{"id":10157,"date":"2021-07-16T22:41:11","date_gmt":"2021-07-17T02:41:11","guid":{"rendered":"https:\/\/marcstier.com\/blog2\/?p=10157"},"modified":"2023-07-17T22:53:47","modified_gmt":"2023-07-18T02:53:47","slug":"blockbuster-investigation-on-tax-avoidance-shows-clear-need-for-bold-federal-tax-changes","status":"publish","type":"post","link":"https:\/\/marcstier.com\/blog2\/?p=10157","title":{"rendered":"Blockbuster Investigation on Tax Avoidance Shows Clear Need for Bold Federal Tax Changes\u00a0"},"content":{"rendered":"

By Erica Freeman<\/p>\n

Last month\u2019s <\/span>ProPublica\u00a0<\/span><\/i>revelations<\/span><\/a>\u00a0<\/span>identified what many experts,\u00a0some\u00a0lawmakers, and\u00a0<\/span>a majority of Americans<\/span><\/a>\u00a0already knew about the U.S.\u00a0tax code:<\/span>\u00a0Policymakers over the past several decades have created a system that allows some of the nation\u2019s wealthiest individuals\u00a0to\u00a0<\/span>pay little or no\u00a0federal\u00a0income tax each year.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

Ongoing negotiations over the next round of recovery legislation give Congress an opportunity to reverse course by closing loopholes and rolling back tax cuts for those at the top,\u00a0thereby raising the revenue needed to strengthen the nation\u2019s infrastructure and respond to economic and racial inequalities, according to a\u00a0<\/span>new report from the Center on Budget & Policy Priorities<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n

Improving and expanding the taxation of wealth will bring more balance to the country\u2019s tax code and raise the revenue we need to invest in a recovery that helps Pennsylvania and other states build a better future and an economy that works for everyone, not just the wealthy. Pennsylvania families contribute to the investments that create opportunity and prosperity for all of us. It’s time for the wealthiest Americans and corporations to do the same. All Pennsylvania members of Congress should support policies to advance tax fairness and fund our recovery.<\/span><\/p>\n

The federal income tax accounts for roughly half of all federal revenue. And it’s essentially a voluntary tax for the richest Americans because much of their income comes in the form of gains in the value of their stocks and other assets, and they can avoid taxes on those capital gains if they hold onto their assets rather than sell them.<\/span>\u00a0<\/span><\/p>\n

The tax breaks and loopholes that make this possible have been expanded in recent years, including in the 2017 Trump\u00a0tax\u00a0cuts, helping to widen the enormous gaps in income and wealth between the nation\u2019s richest and everyone else.<\/span>\u00a0<\/span><\/p>\n

Many state and local tax codes worsen\u00a0America\u2019s economic and racial inequities by asking\u00a0low- and middle-income taxpayers to pay a larger share of their income in taxes than the wealthiest taxpayers.\u00a0In\u00a0Pennsylvania, those with\u00a0the lowest\u00a0incomes\u00a0(20%\u00a0of taxpayers)\u00a0face an average state and local tax rate that is\u00a0more than twice the rate paid by\u00a0the top 1 percent of households\u00a0in the state. The average effective state and local tax rate is\u00a013.8%\u00a0for the lowest-income 20 percent of individuals and families,\u00a011.1%\u00a0for the middle 20 percent, and\u00a06%\u00a0for the top 1 percent.<\/span>\u00a0<\/span><\/p>\n

To\u00a0ensure the wealthiest Americans pay their fair share and contribute to much-needed public investments, federal lawmakers\u00a0should\u00a0address flaws in the U.S. tax code\u00a0with the following reforms, all of\u00a0which\u00a0would affect only households with incomes above $400,000:<\/span>\u00a0<\/span><\/p>\n