 major S&P 500 and Fortune 500 companies paid zero federal income taxes on their 2020 profits. 26 of them paid no federal income tax for the last three years, despite having combined earnings of $77 Billion and combined pre-tax profits of $40.5 Billion. These companies include Nike, Salesforce, FED EX and Archer Daniels Midland.
Data shows the 25 richest Americans avail themselves of tax-avoidance strategies beyond the reach of most Americans. The group includes Bill Gates, Rupert Murdoch, Warren Buffet, Jeff Bezos, Mark Zuckerberg, Carl Icahn and George Soros. Their wealth derives from the value of assets like stock and property. Those gains are not defined by U.S. laws as taxable income until they are sold. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid $13.6 billion in income taxes in those years. A staggering sum, but an effective tax rate of only 3.4%. Many Americans live paycheck to paycheck, amassing little wealth. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes.
Our Congress writes and passes our tax codes. These codes allow off-shore tax havens and other accounting gimmicks that allow the rich to minimize or eliminate taxes. Congress needs to wake up and look in the mirror if they want to blame someone. Congress’ arrogance is exceeded only by their ignorance, hypocrisy and greed. They would do well to learn the old maxim, “You get what you reward and deserve what you tolerate.”