Taxes: for the Common Good
Warren Buffett, the “Oracle of Omaha” and one of America’s most successful investors (current net worth about $141 billion), has complained for years that his secretary pays a higher overall tax rate than he does. He considers this unfair.
It is, and the results are punishing for most Americans. The top one-tenth of one percent of Americans (households with a net worth over $45 million) own about as much wealth as the bottom 90 percent of all families combined. The richest 1% control $55.8 trillion of assets, more than the GDPs of the United States and China combined. So much of our nation’s wealth in the pockets of so few is why most Americans live paycheck-to-paycheck and struggle to afford necessities like housing, food, healthcare, and childcare.
How did the huge gap between the rich and the rest come to be? One major reason has been tax cuts mostly benefitting the rich under Republican administrations from Reagan’s in the 1980s through Trump’s in 2017 and 2025. The Trump cuts were the largest transfers of wealth from the rest to the rich in our history, and for the first time, the rich paid a lower effective tax rate than the working class.
A Times study found that the tax rate of the 400 richest Americans dropped from 56% in 1960 to 53% in 1970, to 33% in 1985, and to 23% in 2018. While most people live off taxable salaries, the rich live off their often untaxed wealth. Seven years ago, when he was still CEO of Amazon, Jeff Bezos’s taxable salary was $81,840, but he owned about 10% of the company, whose 2023 profit was $30 billion. Amazon and most large companies don’t give their profits to shareholders as dividends, which are taxable, but reinvest them, making shareholders even richer. If they need money, they borrow against their assets.
Once upon a time, the rich lived off taxable corporate profits, but those maximum rates have dropped, too, from 52% in 1960 to 34% in 1990 (Reagan tax cuts) to 21% in 2020 (Trump cuts). Most estate taxes have been eliminated, as well.
One way to reduce the wealth gap is the Ultra-Millionaire Tax proposed by Senator Elizabeth Warren. Her bill would have the wealthiest .15% of households pay 2% on wealth over $50 million, close tax loopholes, and rebuild the IRS weakened by Trump so it has the resources to enforce the Ultra-Millionaire Tax and conduct stronger audits of high-income households. Warren’s bill also includes an exit tax requiring those with more than $50 million in wealth and who renounce U.S. citizenship to pay 40% on wealth above $50 million, give the IRS tools to accurately assess hard-to-value property like private businesses and artworks, and penalize banks and third parties for underreporting or hiding wealth.
Other ways to shift wealth to ordinary workers include raising the federal minimum wage, supporting labor unions, using antitrust laws to break up dominant corporations that raise consumer prices, raising taxes on corporations who pay top executives hundreds of times more than their workers, banning stock buybacks, and eliminating most tariffs, which are, in effect, taxes on consumers. Also, states can prevent corporations from making political contributions, most of which support Republican campaigns that support favoring wealth, not work.
We can change the tax system to favor work, not wealth, so government will be able to provide what every other rich country provides: universal healthcare, childcare, paid parental leave, free or low-cost public higher education, and more. And the rich can still be rich. We can do it by voting for candidates devoted to the common good, not to the private good of their rich donors. Government work is for public service, not private profit. Vote!
