A progressive tax is the only way to fund a Green New Deal.

We need a tax plan that takes the opposite approach of the Trump tax plan, and the Obama-era tax plan that preceded it. A February 2019 poll, found that 76 percent of registered voters want the wealthiest Americans to pay more. Rather than failing to build the economy by reducing taxes on the wealthy, we need to actually build the economy by creating a strong foundation of purchasing power in the working class by ending poverty and economic insecurity.

First, we need to end the regressive payroll tax by lifting the $128,400 cap on Social Security taxes. Currently, undocumented immigrants contribute billions of dollars in federal taxes each year, and their income taxes and payroll tax dollars are keeping Social Security and Medicare solvent showing the hypocrisy and dishonesty of the immigration debate in the U.S. Lifting the cap on taxes for the wealthy would put Social Security on such a firm financial footing that it would be a major contribution to doubling Social Security payments in order to address the retirement security crisis.

Second, put in place more a progressive income tax, especially on the wealthiest. In Capital in the Twenty-First Century, Thomas Piketty recommends top marginal income tax rates of 80 percent on income above $500,000 and 50 or 60 percent on income above about $200,000 for the United States in order to combat inequality and fully fund and revitalize the public sector. In fact, throughout the 1950s and until 1962, the top marginal tax rate was over 90 percent and remained over 70 percent until 1980. This was a period of shared prosperity where wages kept pace with increases in productivity. The high top marginal rates incentivized top management to reinvest earnings in their companies instead of bleeding them dry with excessive executive compensation, as we have seen over the last 40 years with the decline of US manufacturing.

Third, institute a wealth tax, Emmanuel Saez and Gabriel Zucman of the University of California, Berkeley, proposed taxing wealth in excess of $50 million at 2 percent per year and wealth above $1 billion at an additional 1 percent tax. This would affect only seventy-five thousand households and would raise some $2.8 trillion over a decade.

Fourth, increase the inheritance tax, reversing the trend of reducing such taxes. Senator Bernie Sanders has proposed a top rate of 77 percent on estates worth more than $1 billion, and rates of at least 45 percent on estates valued above $3.5 million. This would raise up to $315 billion over a decade and only impact the wealthiest, not the ability of people to pass down their home to their children or small businesses or family farms.

Fifth, tax wealth at the same rates we tax work. Capital gains — profits from the sale of stocks, bonds, and other assets — are taxed at much lower rates than income from work is taxed. The current top federal rate for this tax is 20 percent, compared with the top income tax rate of 37 percent. This reform would impact the very wealthy. For households making over $10 million, capital gains account for 46.4 percent of income. For households making less than $100,000, capital gains account for a tiny 0.7 percent of the income.

Sixth, put in place a progressive carbon tax as a tool to combat the climate crisis. A progressive carbon tax taxes carbon at its source. Some of its proceeds are returned to individuals and households as rebates and other proceeds fund the transition to clean renewable energy.

Funding a Green New Deal

More progressive and ecological taxation is essential to fund the ecosocialist Green New Deal for climate and economic security. The goals are to transition to 100 percent Green Energy by 2030 while ending the insecurity of the economy with an Economic Bill of Rights that guarantees to all living-wage jobs, an income above poverty, decent housing, comprehensive health care, and lifelong public education from pre-K through college.

The Green New Deal can close racial income and wealth gaps by empowering racially-oppressed communities through community control of Green New Deal programs so these communities are no longer subject to discrimination and exploitation by outside employers, landlords, real estate agents, and other gatekeepers. In addition, HR 40 for a Commission to Study and Develop Reparation Proposals for African-Americans should be enacted to find the best way to create individual and collective wealth to compensate for hundreds of years of unpaid and underpaid labor.

In addition to a more progressive tax system, we need to get our spending priorities straight. The U.S. military budget is greater than those of the next 10 largest military powers combined and eight of them are US allies. The military budget takes more than 60 percent of federal discretionary spending totaling $989 billion annually. $21 trillion of Pentagon financial transactions between 1998 and 2015 cannot be traced, documented, or explained.

The U.S. can cut its military budget by 75 percent and still spend more on the military than any other nation. We can invest the resulting peace dividend in a Global Green New Deal to meet basic needs like clean water and preventive health care around the world as well as to help developing countries leap over the fossil fuel age into the solar age. By acting as the world’s humanitarian superpower instead of its global military occupation force, we can make friends instead of enemies. A Global Green New Deal will build a sustainable peace where the world’s nations work cooperatively to solve our common problems of the climate and poverty.

Amazon, run by Jeff Bezos, the world’s richest man, paid no federal taxes on $11.2 billion in profits in 2018. In comparison, undocumented people contribute some $11 billion in taxes every year. The third richest man in the world, Warren Buffett, admits he pays a lower tax rate than his secretary. These are two examples of many that demonstrate that transformation of the US tax system is urgently needed.