Elizabeth Warren
09/13/2024 | Press release | Distributed by Public on 09/13/2024 14:14
ICYMI: At Hearing, Warren Calls for Taxing Billionaires in 2025 to Fund Investments in High-Quality Child Care
September 13, 2024
ICYMI: At Hearing, Warren Calls for Taxing Billionaires in 2025 to Fund Investments in High-Quality Child Care
The Biden-Harris 25% billionaire minimum tax would raise over $500 billion and fund historic investments that lower costs for families, including lowering child care costs to less than $10 per day.
Washington, D.C. - At a hearing of the Senate Finance Committee, U.S. Senator Elizabeth Warren (D-Mass.) made the case for investing in high-quality childcare and education for American families, funded by the Biden-Harris billionaires minimum tax, which would ensure the wealthiest 10,000 Americans pay a minimum 25% of their income in taxes.
Mr. Bob Lord, Senior Advisor on Tax Policy at Patriotic Millionaires, shared that the wealthiest Americans are making plenty of money but can do so in a way that is not considered income for federal income tax purposes, while still living lavishly with access to cash and favorable lending rates.
Mr. Indivar Dutta-Gupta, a Doris Duke Distinguished Visiting Fellow at the McCourt School of Public Policy at Georgetown University and Roosevelt Institute Tax Fellow, testified that a 25% minimum tax on the wealthiest Americans could help fund Democratic proposals like Senator Warren's Child Care for Every Community Act to invest in child care and early education, lowering the cost of child care to just $10 a day for most families. Mr. Dutta-Gupta also said that by investing in high-quality care and education, the federal government could recoup up to 12 times its investment in long-term benefits.
Transcript: Hearing on the 2025 Tax Policy Debate and Tax Avoidance Strategies
Senate Committee on Finance
September 12, 2024
Senator Elizabeth Warren: Thank you, Mr. Chairman. Our tax code is built on a very simple premise, and that is if you make it big - I mean, really, really big, then you can afford to chip in a little more to keep our country going, to help pay for roads and bridges and child care and housing and the things we need.
Today, that premise has been turned upside-down. The wealthiest of the wealthy have figured out how to get richer and richer and richer and richer in ways that just don't show up on a tax form. The result? The top 0.1% pays just 3.2% of their wealth in taxes every year, while the bottom 99% pays more than double that. That's just not fair.
Next year, Congress has a chance to unrig the tax code. Democrats have proposals to stitch up loopholes so that we can ensure the wealthy pay their fair share. But, no surprise, the megamillionaires and billionaires are whining that they cannot possibly afford to pay taxes.
Mr. Lord, you practiced tax law for nearly forty years, you've advised wealthy clients on how to cut their tax bills. The richest Americans are now paying little to nothing in federal taxes, so tell us - are they not making money?
Mr. Bob Lord, Senior Advisor on Tax Policy, Patriotic Millionaires: Senator, they are making plenty of money, but the way they are making it is by holding assets that grow and grow and grow in value - buildings, stock portfolios and such and while that wealth is growing, the growth, which is economic income, is not even considered income for federal income tax purposes.
Senator Warren: Right. But it's still good collateral for borrowing money.
Mr. Lord: It is. And actually, they're able to borrow typically at very favorable rates because they have relationships through their business operations with lenders.
Senator Warren: Okay, so let's go to that. Elon Musk, for example, raked in nearly $14 billion from 2014 to 2018, but he paid just 3% of that in taxes. That's why the Biden-Harris administration has a proposal to ensure that people with a net worth more than $100 million - we're talking the wealthiest 10,000 people in the country - that they would pay a minimum of 25% of all their income in taxes. We all recognize that is well below the current top tax rate of 37%, but the megamillionaires say it's still too high. They don't have the money because their wealth is all locked up in stock.
Mr. Lord, are these 10,000 megamillionaires actually cash poor? Are they living like monks?
Mr. Lord: No, they're not. I haven't seen many monks on yachts. They are not. As Chair Wyden pointed out, this is buy, borrow, die. When they need cash, they can get it. And, as I said before, typically at very favorable rates.
Senator Warren: So here are American families who are struggling to pay high mortgage rates and still pay their taxes, year after year. Billionaires are still buying private jets - Mr. Musk, for example, owns four. So let us be clear: if you make it big, really big, $100 million or more big, I think you can afford to pay a minimum 25% tax on your income.
And just one other part about the choices we're making here. Mr. Dutta-Gupta, you are an expert on economic policy and inequality. The Biden-Harris billionaire income tax would raise about $500 billion over 10 years. If we invested that money in things American families need, like affordable child care or housing, what impact would that have?
Mr. Indivar Dutta-Gupta, Doris Duke Distinguished Visiting Fellow at the McCourt School of Public Policy at Georgetown University and Roosevelt Institute Tax Fellow: Well, it would be transformative. These proposals, that you have also helped champion, Senator Warren, could lower the cost of child care to just $10 a day for most families, helping parents work, helping kids get the early education they need. Research suggests that for every dollar we invest in high quality care and education, we could recoup up to $12.
Senator Warren: Wow. What an investment. President Biden and Vice President Harris are fighting for families. Meanwhile, Donald Trump wants to take us even further in the wrong direction. He shoveled out $2 trillion in tax giveaways to the wealthy in 2017, and now he's out there promising that he will reward his, "rich as hell donors" with more tax cuts next year if he gets the chance. And he and his running mate don't have a clue about how to help families with the cost of child care.
Next year, we can afford to ignore the billionaire tears. We can raise taxes on the wealthy, and we can invest that money in lowering costs for everyday families.
###