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.” Just 50 years ago, under President Kennedy, we recognized this principle and taxed the wealthy at a 70 percent rate for income in the highest tax bracket. Today, however, the rate for income in this highest tax bracket is only about 35 percent, or one-half of the rate during the Kennedy years, and wonder why we face budget shortfalls at every level of government.
Donald Trump’s income is reportedly $42,000,000 per year, primarily from real estate investments and TV appearances. Yet we—the community—create the conditions that increase the value of his investments every year. Increasing his tax contribution on the portion of his income in the highest tax bracket 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 crisis only because we have been trained to believe that the $42,000,000 Trump 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 money 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.
David Leeper is a Madison, WI attorney actively supporting the protests against Governor Walker’s attack on public employees and collective bargaining. Leeper has served as a District Attorney in Wisconsin and has taught human rights, peace and conflict, negotiations, and rule of law courses in Ukraine, Spain, Zimbabwe, and the United States.
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This story was published in the Baltimore Chronicle on April 14, 2011.