Opinion | Should America’s Richest Pay a Wealth Tax?

More from our inbox:

To the Editor:

Re “Richest in U.S. Pay All but Nil in Income Tax” (front page, June 9) and “The Real Tax Scandal Is What’s Legal,” by Binyamin Appelbaum (Opinion essay, June 9):

The report from the news organization ProPublica showing that the nation’s richest executives paid just a tiny fraction of their wealth in federal income taxes is stunning confirmation that the United States’ system of taxation is rigged for a tiny number of ultrarich individuals. That such an unfair system exists in the United States today erodes trust and is ultimately a threat to democracy.

The I.R.S. data the report revealed should increase the sense of urgency surrounding conversations to impose a wealth tax so those individuals pay their fair share to the country that has enabled them to achieve so much.

Cody Lyon
Brooklyn

To the Editor:

The ProPublica report that you describe is misleading. The authors write that the tax information they somehow obtained from the I.R.S. shows that a group of wealthy people pay little income tax when compared with the increase in the values of their assets. However, of the four people for whom they gave detailed information, three paid income taxes of between 20 and 30 percent of their income — hardly an infinitesimal amount. And the fourth, Michael Bloomberg, paid less largely because of large charitable contributions and a credit for foreign income taxes (needed to avoid double taxation of the same income).

Does ProPublica really want people to pay taxes on increases in their wealth even though the appreciated assets have not been sold? There are sound administrative reasons for not taxing wealth other than income. For example, many wealthy individuals have assets (such as houses in other countries, rare artwork) that would be extremely hard to value every year. The I.R.S. would have an impossible time auditing these returns.

There are plenty of fixes that might be made to the tax laws to increase the taxes paid by the wealthy, but ProPublica’s approach is not the right one.

Peter L. Faber
New York
The writer is a retired tax lawyer and a former chair of the American Bar Association Tax Section.

To the Editor:

I have always subscribed to the eminent Judge Learned Hand’s statement on taxes: “Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.”

That sentiment notwithstanding, I confess to a feeling of revulsion after learning that I — and millions of other Americans — paid a higher tax rate than multibillionaires such as Jeff Bezos, Elon Musk, Michael Bloomberg and others. How can that possibly make sense? Congress, are you listening? It’s beyond time to take action.

Marc Chafetz
Washington

To the Editor:

The ProPublica article revealed nothing new about the tax law. The tax code generally does not tax profit on investment until the point of sale. And, as the article itself acknowledges, it may even be unconstitutional to do so. There are certainly arguments that this is a loophole — disproportionately enjoyed by the wealthy — that should be closed. But is ProPublica justified in disclosing private information that may have been improperly obtained?

While disclosure of sensitive information can surely be justified where the public interest calls for it, there was nothing new in the story that warranted this questionable invasion of privacy. The authors could have simply pointed out that, like all investors, Michael Bloomberg has not been required to pay tax on the appreciation in the investment in his company — even though he’s made billions. But using a well-known and well-critiqued loophole as a pretext to justify the publication of tantalizing information that may have been improperly obtained is wrong.

Source: Read Full Article