Amidst numerous scandals involving tax evasion by prominent figures and businesspeople, the American group Patriotic Millionaires has recently garnered media attention with their call to action: "I'm rich, tax me" and "Tax the world's wealthiest people harder."
Eliminate injustice
According to NPR, in late 2022, residents of Whiteville, a small city in Columbus County, North Carolina, were invited to attend weekly Patriotic Millionaires meetings. For over a month, dozens of residents participated in an intensive course on inequality and understood why this wealthy group wanted higher taxes and an increase in the minimum wage.
Founded in 2010, Patriotic Millionaires presents itself as a non-partisan organization, bringing together over 200 members who are millionaires, investors, and business owners in various fields, including Abigail Disney, one of the heirs to the Disney Corporation. They identify themselves as people who are "ashamed" of being too rich, with annual incomes exceeding $1 million or assets worth more than $5 million. They condemn the US tax system for increasing inequality, arguing that the average American pays more in taxes than the wealthiest. In 2021, the US investigative site Pro Publica revealed that the 25 wealthiest Americans did not file any tax returns, and the majority of their spending was covered by businesses or loans.
At a hearing of the US Senate Finance Committee on November 9, 2023, US senators sought to target the Buy, Borrow, Die strategy used by millionaires and billionaires to avoid taxes on their assets. "Buy" involves purchasing and investing in stocks, real estate, etc., to increase the value of their assets. "Borrow" involves borrowing from banks at relatively low interest rates to cover their living expenses, deducting the interest from their income. Upon their death, their vast fortune is transferred to their family, thus avoiding taxes.
Just a small group?
RFI quoted economist Eric Pichet, a lecturer at KEDGE Business School (France), as saying that the US tax system is quite complex and confusing, even for Americans themselves. According to Pichet, there are seven income tax brackets in the US, reaching up to 39.6%, lower than in France (45%), but still quite high. In the US, as elsewhere, the more money you earn, the more taxes you have to pay.
There are increasingly more millionaires demanding to pay more taxes in the US, Canada, and Europe, such as Millionaires for Humanity in the UK, Resource Movement in Canada, or Tax Me Now in Germany. However, according to Mr. Pichet, these wealthy individuals wanting to pay more taxes are, in reality, only seeking media attention and only involve a small group of individuals, not representing the majority of millionaires. “These people want to highlight their sense of inferiority for being too rich, but it’s important to distinguish between millionaires and billionaires. I believe the target of these millionaires’ calls for taxation is billionaires, those who are wealthier than them. If you surveyed, I’d be sure that 90% of millionaires have no intention of paying more taxes,” Mr. Pichet said.
In fact, in early 2023, US President Joe Biden proposed a minimum 20% tax on families with assets exceeding $100 million, based on income and unrealized capital gains. The White House explained that this law would target the assets of very wealthy families, those that have gone untaxed for decades or generations, especially targeting "super" billionaires like Elon Musk or Jeff Bezos. However, according to CNBC, this proposal was quickly stalled and is unlikely to be passed.
Globally , not only the US but many other countries currently do not tax net assets. Only five countries in the Organization for Economic Cooperation and Development (OECD) still maintain taxes on assets. According to expert Pichet, establishing a law to tax assets requires many countries to adopt it, in a way that sets a global minimum tax rate of 15% for businesses. Pichet believes that it will not be possible for wealthy countries to have a net asset tax law for another 5-10 years.
Nevertheless, the idea of heavily taxing the wealthy is gaining support from many economists and politicians, who believe it could address income inequality and other social issues. However, according to Pichet, if a wealth tax were implemented, the economy would change because wealthy entrepreneurs and business owners would move to another "tax haven."
MINH CHAU
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