Rich and want to escape Elizabeth Warren’s wealth tax? CNBC says get divorced.
Sen. Elizabeth Warren, D-Mass., and her proposals are facing increased scrutiny by the media as she rises in the polls, but one outlet, CNBC, is advising its wealthy viewers on strategies for avoiding her wealth tax. | Scott Sonner / AP

Readers of People’s World certainly read the news with a consciousness of the fact that the media is one key site of class struggle among many in U.S. capitalist class society. But it is nonetheless worth decoding the language of the corporate media as we seek talking points that help us communicate and unmask the grotesque severity with which mainstream media outlets aggressively promote the interests not just of the wealthy, but of the wealthiest .1% of the U.S. population.

As Elizabeth Warren, often characterized as a “socialist” by the right wing, has surged in the polls in recent weeks, the assaults on her and fear-mongering around her agenda have intensified in the mainstream media.

This intensified assault, informed by a maniacal anxiety about her wealth tax and health care agendas, particularly, provides an opportunity to talk about and make clear the ridiculously unjust and irrational reality and dynamics of capitalism and the violence the system inflicts on masses of human beings simply to endow a very few with excessive wealth they in no way need.

Imagine picking up a newspaper, or scrolling through your favorite internet news source, and coming across articles with headlines such as “How to Burglarize Your Neighbor’s Home,” “How to Undermine Public Education for America’s Children,” or “How to Destroy Sidewalks and Streets and Sabotage Other Infrastructure.”

I like to think you’d find that news source rather anti-social, even criminal, in its violent and vandalistic hostility toward our neighbors, our fellow people living in the United States. You might even think this news source must be the publication of some underground fringe group and certainly not mainstream media production.

And yet recently CNBC.com featured a video with the headline “How Married Couples Can Avoid Elizabeth Warren’s Wealth Tax.”

If you think about it, an article instructing people in how, put nicely, to avoid—or, put more bluntly and accurately, downright evade—paying taxes is really not all that different from the articles I invented above. Tax evasion is, of course, a federal crime; and while it might commonly be understood as a crime against the government, it is really, also, a serious and violent crime against the people.

Taxation, properly understood, is the mechanism we have for enabling people to pay their part, their fair share, for the services, projects, and infrastructure which we all use in the course of our daily lives.

America, indeed, provides a fertile environment for growing and accumulating wealth. And, undeniably, as Elizabeth Warren has famously pointed out in the past, those who have had the good fortune through their genius, hard work, talent, or just dumb luck to experience great financial success have surely taken advantage of what the nation has provided them in the form of roads, bridges, ports, educated workers, security, military, and police protection, and so forth.

While we can argue over what constitutes one’s fair share, we can’t really argue the fact that paying taxes is simply paying the bill for all the services and infrastructure the nation provides for individuals to generate wealth.

Not paying taxes, conversely, is equivalent to taking money from one’s neighbor or helping to destroy the public infrastructure we all need and use. If you avoid or evade paying taxes on the wealth you’ve earned in this nation, then I’m either going to need to pay more to get the same services I’ve been receiving or else those services will be curtailed. The education I receive won’t be as effective; my access to healthcare will be diminished; bridges and roads may crumble; Social Security benefits may vanish, leaving me high and dry in my senior years; and so forth.

Put another way, when people engage in tax evasion they are defaulting on their obligation to support the infrastructure and services that make all of our lives possible, that keeps us healthy, that educates us, that basically keeps alive.

Hence, evading one’s tax obligations, paying one’s bill, is, in fact, a violent crime against people. It’s a dine and dash on a grand scale.

And let’s really think about the minimal impact on people’s wallets and substantial benefits for people’s lives in the nation Warren’s proposal, under attack all week on CNBC, would have.

When it comes to the tax bill Warren is proposing, here are the basics: For every dollar in assets people own over $50 million, they pay a 2% tax—or 2 cents per dollar. For every dollar over $1 billion, they pay 3%.

The tax would impact, it is projected, about 75,000 households (less than .1%) and raise $275 trillion over ten years. These revenues would be used to pay for universal childcare and pre-K ($700 billion over ten years); free college tuition at public institutions, money for historically Black colleges, and the forgiving of a good portion of student loan debt (together all of this costs $1.25 trillion over ten years); and then she proposes the remaining $750 billion would be down payments on Medicare for All and the Green New Deal.

And, let me repeat, this tax impacts less than .1% of households. The benefits seem transformational for our nation’s people, for our nation. And while some dispute whether the tax can really bring in the $275 trillion Warren’s team projects because of tax avoidance schemes, imagine if it brought in even half of what is projected. The good for people’s lives would be tremendous.

And yet on CNBC, all the energy and thought go to pondering the legality of schemes for those who own more than $50 million assets to evade the tax. And the big solution for rich couples that CNBC proposes: Get a divorce to legally split the wealth.

Robert Frank explains:

The strategy is fairly simple. Warren’s plan would impose a 2% annual tax on wealth over $50 million and a 3% tax on wealth over $1 billion. If a wealthy couple is worth $100 million, they would pay a 2% tax on any wealth over $50 million, which in their case would amount to $1 million a year. But if they divorce and split their fortune in half, they would each be worth $50 million and neither would owe any wealth tax.

CNBC’s “divorce strategy” to save the super-rich from paying their taxes.

And Frank continues, exploring the legality of the strategy:

Accountants to the wealthy add that as long as couples follow the legal process of divorce, the Internal Revenue Service wouldn’t likely challenge the strategy.

“I don’t know of any cases where the IRS has stepped into a legal divorce and challenged it,” said Joseph Perry, tax and services leader for Marcum.

People disparage Warren (along with Bernie Sanders) as some dangerous socialist. And yet these tax evasion schemes, the devising of a capitalist mentality, seem to me most dangerous and harmful to Americans.

Instead of putting energy and thought into figuring out how to avoid improving American lives and the nation overall, Warren’s critics seem more intent on figuring out how to defraud the people. And they’re happy to talk about it openly in the mainstream media.

They seem un-American in their desire to avoid helping other Americans, making American lives possible and better, just by having .1% of households pay a fair share.

Is it just me, or is Warren’s supposed “socialism” as appealing as baseball and apple pie, far more in the vein of the American traditions we like to celebrate than these schemes of the wealthiest capitalists?


CONTRIBUTOR

Tim Libretti
Tim Libretti

Tim Libretti teaches in the English Department at a public university in Chicago where he lives with his two sons.

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