The American tax system, like most western countries’ tax systems, only taxes wealth produced, such as wages and share/bond sales. In this case, however, in wages/salaries and sales of securities, taxation is mainly borne by the labour and the lower (wages/salaries) but also by the middle-income classes of society respectively leaving untouched any wealth that increases product of time.
Because of this institutional framework, most of the state’s revenue comes from much of the people, while a 2% who make up the richest in society escape taxation because their assets increase over time and are used as collateral to pay their lavish cost of living.
The strategy advised by lawyers and accountants is to constantly get grace periods in terms of repaying their loans, which grace periods renew them until their death and after their death to start repaying their loans (ProPublica: How we calculated the True Tax Rates of the Wealthiest, (By Jeff Ernsthausen, Paul Kiel & Jesse Eisinger)( www.ProPublica.org ).
The solution to this problem is, on the one hand, to impose a tax rate on the wealth in possession, which will be valued every year and its valuation will be used as a declaration for its taxation.
At the same time, an increased tax on dividends and a lower corporate tax rate should be imposed to promote investment in the real economy. Income tax should be supplemented by property valuation tax.
