An Explainer of Income and Wealth in the Time of COVID-19

During the pandemic, there have been many news headlines about the widening wealth gap in the United States. While true, wealth and income gaps existed long before COVID-19, particularly along lines of race. That is no accident. Rather, these gaps are the product of our country’s ongoing history of racist, biased, and discriminatory policies and practices against Black, Indigenous, and people of color (BIPOC). The pandemic has simultaneously made us acutely aware of that fact while also exacerbating the problem.

For starters, let’s distinguish wealth from income and income from wealth. The two terms are commonly used interchangeably but have different meanings. Income is what we get from our employer, our business, rents on properties, and so on. Say, for example, you work at a grocery store that pays you for your work. That is income. On the other hand, wealth represents savings, so it is accumulated over time, and tends to be higher than income. Wealth includes money in the bank, property and land owned, jewelry and art, and the like.

Both wealth and income are essential to long-term financial security. Without income, it is hard to meet basic everyday needs, such as groceries, diapers, school supplies, and clothes. In other words, income helps measure day-to-day economic resources. Wealth gives people a cushion if they lose their job or fall on hard times and allows for big investments in things that can grow wealth, such as higher education and property. Wealth can also generate income through accrued interest on bank deposits and dividends on stocks, for example.

It is possible to have wealth and little or no income. Take owning a home and living on a modest pension as one example. As a different example, take a billionaire, like Jeff Bezos. According to a July 2021 report from the Center on Budget and Policy Priorities, as of 2020, Bezos received an annual salary of $81,840, a modest income for the world’s richest person. Bezos also has wealth in the form of Amazon stock, which grew by more than $100 billion between 2010 and 2018. So, while Bezos has a relatively low income (for the world’s richest person), he has tremendous wealth.

The pandemic is deepening wealth inequality. According to reporting from August 23, 2021, in the first 17 months of the pandemic, billionaires in the United States saw their wealth increase by $1.8 trillion, an amount roughly 144 times the size of Montana’s $12.5 billion 2023 biennial budget. That has happened as the economic downturn of the pandemic has hit ordinary people. Of those billionaires, Elon Musk alone saw his wealth grow by $150 billion, and Jeff Bezos watched his wealth increase by $75 billion. It is not just the wealth of individual billionaires that is increasing, but so is the number of billionaires (from 614 to 708). For perspective, if those 708 billionaires were to sit in the University of Montana’s football stadium (capacity of 25,217), the stadium would be about 97 percent empty. We are talking about a very privileged few here. As a reminder, wealth can generate income, so even if wealthy people (millionaires and billionaires) have relatively little income, they still have resources to finance lavish lifestyles.

This concentration of wealth largely benefits white people. According to an April 2021 report from the Center on Budget and Policy Priorities, the wealthiest 10 percent of white U.S. households hold nearly two-thirds of the country’s wealth. According to September 2020 research of pre-COVID wealth from the Board of Governors of the Federal Reserve System, the average white family had eight times the wealth of the average Black family and five times the wealth of the average Hispanic family before the pandemic. These numbers represent more than a point in time – they represent the historical injustices perpetrated by racist, biased, and discriminatory policies and practices against BIPOC people. Wealth, or a lack thereof, can persist across generations. The accumulation of wealth represents access to homeownership opportunities, the passing down of resources from generation to generation, the ability to save, and a tax code that favors wealth over income, among other things. Remember, wealth can generate income, which also means that it can deepen income inequality.

White people have been more insulated from the financial impacts of COVID. Americans with higher incomes, who are more likely to be white because of ongoing historical racist policies and practices, have had more flexibility to work from home, protecting them from the virus and the economic downturn. In fact, households with annual incomes of $200,000 or more were nearly six times as likely as households with annual incomes of less than $25,000 to have switched to telework in 2020.

BIPOC people are overrepresented in jobs the pandemic hit the hardest. A July 2021 analysis by the Economic Policy Institute shows that while the overall unemployment rate fell, white people fare better. As of the analysis, Hispanic workers were still nearly 70 percent more likely than white workers to face unemployment, and Black workers were twice as likely as white workers to face unemployment.

Wealth inequality helped white people who lost job-related income. For example, according to a July 2021 report from the Center for American Progress, nearly 46 percent of white households that saw job-related income loss used savings to cover expenses, compared to roughly 31 percent of Black households. This means that when households needed to rely on savings, fewer Black families could do so, despite the disproportionate impact of the pandemic on Black people.

While undeniably linked, income and wealth are distinct. Our country’s ongoing history of racist, biased, and discriminatory policies and practices deny BIPOC people equitable access to either, creating an uneven recovery from the pandemic. Lawmakers in Congress and the Montana Legislature can do something about this. Some solutions include providing financial support for BIPOC entrepreneurs to start and grow their businesses, investing in early child care and education, providing financial support for higher education, and strengthening taxation of wealth and high incomes to sustain transformative investments in BIPOC communities.

The Data is in: Families are Spending their Child Tax Credits on Basic Needs

We’ve written before about how the expanded Child Tax Credit (CTC) is a historical step in lifting children out of poverty. But new data released from the U.S. Census Bureau can help us better understand how families use the expanded tax credit to meet their basic needs.

First, a quick recap about what the expanded CTC is: 

The CTC has long been part of our tax code. This past summer, Congress increased and expanded it to help families recover from the pandemic and address the cost of raising children. Congress increased the benefit amount, included 17-year-olds, and allowed families living on the lowest incomes to receive the full benefit for the first time. Families receive $250 a month per child aged 6-17 and $300 a month for children under 6.

Over 209,000 children qualify for the credit in Montana. The expansion is projected to reduce childhood poverty in the state by 45 percent a year if made permanent. For more information on how the expanded CTC works, be sure to read our blog post here.          

New Data Shows Families in Montana are using CTC to meet basic needs.

Since the summer of 2020. the U.S. Census Bureau has been conducting the Pulse Survey to measure the effects of the pandemic on households. Recently, the survey has asked households with children how they have spent their credits.

Data from July through September shows us that families in Montana used their first two CTC payments to meet basic needs, including food, clothing, rent, and utilities.

Here are some important takeaways from the data:

  • Nearly half (44%) of all families are using their credit on food for their household.
  • 3 out of 5 families spent their credits on basic needs and/or educational expenses regardless of their income.

For families living on less than $35,000 a year, the credit is even more essential. Here’s how families living on low incomes used their credit:

  • Food  65% of families spent their credit on food.
  • Utilities – 40% of families used their credit on utility bills.
  • Educational expenses – 34% of families used their credit on educational needs, including after-school care.Clothing – 32% of families used their credit on clothing.
  • Rent or mortgage – 29% of families paid rent or their mortgage with their tax credit. 
  • Basic needs and educational expenses – 4 out of 5 low-income families used their credit on basic needs and/or educational expenses. 

The tax credit also helps families afford to work.

In Montana, ten percent of families, and 17 percent of families with children under the age of 5, used the credit to pay child care expenses. The coronavirus pandemic has forced many parents, especially mothers, out of the workforce, due to health concerns, school closures, and a lack of affordable child care. For families who need child care to work, the credit helps make work accessible.

Congress should make the expanded CTC permanent.

This new data from the Census Bureau demonstrates how much families need this additional support. When families can afford rent, food, and other necessities, children ultimately do better. Congress should make the expanded CTC permanent and continue this historic victory against childhood poverty.

The Housing Voucher Program Should Be Included in Federal Relief Legislation

This week, Montana Budget & Policy Center released a report on the federal Housing Choice Voucher (HCV) program. This program provides rental assistance for 5,628 Montana households living on poverty-level incomes, making an average yearly income of $12,360. These households include tenants living with disabilities, families raising children, and senior citizens who depend on these vouchers so they can afford to keep a roof over their heads. By making housing costs affordable, vouchers can prevent folks from having to pick between paying the rent, putting food on the table, or buying medicine. Rental assistance is proven to lift people out of poverty and improve long-term outcomes for children who get to grow up in stable and safe homes.

However, the HCV program has fallen short of achieving its intended goals. Housing vouchers are not an entitlement benefit. The number of households that qualify for rental assistance far exceeds the number of vouchers available. There are many steps our federal government can take to improve the efficiency of this program. Congress is currently negotiating legislation we hope will make long-term, sustainable investments Americans need to build healthy, secure, and successful lives. This plan should include providing more affordable housing and expanding the housing choice voucher program.

Please read our latest report to learn more about how vital the housing choice voucher program is to so many of our neighbors.

MBPC’s Comment to Centers for Medicare and Medicaid Services

On October 14, the Montana Budget & Policy Center submitted comment to the federal Centers for Medicare and Medicaid Services (CMS) urging them to deny Montana’s request to end 12-month continuous eligibility for adult Medicaid enrollees. Roughly 17,000 Montanans risk losing coverage with the end of continuous eligibility, according to a recent analysis. This effort by the state will hurt individuals’ access to coverage, including critical preventative care, and impact Montana’s economic recovery. 

You can find MBPC’s full comment here.

MBPC Opinion Editorial: It is time to make billionaires pay their fair share

Billings Gazette and Helena Independent Record

A fair economic recovery is possible and affordable. It’s time for billionaires and corporations to chip in.

In Washington, Congress is debating how to help families get back on their feet after a challenging 18 months. However, with so many Montanans still struggling, we cannot afford to return to the way things were. We need to move forward to something better.

While businesses are grappling with the fallout of the global health pandemic and economic downturn, many families know that this crisis has merely laid bare the barriers they have long faced. Rising housing costs and the pressure of balancing caring for family — both young and old — have made it nearly impossible to earn enough to make ends meet. Investments in child care, affordable housing, and home- and community-based services will help people return to work and build a future for their families. They will also foster the workforce that businesses need to get back up and running.

Congress has the opportunity right now to fund these and many other critical investments by ensuring the wealthiest Americans pay their fair share in taxes. Currently, our federal tax system is riddled with loopholes that benefit the wealthiest households and corporations at the expense of investments in the rest of us. Lopsided tax cuts enacted in 2017 made the tax code even more unfair, showering the wealthiest with additional, excessive perks. In 2020, the richest 20 percent of Americans received nearly three-fourths of the tax cuts, costing our country $205 billion. Congress’s plan would make sure the richest 1 percent are paying their fair share.

Making matters worse, the top 1 percent of earners avoid $163 billion in taxes every year. A recent investigation exposed how the country’s wealthiest individuals pay far less than they’re supposed to in federal income taxes. Simply improving tax collections of taxes already due and avoided, mainly by the wealthiest, would add $1.6 trillion in revenue over the next decade.

It is long past time to make a change. Congress should do what’s necessary to ensure billionaires can’t use loopholes and other tactics to avoid paying income taxes on their fortunes.

Congress’s plan would make sure people like Jeff Bezos are paying their fair share. The proposed individual income tax changes would require the richest 1 percent to pay for 97 percent of the tax increase, which will start to address inequities in America’s tax system. And when paired with increases in the child tax credit and the earned income tax credit, these improvements will help families with the lowest incomes – who are often left out of tax reform.

What’s more, a recent study by the Institute on Taxation and Economic Policy found that at least 55 of the nation’s largest companies paid no federal corporate income taxes in 2020. The current plan being discussed by Congress calls for increasing the corporate income tax rate for companies with over $5 million in annual profits and lowering the rate for small corporations with income below $400,000. The proposal also helps level the playing field so small businesses can compete by limiting the amount of taxes avoided by multinational corporations that shift income overseas.

Corporations and the wealthiest have been getting a special deal for too long. Congress should reduce our tax code’s inequities. Most importantly, it should make the investments needed to ensure everyone is included in our economic recovery. Congress has a historic opportunity to close offshore tax haven loopholes, make billionaires pay their fair share, and go after tax cheats. And with new investments in child care, education, and housing, we can make sure all Montanans can thrive.+1 

Rose Bender is Deputy Director of Research and a Senior Fiscal Policy Analyst with the Montana Budget & Policy Center – a nonprofit organization focused on research and advancement of public policies that help families living on low incomes.

Back to school means better access to meals for many Montana children

As kids across Montana stuff their backpacks with notebooks, pencils, and crayons, there is one thing they won’t have to worry about packing – their school lunch. This year, like last year, children nationwide have been able to receive free school meals.

The pandemic meant extraordinary administrative challenges, frequently changing financial circumstances, and unforeseen stressors, For schools and families alike. Free school meals have provided consistency for millions of children and families, who did not have to navigate a complicated application process in a time of uncertain employment.

Most importantly, they provided students with nutrition and a chance to learn and grow in a time of unprecedented challenges. And while the pandemic surges on, free school meals address a childhood hunger crisis that existed even before the coronavirus made us painfully aware of the schools’ role in keeping students fed.

When schools closed in the spring of 2020, American policymakers realized how many students relied on school meals. Many students living on low incomes were eligible to receive free or reduced-price school meals. Unfortunately, these programs often left out students whose income was a little too high, and families who weren’t aware of the program or didn’t understand the application.

No child in Montana – a state that helps feed the nation – should know what hunger feels like. But too many do. This summer, 29,000 households in the state reported that the children in the household had not received enough food to eat the past week. As children head back to school, free school meals can help address this crisis.

The extension of free school meals is set to expire at the end of the 2021-2022 school year. However, Congress has the opportunity to decrease food insecurity in children for years to come.

The first proposal is expanding the Summer Electronic Benefit Transfer (Summer EBT). In the summer of 2020, Congress provided food assistance for families who received Supplemental Nutrition Assistance Program (SNAP) and/or free and reduced-priced school meals, because those students were unable to receive school meals when the schools closed. The program was extended through the summer of 2020 as many families struggled to utilize summer meal service sites due to the pandemic. In the summer of 2021, the program was again renewed, helping to address the challenge of summer hunger that existed even prior to the pandemic.

Congress should make summer EBT a permanent feature, providing 29 million children with assistance when school meals are not an option. Montana does provide free summer meals at certain sites through the Summer Food Service Program (SFSP), and this year served a record number of summer meals. But while Summer Nutrition Programs, including the SFSP, are an important resource for families, they only reach one out of every five kids who qualify. Summer EBT can help fill the gaps in nutrition many children experience during the summer.

The second change is increasing the Community Eligibility Provision. Community eligibility allows schools to provide free meals to all students in high poverty areas, regardless of their income. This flexibility helps catch families who would normally be eligible, but do not know about it or think they might be ineligible and never apply.

Community eligibility also helps reduce the stigma of free and reduced-price lunches, allowing all children to meet their needs without fear of judgment. The proposed federal budget would increase the share of federal fund for the program, allowing more schools to pursue this option.

The pandemic has taught us that we cannot undervalue the roles that schools play in our towns and cities. Not only are they centers of learning, but sources of safety, community, and nutrition for thousands of Montana children. Congress should act now to help expand schools’ ability to make sure that no child goes hungry during school or the summer. A strong federal budget matters when it comes to keeping Montana’s children hunger free. 

What would help families make ends meet? Make the Child Tax Credit permanent

Congress has an opportunity to help Montanans not only recover from the effects of the coronavirus, but to create a nation that includes everyone in its growing economy. Now is the time to address the challenges faced by Montanans, especially Montanans living on low-incomes and Montanans of color. We have the opportunity now to rebuild a stronger country, if Congress makes permanent its changes to the Child Tax Credit.

The Child Tax Credit (CTC) can drastically and permanently reduce childhood poverty and hunger. It can also begin to address racial injustices in our tax code if the changes made earlier this year become permanent.

This summer, families received much-needed support through a one-time expansion of the CTC. The effects have been immediately noticeable – food insecurity has dropped, and families are better able to afford childcare.

Over 9 out of 10 children in Montana will benefit from the expansion. A permanent expansion of the CTC could reduce childhood poverty by 45 percent, meaning 10,000 fewer children in Montana would live in poverty. For families of color, who have long felt the burden of a discriminatory tax code, the changes could reduce child poverty even more. Up to 55 percent fewer children of color will live in poverty if Congress permanently expands the CTC.

New, temporary changes to the CTC benefit families.

Before the American Rescue Plan Act (ARPA), the CTC was $2,000 for children 16 years and under. For the first time, the CTC includes 17-year-olds. Under the ARP, the CTC amount for children under 6 is $3,600, and for children aged 6 to 17, $3,000. Starting July 15, families began receiving monthly payments and will continue to receive them through the end of 2021. For each child under 6, this means a monthly check of $300 and $250 for those aged 6 to 17.

These credits can help significantly reduce the cost of raising children. For parents with a four-year-old, $300 a month can help cover roughly 40 percent of average monthly childcare costs, or it could equal up to a month’s worth of food for a child. Parents could also pay for other needs and opportunities, like new shoes or music lessons.

But while the dollar increase in the CTC has made the most headlines, it is not the only significant change.

Prior to this summer, the CTC was not completely available to families living on the lowest incomes. In the past, families did not receive the full tax credit if the amount they owed in taxes was less than the total credit. This meant higher-income families received a larger credit than families living on the lowest incomes.

For this year only, however, the tax credit is “fully refundable,” meaning families can receive the full amount, even if the amount they owe in taxes is less than the total credit received. This is a vital change for those families who need it the most and will be able to benefit from the full credit for the first time.

The refundability of the CTC reduces historical racial injustices.

American Indian families have suffered the consequences of discriminatory policies for generations. For example, the forcible transfer of land from American Indians to non-Indians in the late 19th and early 20th centuries destroyed opportunities to build generational wealth, creating lasting impacts today. American Indians have, and continue to be, discriminated against in education, housing, and employment opportunities, pushing many families into poverty. Due to inequitable policies, American Indians living in Montana experience poverty are 2.5 times more likely to live in poverty than white Montanans are.

Our tax code has doubled down on these injustices, as families living on the lowest incomes have not been eligible to receive the full CTC. This discrimination against those living on low incomes has served to perpetuate a cycle of poverty. But because the CTC is refundable for the first time, families living on low incomes can receive the full credit this year.

Refundability of the CTC is essential for families of color. Nationwide, the CTC expansion would lift 124,000 American Indians and Alaska Natives above the poverty line and 156,000 closer to the poverty line. In Montana, poverty for children of color would be reduced by 55 percent each year if these changes in the CTC were made permanent.

The CTC provided immediate impact and helped rural communities.

Food insufficiency in households with children dropped the week after families received the checks. Nearly half of respondents in a Census survey reported spending the credit on food. The CTC also helped families afford childcare – 17 percent of respondents with children under the age of 5 spent the credit on child care. With Montana facing a critical childcare shortage, the changes to the CTC can help more families afford quality care for their children.

As families spend their tax credit on their most urgent needs, they simultaneously stimulate their local economies, generating jobs and state and local tax revenue. The CTC provides a substantial benefit in rural states, like Montana, with smaller incomes and larger family sizes. The total expanded CTC, which brings in over $824 million to the state, could create 2,156 median wage jobs.

Refundability of the CTC should be permanent.

The changes to the CTC, including the increased benefit, expanded ages, and refundability, benefit over 90 percent of Montana children. But while the CTC has long been a source of support for families, the fact that families living on the lowest incomes could not receive the full credit especially children of color.

Allowing the CTC to return its previous state of non-refundability would discriminate against families of color who were driven into poverty by racially motivated discriminatory policies, like the forcible transfer of land and the underfunding of tribal colleges. Congress should act to make the refundability of the CTC a permanent feature to take steps in correcting this historical injustice.

Broadband: Expanding the Digital Road in Indian Country

For decades, quality access to the internet has been important for businesses, schools, and communities. However, the global pandemic has made apparent the stark difference in access -particularly in Indian Country. Broadband is a digital road, and like most roads, they take us to places like work, school, the doctor, and stores. They also bring important goods and services into a community. The past year has dramatically increased our reliance on these digital roads. However, for Indian Country, barriers exist, and much of Indian Country has lacked the funding for broadband infrastructure. These challenging times brought a push and opportunity for funding which will be critical for Indian Country to build for the future.

First, it is essential to understand what broadband means. The term broadband refers to high-speed internet access that is always on and faster than traditional dial-up access. A recent national survey by showed the net result of Montana on average having the slowest internet of all states, with roughly half the speed of the national average. Broadband access depends on many factors, including whether you live in a rural or urban community. Rural areas, especially tribal lands, lack broadband coverage the most.

Tribal lands often present significant obstacles to implement broadband and are expensive to serve. These challenges on tribal lands include rugged terrain, complex permitting processes, jurisdictional issues involving states and sovereign tribal governments, lack of the necessary infrastructure, and a majority of residential rather than business customers. Higher population density and more business customers incentivize broadband providers to invest in urban communities where they will receive more returns versus spending hundreds of thousands of dollars to serve a few customers in a rural area. With 84% of tribal citizens living in rural and small-town areas of Montana, these populations are more directly impacted by inadequate speeds and access to broadband coverage.

Fortunately, there is some hopeful news.

The federal American Rescue Plan Act (ARPA) brought significant funding to Montana. The legislature set up interim committees to appropriate more than $2 billion in federal funding through HB 632 and designating $275 million of that funding for broadband-related projects. The funding from HB 632 will work through SB 297, creating a grant program to award broadband providers with funding to deploy broadband projects in frontier, unserved, or underserved areas. Tribal and local governments may partner with broadband providers to fund these projects.

Previously, in February 2020, the Federal Communications Commission opened a six-month period in which federally recognized tribal nations or Alaska Native Villages could apply for a broadband license to provide broadband service on tribal land. In Montana, seven out of eight tribal governments received a license. Previously tribal nations had to compete against giant internet service providers with vastly larger capital and staff with technical skills in bidding for the license.  Tribal governments can lease these licenses. However, having their own license and managing their own infrastructure will mean adding high-skilled, high-paying jobs in their communities. Tribal nation’s autonomy over spectrum licensing strengthens tribal sovereignty by increasing the authority of tribal nations to manage their internet just as they would a natural resource, like water or mineral rights. While tribal governments expect to receive these licenses and some federal funding, it is still only a fraction of what is needed to cover all the costs. That is why state funding from SB 297 is a critical component to make this plan a reality.  

Broadband is an essential part of infrastructure interconnecting all other industries. Every industry relies on computing, cloud storage, or other digital equipment to sell goods and services. In a pandemic that is disproportionately impacting Indian Country, accessing the internet has become increasingly vital for maintaining and improving essential things like physical and mental health outcomes, employment rates, school enrollments, and social connections. The necessity for broadband is overwhelmingly clear as we continue onto this road into the future —a road towards investment, equity, and development in Indian Country.

Check out the MT broadband deployment task proposal here.

MBPC’s Comment on the 1115 Waiver Amendment

Last week, Montana Budget & Policy Center submitted our comments in relation to the proposed amendment to Montana’s 1115 demonstration waiver for the Health & Economic Livelihood Partnership (HELP) program, as well as, the proposed 1115 demonstration waiver for Montana’s basic Medicaid program (which DPHHS has referred to as the Waiver for Additional Services and Populations, or WASP).

As one of several organizations working to expand Medicaid in Montana, MBPC supported the Health and Economic Livelihood Partnership (HELP) Act, passed by the Montana Legislature during the 64th Legislative Session. As of July 1, 2021, over 100,000 low-income Montanans were enrolled in affordable health care coverage. This effort has moved Montana closer toward closing the coverage gap, has reduced uncompensated care, and has injected billions in taxpayer dollars into our local economies. MBPC urges the Department to consider the impact that more frequent determinations will have on Montanans. Twelve-month continuous eligibility has proved to be a success in Montana..

To read our submitted comments, download the PDF here.

Wealthiest Should Finally Pay their Fair Share

A recent investigation found that many of the wealthiest Americans pay little to no income tax each year while tens of millions of middle-class people have it withheld from every paycheck they receive. Those who use their income to buy groceries, school supplies, and pay for housing pay a much higher tax rate than those who have endlessly expansive resources.

Our current federal tax system is unfair, and we are encouraged by recent efforts to make sure those at the top and large corporations are paying their fair share, to invest in critical needs that will help families struggling, like housing, education, and child care.

Much of the income of the wealthy comes from gains in the value of stocks and other assets, and if assets are held onto, taxes are avoided. When the wealthy are required to pay taxes on the income from these assets, such as capital gains and dividends, they pay at tax rates that are far lower than the tax rates they would pay on wages and salaries.

The tax breaks and loopholes that make this tax avoidance possible have been expanded in recent years, including in the 2017 federal tax reform, increasing the already rampant disparities in incomes across race and class.

Montana’s state and local tax codes worsen the economic and racial inequities by asking taxpayers with lower and middle incomes to pay a larger share of their income in taxes than the wealthiest taxpayers.

We as a nation have a serious need to rebuild infrastructure and address glaring economic and racial inequities that have been named and grown during the COVID-19 pandemic. Luckily, fixing the flaws in the tax code that allow the wealthiest to avoid taxes would provide much-needed revenue to address our infrastructural needs and invest in our communities.

Federal lawmakers should make the following reforms to make sure the wealthy contribute to much-needed public investments. These reforms would only affect households with incomes in excess of $400,000.

  • Tax capital gains that have escaped taxation at the end of an individual’s lifetime.
  • Eliminate lower tax rates on capital gains and dividends for those with incomes over $1 million, taxing that income at the same tax rate as salaries and interest, and eliminating the deduction for pass-through income created in 2017. A new tax on the incomes of millionaires should also be strongly considered.
  • Bolster other taxes, such as the corporate income tax and the estate tax, which fall most heavily on the wealthiest households. Increase the corporate tax rate to 28 percent and make changes to the tax code to address the longstanding and rampant use of tax havens.

These proposals, together, represent a modest step in the direction of greater tax fairness.