IPS Report: Tax loopholes are a rigged system for the wealthy

Sarah Anderson, Director of the Global Economy Project at the Institute for Policy Studies, joined America's Work Force Union Podcast to discuss the disparities between executive and worker compensation, the intricacies of the U.S. tax system and possible reforms to create a more equitable economic landscape.

A recent IPS report revealed alarming inequities in Amazon's compensation structure. Former CEO Jeff Bezos made $6.2 billion due to 2017 tax cuts, while the median Amazon worker earns just $37,181 annually. Anderson shared that 72 percent of Amazon employees have zero balances in their 401(k) accounts, despite the company's matching program. Anderson said this disparity highlights the broader issue of wealth concentration and low-wage workers' struggles in building financial security.

Anderson explained how the current tax system favors the ultra-wealthy by taxing income from wealth at lower rates than income from work. She said this treatment allows billionaires like Bezos to pay significantly less in taxes proportionally than middle-class workers. Anderson said the report advocates for equalizing tax rates on wealth and work income, lifting the Social Security wage cap and implementing a corporate tax rate increase for companies with excessive CEO-to-worker pay ratios.

Finally, the discussion touched on the historical context of tax policy shifts, tracing back to the Reagan era. Anderson noted that top marginal tax rates have plummeted from over 70 percent in the mid-20th century to current levels, contributing to widening wealth inequality. She discussed the need for comprehensive tax reform to address these longstanding issues and create a more balanced economic system that benefits workers and small businesses rather than billionaires and large corporations.

Listen to the full episode of the America's Workforce Union Podcast above, featuring Anderson, to hear more about the tax system's impact on workers and potential reforms.