Boosting taxes on America’s wealthiest people could bring in trillions of dollars to help the country solve its most pressing problems, according to Gabriela Sandoval, executive director of the non-profit Bay Area think tank Excessive Wealth Disorder Institute.
Sandoval, a former sociology professor at University of California-Santa Cruz, was hired in January at the San Francisco-based think tank founded last year and named after a concept coined by Nobel Prize-winning economist Paul Krugman. She previously worked at the Insight Center for Community Economic Development in Oakland and became steeped in issues around wealth inequality. “No one wanted to talk about decreasing wealth at the higher end,” says Sandoval.
The think tank promotes adding special surtaxes for ultra-wealthy people, imposing a “wealth tax” on assets such as real estate, yachts and luxury vehicles, and increasing IRS enforcement on the super-rich.
The institute takes aim at the richest 0.1% of Americans — people holding $50 million or more in wealth. Taxing them what the institute considers to be appropriately and effectively would generate up to $10 trillion over 10 years, Sandoval says.
Q: When you look at a $20-million house, what goes through your head?
A: Nobody needs this.
Q: Why shouldn’t people make a billion dollars if they have good ideas, work hard and make smart business decisions?
A: Most of the people that we are concerned about didn’t themselves work hard and make a billion dollars. A lot of that is intergenerational wealth. I live in California, so a lot of my neighbors are millionaires. They’re not who I’m concerned with. I’m concerned with the people who have hoarded … amounts of wealth that cannot be spent in a lifetime. They’ve taken our government hostage with their lobbyists and their attorneys. That’s where the disorder comes in, when you have people who have so much money that they’re controlling our democracy.
Q: Given the political power of the ultra-wealthy, why do you think you could succeed in making them pay more taxes — are you tilting at windmills?
A: We have an opportunity right now. An increasing majority of people in this country support raising taxes on the wealthy — all the major polls show this. We are seeing actual political will and movement in this space with legislators … introducing wealth, estate, income and capital gains tax legislation and gaining traction. Why would we not commit to working on something that could literally save us? This is a real way we could address the climate crisis, and lots of other crises, but if we don’t work on climate soon and fast, the other crises will be moot.
Q: Americans for Tax Fairness says the number of U.S. billionaires grew from 66 in 1990 to 614 in 2020 — how did we get here?
A: Lobbyists are working around the clock to make sure that the ultra-wealthy continue to get wealthier. On the other side of the spectrum you’ve got the 50% of Americans who don’t have any wealth. They can’t even weather an illness. They can’t weather a broken-down car. It’s upside down. Citizens United (the U.S. Supreme Court ruling allowing corporations to spend unlimited cash on elections) didn’t help. We’re talking about a plutocracy disguised as a democracy. When the ultra-wealthy want something, 90% of the time they get it, even if the rest of us who are voting don’t want it.
Q: How do you respond to the assertion that super-rich people are creating wealth and jobs?
A: First I ask, “What kinds of jobs are they creating?” What we’ve seen in the last 50 years in this country has been wage stagnation, it’s been jobs that don’t provide for families.
Q: What are the effects on ordinary people of this concentration of wealth?
A: Most people you would talk to would say they value accessible education … accessible high quality health care … green space, clean air, clean water. We could really move the needle on the most pressing issues of our time if we just broke up those concentrations of wealth.
Q: What does America stand to gain through higher taxation of the very rich?
A: This country was built on the idea of access to opportunity for everyone. The very soul of our nation’s ethos is at stake here. The game is rigged; the vast majority of people don’t have access to opportunity. There’s no reason our communities should be struggling right now. By taxing the wealthy … we get our democracy back and we get a clear pathway to thriving communities.
Q: What does the IRS need to do under existing tax laws to ensure ultra-wealthy people pay what the tax code says they should?
A: The IRS needs resources in order to enforce properly. We see money that’s been appropriated to fund the IRS and Republicans immediately start working to take that back. If you have a creative accountant at that level of wealth there are so many gray areas, there are loopholes, there are ways to move your money. Regular people say, “Well, we don’t want the IRS to have funds because we’re the ones getting audited.” We have to make sure that the IRS is empowered to actually go after the folks who are evading taxes. There is also a problem of equitable distribution of enforcement. Black families are audited at a much higher rate than White families.
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