It’s Time to Tax the Rich

With the deadline for paying federal income taxes fast approaching, the thoughts of American taxpayers turn naturally toward the age-old question: Why isn’t there a fairer tax system?

Currently, in fact, campaigns for state tax-the-rich legislation are flourishing in California, Colorado, New York, Oregon, Rhode Island, Texas, and Virginia, and have already succeeded in getting such legislation adopted in Massachusetts and Washington. Similarly, in Congress, Senator Elizabeth Warren and Representative Pramila Jayapal have introduced the Ultra-Millionaire Tax Act, while Senator Bernie Sanders and Representative Ro Khanna are sponsoring the Make Billionaires Pay Their Fair Share Act. The tax-the-rich proposals range from increasing the tax rate for the very highest annual income earners, to instituting an annual wealth tax on the very richest Americans, to a combination of both.

Although the most affluent Americans, like other Americans, have always paid taxes to fund public services, the dispute has been over how much they should pay. Sales taxes and property taxes place a heavy burden on people of modest means, but a much lighter burden on the wealthy. Therefore, the wealthy have tended to favor these generators of public revenue and to oppose a progressive income tax, under which the rich would pay at a higher rate than the poor. A lengthy political battle for a tax system based upon ability to pay led to passage of the 16^th Amendment to the U.S. Constitution, which empowered Congress to levy an income tax.

Initially, the new income tax, though progressive, was rather small-scale. But as the federal government took on new and costly tasks―particularly funding U.S. participation in two world wars and the Cold War―the federal income tax grew accordingly. By 1944, the official tax rate for the highest income earners stood at 94 percent―although, thanks to deductions, loopholes and the rate’s confinement to the top increment of their income, the richest Americans actually paid at a much lower rate.

Like their well-heeled predecessors, many wealthy Americans were outraged at funding public services that benefited people whom they often regarded as their inferiors. Why, they wondered, was their money being “wasted” on things like public schools, public housing, and public healthcare, when “the best people” went to private schools, lived in private mansions or gated communities, and employed private “concierge doctors”? While chatting with their friends over lunch on their yachts or at their tennis clubs, they complained of “welfare queens” and the “ungrateful poor.”

Consequently, Congress―badgered by the wealthy, their corporations, and conservative ideologues―cut the progressivity of the federal income tax. In 1964, the top marginal tax rate was reduced from 91 percent to 70 percent, in 1981 to 50 percent, and in 2018 to 37 percent.

Given these dramatic cuts in the federal income tax rate, plus preferential tax treatment for dividends and appreciation in the value of stock, bonds, and other investments―the wealthiest Americans managed to secure a much lower tax rate than most Americans. According to a ProPublica investigation, the 25 richest Americans, who had $401 billion in income from 2014 to 2018, paid taxes on it at a rate of just 3.4 percent. Indeed, during some years, the world’s top billionaires―including Elon Musk, Jeff Bezos, Michael Bloomberg, and Carl Icahn―paid no federal income taxes at all.

When it came to corporate income, the federal government slashed the corporate tax rate from 53 percent to 21 percent between 1969 and 2025. And this, too, produced enormous benefits for very affluent Americans, who own most stock market wealth. According to the Institute on Taxation and Economic Policy, 23 of the largest and most profitable U.S. companies paid no federal corporate income taxes at all from 2018 to 2022. And 109 corporations paid no federal tax in at least one of those years.

The Trump administration’s tax policies lifted the fortunes of the wealthy to unprecedented heights. According to a September 2025 report by Americans for Tax Fairness, the wealth of the 15 richest U.S. billionaires increased by over 300 percent after the passage of the first Trump-GOP tax cut in December 2017. The wealth of the very richest of them, Elon Musk, grew 20-fold. In the first year of Trump’s second term, marked by another huge tax cut for the rich, U.S. billionaire wealth jumped from $6.7 trillion to $8.2 trillion.

Not surprisingly, government taxation policy―coming on top of low wage rates, corporate outsourcing, assaults on unions, and government subsidies for big business―has resulted in rising economic inequality in the United States. By late 2025, the richest 1 percent of Americans possessed some $55 trillion in assets―roughly equal to the wealth held by the bottom 90 percent. “Household wealth is highly concentrated and becoming steadily more concentrated,” reported the chief economist at Moody’s Analytics, a major financial research firm.

This rising economic inequality enhances the growing power of the wealthy in public affairs. Increasingly, in politics, big money talks―and on behalf of Republicans. Federal election contributions from the nation’s 100 richest Americans averaged $21 million between 2000 and 2010, but rose beyond $1 billion in 2024. In that year, contributions to Republicans surged from roughly $300 million to just under $1 billion, while donations to Democrats dropped from roughly $300 million to less than $200 million. A rightwing political party, led by a demagogic billionaire promising more tax cuts, proved irresistible.

By contrast, most Americans support proposals to raise taxes on the rich. According to a March 2025 Pew Research Center poll, large majorities of Americans surveyed favored increasing taxes on the wealthy and corporations. In January 2026, an Economist/YouGov poll reported that 80 percent of American respondents viewed wealth inequality as a problem, 80 percent said the rich had too much political power, and 78 percent said taxes on billionaires were too low.

It’s time to tax the rich. Or, as Pete Seeger used to sing: “Take it easy, but take it.”

The post It’s Time to Tax the Rich appeared first on CounterPunch.org.