With the wealth gap at its widest in decades, the idea of taxing the rich is all the rage on the campaign trail and on Capitol Hill. But there's lots of ways to do it, not just by hiking rates.
Over the last 30 years, the tax rates paid by high-income people have actually come down, and now 10 percent of Americans earn nearly half of all the country’s income — prompting proposals from several 2020 presidential candidates. Sen. Elizabeth Warren’s plan for a wealth tax is the major policy proposal of her 2020 campaign. “Millionaires and billionaires” are still a centerpiece of Sen. Bernie Sanders' stump speeches. And Alexandria Ocasio-Cortez, the Democratic Socialist freshman representative from New York, advocates for raising the top marginal tax rate to 70% (it’s currently 37%).
“More of [the top earners'] income comes from investments and so-called capital income. And through lobbying or through changes of policy, they have gotten the [tax] rates for high-income people and for capital income cut over time,” said Austan Goolsbee, the former chair of President Obama’s Council of Economic Advisers and an economics professor at the University of Chicago’s Booth School of Business. “The rich could definitely afford to pay a lot more as a share of their income than they pay now.”
But taxing the wealthy isn’t as simple as raising the rates. So VICE News asked Goolsbee to walk us through ways to narrow the gap.
Design by Ana Simões. Motion design by Kazyuki Ishii and Kris Cave.
This segment originally aired April 11, 2019, on VICE News Tonight on HBO.