Senate Finance Committee Chairman Ron Wyman (Senator Oregon – Leading U.S. Senate Democrat Statement)
This Congress the Senate Finance Committee has investigated a number of tax schemes that the very wealthy – with the help of armies of high-priced tax lawyers and accountants – use to pay virtually no federal tax for years on end.
Today, we’ll examine one strategy – among others – called “Buy Borrow Die.” Just three little words on the chart behind me, that have a huge impact. Here’s how it works:
A corporate raider buys a business, and then borrows against its growing, untaxed value to fund their extravagant lifestyle. Everything from superyachts, to luxurious vacations, expensive art deals, you name it. It goes up and up in value all while not paying a dime in tax. And when they die, their assets are passed to their kids – often entirely tax-free – and the cycle continues.
Now let’s contrast Buy Borrow Die against the tax system mandated for everyone else.
A nurse or a firefighter living in Philomath, Oregon are required to pay taxes out of each paycheck. Working people don’t get to play by the same rules as billionaires. They don’t get to call up an accountant every time they don’t feel like paying taxes.
Right now, the average billionaire wriggles their way into a measly 8 percent tax rate while a nurse or firefighter making $45,000 is paying a 22 percent tax on their wages.
How is that fair? Americans overwhelmingly believe it’s not. So it’s time to look to solutions that restore fairness to the tax code while still rewarding success. After all, that’s what our country is founded on: the idea that everyone has a chance to get ahead.
Luckily, there’s a solution that achieves both fairness and economic growth. It’s called mark to market. And here’s the kicker: there’s already a version of it in the tax code. That means we have the blueprint right in front of us to use as a model for mark-to-market provisions for billionaires. Put simply: mark-to-market would require billionaires to pay tax every year, just like everyone else.