How 'tax the rich' changed over time

In the United States, inequalities are extremely high. Here, the richest 1% earns on average 1.3 million dollars a year, which is 26 times the average income of the remaining 99% of the population. Over time, the gap has widened: before the 1980s, the top 1% earned less than a tenth of the entire national income, while today it earns alone at least a fifth. Inequalities are a typical phenomenon of economic systems, they exist more or less everywhere, but usually governments try to mitigate them through specific measures. However, taxing the rich is very complicated politically, especially in the United States. Their presence in numerous influential circles makes the topic one of the most complex political issues. The US system has proven ineffective in truly taxing the wealthiest individuals, who sometimes pay, in proportion to their income, less to the state than ordinary workers. Billionaire Warren Buffett, for example, said he paid less taxes than his secretary. Similarly, Trump, during his tenure, approved a tax reduction benefiting the wealthiest segments of the population. This phenomenon over the years has fueled a sense of outrage among US citizens, whose wages have recently experienced sharp reductions due to the pandemic and inflation. The entire public opinion of the country, faced with the increase in economic inequalities in recent years, is becoming increasingly sensitive to the issue.

“Tax the rich” is no longer just a slogan

In 2021, US Representative Alexandria Ocasio-Cortez attended the Met Gala wearing a white dress embroidered in red with the words "Tax The Rich". This is a typical slogan of progressive parties around the world – Ocasio-Cortez herself, a member of the Democrats, is known for her strong positions on this issue. These political forces promote greater economic equality by proposing income redistribution plans. Even Biden, who is a moderate president, is fueling the idea that the rich should pay more taxes with his initiatives. He recently stated that no billionaire should have a lower tax rate than a teacher or a firefighter. In an attempt to reduce inequalities, the US president has already made several proposals – considered rather radical by the opposition – to tax the wealthiest, including repealing the tax cuts favored by Donald Trump in 2017. But in the country, the phenomenon of inequalities is so deeply felt that the slogan "tax the rich" has taken on not only a political dimension but also a cultural one – increasingly cross-cutting and relevant. Today, even people who historically do not align with left-wing ideologies embrace this position. Although with different approaches and tones, the issue of taxing the rich is now common to all parties, including right-wing ones.

Why it's difficult to tax in a balanced way

In purely theoretical terms, those who are richer should contribute more to the expenses of the state and therefore pay more taxes. The problem of finding the right proportion of taxes – so that they are fair and respect tax justice without discouraging economic activity – is still far from being solved. The possibilities of successfully taxing the wealthiest today are greatly limited by globalization, and by the fact that it is relatively easy for certain types of income to avoid tax pressures. Worldwide, there are no proposals to eliminate tax havens and harmonize tax systems in order to limit economic competition between countries – they are far from being realized even on a European scale. The main problem with instituting fair and progressive taxes is that they would require states to have detailed knowledge of their citizens' economic situations. The most radical (and perhaps utopian) proposals aim to privatize taxation, handing over tax collection to platforms like Google – which paradoxically, with its technologies, would be able to track users' income and expenditures more effectively than governments.