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A coalition of advocacy organizations is calling on Maryland’s congressional delegation to endorse a resolution to institute a federal billionaire tax, saying that there is a disparity in what the rich pay to the federal government annually versus the working class.
“Marylanders understand that our tax system is inherently unfair and they want their elected leaders to do something about it,” Kevin Slayton, campaign manager for the Maryland Fair Funding Coalition, said in a statement. “It’s time to close loopholes from the federal level on down that benefit the wealthy few at the expense of investments in our communities.”
Data provided by Forbes and analyzed by Americans for Tax Fairness demonstrated that nine of Maryland’s 11 billionaires saw an $11.6 billion increase in their wealth from March 2020 to the beginning of April 2022.
Information regarding the estates of Keith Dunleavy and Anthony Casalena from March 2020 was not available.
Maryland’s 11 billionaires — or their estates — hold almost $40 billion in assets, according to the report published by Americans for Tax Fairness, the Maryland Fair Funding Coalition and Our Maryland.
Billionaires tend to pay lower tax rates on their investment income than the working-class pays on wages. Some skate by without paying federal income taxes, at all.
According to ProPublica, this is because the majority of billionaires’ wealth comes from the rise in the value of their assets — including stock in their own companies — which is not taxable income under current law. Assets become subject to the federal income tax once they are sold. In the meantime, the wealthiest Americans often live on low-interest loans.
While the rich got richer during the pandemic, many Marylanders found themselves facing layoffs, business closures and skyrocketing prices for goods, leading them to rely on federal aid, according to the report.
Federal relief for health services, like Medicaid coverage under the Families First Coronavirus Response Act, will expire once the public health emergency is rescinded, which could happen this year.
U.S. Sen. Chris Van Hollen (D-Md.) said he is “working to change” the country’s inequitable tax system.
“Right now, some pay nothing & many others pay a lower tax rate than nurses, teachers, & firefighters,” Van Hollen tweeted Monday afternoon. “Why? Because our tax code rewards wealth, not work. Working to change that!”
A White House news release issued Monday said that President Joe Biden is calling on Congress to pass measures to require the richest households to pay at least 20% in taxes based on their income, including currently nontaxable investments.
He also has proposed that lawmakers repeal a Trump administration policy that gave over $1 trillion in tax giveaways to large corporations and the wealthiest households.
Biden and Sen. Ron Wyden (D-Ore.) have proposed billionaire tax plans. Though they vary, both have provisions to tax tradable assets, like stocks.
According to a national poll released earlier this month by Americans for Tax Fairness, 64% of respondents were in favor of Wyden’s plan, which is estimated to bring in $557 billion across 10-years.
Biden’s plan, which would generate $361 billion over a decade, was not mentioned in the poll.
Budget data from the National Association of State Budget Officers and historical data regarding federal grants tacked onto state budgets suggest that if either tax plan is enacted, Maryland could stand to gain between $740 million and $1.1 billion annually.
Federal grants — which pay for public services like Medicaid, nutrition and education programs, public safety and infrastructure projects — accounted for about 35% of the state’s budget between 2019 and 2021.
According to Americans for Tax Fairness, a billionaire tax could add an additional 2.3% of funds to the state budget, which equates to a year’s worth of state revenue from fuel taxes.
“These billionaires benefit from the fruits of their workers and utilize the state’s infrastructure, like roads, bridges and schools, paid for by the taxes of working families,” Sen. Paul G. Pinsky (D-Prince George’s) said in a statement. “They have more than an obligation to pay back a sizable amount from their grotesque wealth. It should be the law.”