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second thought nobody likes paying taxes
i think that's something we can all
agree upon regardless of political
beliefs
but as unpleasant as it may be taxes are
the price we pay for living in a
functioning society
at least at this point in history our
taxes pay for roads
schools fire departments and public
transportation
of course american taxes are
exceptionally low compared to other
countries
and our public resources suffer because
of it our infrastructure is outdated and
fragile
our public transportation nearly
non-existent not to mention the fact
that we are the only industrialized
nation without some form of universal
health care
believe it or not people who pay more in
taxes in our peer nations end up
saving money because things like health
care which is incredibly expensive in
the us
are free in their countries but this
episode isn't about taxation in general
it's about one specific report that
reveals just how little the country's
richest people pay in taxes
spoiler alert it's way less than you pay
recently the
independent nonprofit news outlet
propublica released a stunning report
titled the secret irs files
in which they reveal the means by which
the ultra wealthy pay next to nothing in
taxes
as well as their effective tax rates
based on how much they pay compared to
the growth of their wealth
for example jeff bezos the richest
person on earth
paid a true tax rate of 0.98
between 2014 and 2018. despite his
wealth growing by nearly a hundred
billion dollars in that
period the average american pays a rate
of 14.6 percent
so the richest man on the planet who is
currently worth over 190 billion dollars
enjoys a tax rate that is 15 times lower
than the average american
who earns in their entire lifetime less
than what bezos accumulates in just 15
minutes
now there are plenty of weird finance
bros who will jump to defend the
billionaires by saying things like
look they're not doing anything illegal
unrealized gains on things like stocks
aren't taxed until you sell
despite missing the point a little bit
these people are mostly correct
billionaires like bezos musk and buffett
while generally getting up to some shady
tax practices
are at least mostly operating within the
confines of the law
they simply take advantage of the way
the system is set up to exploit their
vast riches
live an obscenely lavish lifestyle and
pay essentially nothing in taxes
i'll let propublica take the stage for a
minute here's their
short video explaining exactly how these
oligarchs exploit the system
some of the very richest americans a
little in taxes compared with how fast
their fortunes grow
each year how they use a tax strategy
known as
buy borrow die it's like the ultra
wealthy are living on
another planet
average people need income to pay for
basics like housing and food
but the ultra wealthy don't they can
just live on borrowed cash
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step one buy the ultra wealthy buy an
asset or
build a company or inherit a fortune as
long as they don't sell
they own no taxes they keep their income
as low as possible since every dollar
they earn can be taxed
step 2 borrow they borrow against their
holdings and the bank gives them
a really good deal i'll loan you 10
million dollars with only 3
interest but if you take a 10 million
salary from your company
you'll owe almost 37 percent to the irs
so the ultra wealthy use loan money to
fund their lifestyles
that's how a billionaire can live the
most luxurious life imaginable while
reporting
little to no taxable income step 3
die when they die these lucky few often
use
complicated trusts and philanthropic
foundations to avoid the estate tax
and their heirs can inherit stocks and
other assets
tax-free a new generation is ultra
wealthy and the cycle starts all over
again
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when it's laid out simply like that
without all the intentionally dense tax
language and obfuscation
it becomes clear how absurd the whole
thing is
the fact that warren buffett can pay a
tax rate of one tenth of one percent
is insane this is a trend that has been
worsening for years
since the 1950s and accelerating since
the 1980s
tax rates among the wealthy and
corporations have fallen precipitously
largely because of the misguided
american belief in trickle-down
economics
and the increasing power of the wealthy
as government officials have become more
and more dependent on corporate
donations
what we're seeing now and what the
propublica report has revealed
is the result of these regressive tax
policies thanks to his obscene wealth on
paper
and the ability to avoid taxation by
simply accumulating and not selling
jeff bezos has access to functionally
limitless amounts of money
through generous loans it's how he was
able to buy a custom
500 million dollar super yacht which is
so big
it comes with a smaller support yacht
complete with its own helipad
when the weird online billionaire
defenders say things like they're not
actually that rich it's mostly on paper
ask them how he can afford a half a
billion dollar yacht
or five full floors of luxury new york
city apartments which he plans to
combine into a single
17 000 square foot mega condo or the
rest of his 500 million dollar real
estate portfolio
if someone can buy all these things yes
they're that rich
they're just not using their own money
to do it they're using the loans they
can get because of their tremendous
portfolio of assets
many of the ultra wealthy have adopted a
new habit of claiming they support
higher taxes on the rich
this is a great bit of pr because it
costs them nothing to say it
and all the while they're lobbying
behind the scenes to make sure their
taxes stay as low as possible
that's the main problem with the system
as it exists today
it's not that the u.s desperately needs
tax revenue from the rich
though it would help it's the fact that
these oligarchs can effectively steer
the government
themselves without ever having to be
elected or be seen supporting one team
or the other
and that's the secret there's really
only one team
they may wear different colors but
democrats and republicans
share the goal of maintaining the status
quo which leads to further enrichment of
the already rich and powerful
the continued worsening of inequality
and the lining of their own pockets
thanks to eye-watering corporate
donations
there's a quote by julius niere the
first president of tanzania
that sums up american politics pretty
well he said
the united states is also a one-party
state but with typical american
extravagance
they have two of them what we have today
is a corporate duopoly
two parties that claim to have vastly
different politics but that have proven
time and again that all they really care
about is corporate interests
for example biden ran on being different
from his predecessor
but deportations have increased we still
have kids in cages
police budgets have increased the
military budget has increased and the
corporate tax rates will remain the same
materially there is next to no
difference between republicans and
democrats
because they both receive funding from
the same giant corporate interests
the democrats would have you believe
that they represent progressive policies
but when the propublica report came out
can you guess what their reaction was
it wasn't to launch an investigation
into the state of taxation and corporate
power
it was to launch an investigation into
how propublica got a hold of their
information
then of course you have the republicans
being authoritarian as usual
with mitch mcconnell saying whoever did
this ought to be hunted down and thrown
in jail
think about it the people who represent
us are concerned not with the fact that
the richest people on earth can pay
nothing in taxes
but that those incredibly powerful
people had their taxes leaked
government officials don't care about
normal people
they are bought and paid for by the very
richest people
and massive multinational corporations
the ultra wealthy enjoy
access to a completely different system
than the rest of us
most normal people receive an hourly
wage or a salary
we are paid for our labor and a cut of
that money goes to the irs in the form
of taxes
if you've ever wondered why people like
elon musk receive a fairly small salary
it's not because they're being
self-aware or giving more to their
workers
it's because they'd rather be
compensated in ways that aren't taxable
like we saw in the propublica explainer
instead of receiving a 10 million dollar
salary and paying 37
tax on it the rich can just accumulate
stock and borrow against it at a tiny
interest rate
thus exempting them from the taxes the
little people have to pay
the deification of oligarchs is fairly
new in america
these days you have people working 70
hours a week making 30
000 a year who will rabidly defend
billionaires
because for some bizarre reason they
think they'll be rich one day too
this hyper hyper-individualist
bootstraps mentality has completely
destroyed class consciousness in america
in the past the very rich were looked
upon with suspicion and often hatred
and rightly so then as now the
ultra-rich accumulated their wealth
through the exploitation of others
during the civil war the rich had to
disclose their income and tax payments
for example in 1865 the annual income of
moguls like william astor and cornelius
vanderbilt was published in the new york
times
why because the public deserved to know
what these people were making
especially because it was the american
workers doing the labor that enriched
those who owned the means of production
unsurprisingly these oligarchs used
their massive wealth to force a repeal
of the wartime tax law shortly after the
war ended fast forward to today
and billionaires are nearly untouchable
we can't tax them
we can't criticize them because they're
quote job producers
we're indoctrinated to hold them in high
regard simply because of their massive
wealth
so what can we do how can we make the
radical changes necessary to fix the
absurd money problems this country faces
one thing is certain electoralism isn't
enough
people will say call your
representatives vote for progressive
politicians
make your voice heard except those in
power don't listen to what the people
want
we have mountains of data that shows the
only opinions that matter are those of
corporate donors
the only thing in this country that is
truly bipartisan is the desire to
maintain the parasitic economic status
quo in order to further line the pockets
of the wealthy and powerful
historically the only thing that has
kept these people in check
has been fear now for any alphabet
agencies monitoring my videos
i am not advocating for violence i'm
simply stating a historical fact that
the only times we've seen real
radical change have been in societies
where normal people get so fed up with
the status quo that they took matters
into their own hands
up until recently i would have said any
kind of mass popular uprising was highly
unlikely in the us
but given what we've seen in the past
year and a half the strikes
protests riots and so on it's become
apparent that public sentiment seems to
be shifting slightly away from electoral
politics
and towards a populist anger at those
who control the levers of power
the critical missing piece the bit
that's been absent in the u.s for the
last hundred years
is class consciousness we're still very
much in a sort of cultural
identity politics tug of war between
republican and democratic voter bases
but i think people are finally beginning
to rediscover the strong american
tradition of class solidarity and mass
organization
the propublica report is just the latest
bit of fuel for the fire
slowly but surely average americans are
beginning to wake up to the fact that
they've been given a raw deal
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thanks for watching and i'll see you
next week
you