(KPIX 5) Amid an eye-opening ProPublica report on how some of the wealthiest Americans legally pay little in income taxes, a Bay Area lawmaker is pushing his wealth tax measure.
The report, released Tuesday from the investigative journalism organization, provided a glimpse into the world of the nation’s mega-millionaires. ProPublica obtained IRS records for the 25 wealthiest Americans and the information is eye-opening.READ MORE: Newsom Signs Executive Order On Workplace Pandemic, Mask Rules Following Cal/OSHA Vote
While most citizens pay about 35% of their earnings in taxes, between 2014 and 2018 billionaire investor Warren Buffett saw his wealth grow $24 billion but paid a total of $23.7 million, an effective tax rate of 1/10 of one percent.
Amazon CEO Jeff Bezos, the world’s richest man, amassed a fortune of $127 billion from 2006 to 2018, but paid just $1.4 billion in taxes, only about 1.1 percent.
Reaction to that in downtown Walnut Creek was predictable.
“If I do business at one of their companies, I’m creating more money for them, and they’re not being taxed on it? That’s not fair,” said Barbara Shapiro.
“I think it stinks,” said Barbara Loeb. “You know, they have billions and they don’t pay taxes and I don’t know how they do it.”
The ultrawealthy can do it because most of their money isn’t traditional “income.” People such as Tesla’s Elon Musk earn billions on the appreciation of stocks and other holdings which aren’t taxed until they’re sold. So, they rarely sell them, instead they live lavish lifestyles by borrowing against their assets.READ MORE: East Palo Alto To Receive About $7M In Federal COVID-19 Recovery Funding
Assemblymember Alex Lee (D-San Jose) has introduced a bill, AB 310, that would place an annual 1% tax on the wealth of people with at least $50 million in holdings.
“So this is only tackling on the assets, the fortunes, the wealth of people who are mega-millionaires and millionaires,” Lee told KPIX 5. “And it would potentially generate, yearly, $22.3 billion for the state.”
Back in Walnut Creek, Paul Earl acknowledged the income inequity. “But then again, I’m not creating jobs like they are too,” Earl said. “They do create a lot of jobs, they create wealth, also. So, it’s a tough one.”
AB 310 would amend the State Constitution so it would require a vote of the people. A similar bill died in committee last year, but Lee says if that happens again they may try qualifying it as a public-generated initiative.
Jim Wunderman, President and CEO of the Bay Area Council, was skeptical of the measure and said any effort to tax wealth needs to be done on a national level, and not by California alone.
“That would be completely out of sorts with any other state,” he said. “No one does that. I’m certain it would cause an exodus of wealthy people from California who already pay a lot of tax here.”MORE NEWS: San Jose Mom Samantha Rodriguez Waives Extradition In Son's Murder Case; Returning To Las Vegas
The ProPublica exposé describes how much the system favors the super rich over everyday citizens. Or, as Warren Buffett famously said in 2011, “There’s been class warfare going on for the last 20 years, and my class has won.”