U.S. Rep. Delia Ramirez (D-IL), with the support of members of the Patriotic Millionaires, introduced legislation in the House that seeks to make the tax code more equitable.
Her bill, the Equal Tax Act, looks to tax investment income at the same rate as labor income. The bill also closes other loopholes that are often used by the wealthy to avoid paying taxes.
“Over and over again, we have seen how Musk, Bezos, Zuckerberg, Trump, and other billionaires have extorted tax benefits from the American people. For far too long, they have exploited an unfair tax system that makes the rich richer at the expense of working families. It is time we ensure that the ultra-wealthy pay their fair share. My Equal Tax Act is a first step in building a fairer tax system that ensures working families have everything they need to thrive,” Ramirez said.
Specifically, the Equal Tax Act would:
- Limit the lower preferential tax rate for long-term capital gains and dividends to incomes under $1 million;
- End the stepped-up basis loophole and disrupt the “buy, borrow, die” strategy used by the wealthy to avoid taxation by treating capital gains as realized at the time of gift or death, with exclusion allowances of up to $1 million in gains;
- Enact a lifetime limit of $1 million on the use of like-kind exchanges on real estate gains; and
- Limit the pass-through deduction to incomes under $1 million.
This bill also includes protections for family farms and small businesses.
“For as long as I can remember, politicians and pundits have said that investors like me need lower tax rates as incentives to invest and grow the economy. They are and have been completely and utterly wrong. Even if the top income tax rate rises to 99% some day, I will always receive a greater return by investing than I would by doing the alternative: stuffing my money under my mattress. Mattresses do not provide very high returns,” Morris Pearl, the chair of Patriotic Millionaires and a former Managing Director at BlackRock.
The legislation is co-sponsored by Reps. Chuy García (D-IL), Pramila Jayapal (D-WA), Yassamin Ansari (D-AZ), Rashida Tlaib (D-MI), Shri Thanedar (D-MI), Ilhan Omar (D-MN), Chris Deluzio (D-PA), and Bonnie Watson Coleman (D-NJ).
“I’m thrilled to see Rep. Ramirez introduce this bill to correct this blatant injustice in our tax code and to take an important step forward in the fight for tax fairness in America,” Pearl added.
The bill is also supported by Indivisible; Responsible Wealth; Voices for Progress; Americans for Tax Fairness; Institute for Policy Studies, Global Economy Project; National Women’s Law Center Action Fund; United for a Fair Economy; Coalition on Human Needs; Oxfam America; Public Advocacy for Kids (PAK); NETWORK Lobby for Catholic Social Justice; Equal Rights Advocates; Americans for Financial Reform; People’s Action; Housing Action Illinois; Accountable.US; American Friends Service Committee; MomsRising; and National Association of Social Workers.