In this time of budget crises we are hearing increasing calls to tax the rich. Working people paying the cost of our wars with both their lives and their taxes are outraged that corporations like General Electric, with huge profits, pay nothing toward the many government services which allow them to make so much money.
When a real estate investor buys land for $1,000 an acre and sells it five years later for $30,000 an acre, he has not created that wealth. That wealth was created by the community: the workers, business people, and governments that developed the city surrounding the investor’s land. The community creates the services, and the demand, that increases the value of this land.
The investor may have done nothing but sign a promissory note to pay for that land, yet we have accepted a system where all of the increased value goes to the person who signed the note. We then tax that income, at the most, at approximately one third. We leave two thirds of this huge increase in private hands while the rest of us work and scrape to pay for the services that will multiply his next investment.
It doesn’t have to be this way. President Kennedy used to quote Luke 12:48, “From those to whom much is given, much is required,” and he lived that simple concept of justice. Just 50 years ago, under President Kennedy, we recognized this principle and taxed the wealthy at a 70 percent tax rate. From those to whom much is given, much is required. Today, we tax the wealthy at approximately 35 percent, or one-half of the previous rate, and wonder why we face budget shortfalls at every level of government.
Donald Trump’s salary is reportedly $42,000,000 per year, primarily from real estate investments. Yet we—the community—create the conditions that increase the value of his investments every year. Increasing his tax contribution from 35 percent ($13,000,000) to 70 percent ($26,000,000) per year would not only make a significant contribution to our budget problems, it would be fair. We resist implementing this simple and obvious solution to our budget crises only because we have been trained to believe that $42,000,000 he makes each year is entirely his money. It is not.
No one becomes wealthy without a lot of help from a lot of people, and Trump is no exception. It is time to demand that Trump and other wealthy individuals and large corporations pay their fair share of the costs it takes to fund our country and our states. Tax justice is a simple step we can take to address the financial crises we are facing and stop the ever-increasing concentration of power and money in our country.
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