Source: United States Senator for Massachusetts – Elizabeth Warren
Recent report detailed how the ultra-rich pay income taxes that fall well below the typical rates paid by middle class wage earners
Washington, D.C. – United States Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.), members of the Senate Committee on Finance, sent a letter to Finance Committee Chair Ron Wyden (D-Ore.) calling for an investigation into last month’s deeply troubling ProPublica report describing how the nation’s wealthiest individuals are using a series of legal tax loopholes to avoid paying their fair share of income taxes.
ProPublica obtained a trove of tax data for the nation’s wealthiest individuals and estimated that some paid just an effective tax rate of 3.5% on their growing fortunes, well below the typical rates paid by middle class wage earners. The ProPublica investigation also found that the vast majority of the tax avoidance is legal.
“This tax avoidance by the nation’s wealthiest individuals is profoundly unfair,” wrote the senators. “The Finance Committee has an obligation to investigate these matters, hold hearings, and develop legislative policies that address the methods and strategies used by ultra-millionaires and billionaires to avoid paying taxes, and its impact on the nation’s finances and ability to pay for investments in infrastructure, health care, the economy, and the environment.”
Senators Warren and Whitehouse are also requesting that the Finance Committee investigate the role of the nation’s largest financial institutions and wealth management firms that have helped develop these tax avoidance strategies and provide the financial infrastructure that allows them to be effective.
“Because the majority of tax avoidance loans and other tax avoidance tactics are not disclosed to the IRS, an effective investigation of these tactics must involve the institutions that aid and abet them. The Committee should open an investigation of the role of these financial institutions in tax avoidance, seeking information on how certain lending activities allow individuals to avoid claiming taxable income and the precise methods used by these institutions to do so,” Senators Warren and Whitehouse wrote.
Earlier this year, Senator Warren introduced the Ultra-Millionaire Tax Act. Senator Whitehouse is an original cosponsor. The bill includes robust anti-evasion and avoidance measures and would level the playing field and narrow the racial wealth gap by asking the wealthiest 100,000 households in America, or the top 0.05%, to pay their fair share. Revenue generated from the Wealth Tax could be invested in child care and early education, K-12, and infrastructure.