How a Plutocracy Works –– an Example
Most dividends on stocks, which are overwhelmingly held by the super rich, the rich, and the well-off, are taxed at an especially low rate, a sign of the pro-plutocratic tilt in our tax system. Moreover, Amazon and many other huge companies pay no dividends, so the value of shares go up because all earnings are plowed back into the company. Amazon founder Jeff Bezos is worth in the neighborhood of 200 billion dollars. Only a trifle of what he has accumulated has been taxed because it’s treated as “unrealized capital gains.” If Bezos were to die, the law provides that the cost basis of his stock will be stepped up to market value, which means that his capital gains will be ignored. As Robert Reich has pointed out, this “‘stepped-up basis’ tax loophole allows heirs of billionaires to avoid capital gains taxes on inherited assets.Closing this loophole is an absolute no-brainer. But Dems on the House Ways and Means Committee wouldn’t even touch it.”
Even Democrats are reluctant to raise taxes on the rich. That’s how entrenched a plutocracy we’re in.