Testimony of Joseph Stiglitz before the Senate Budget Committee: “Making Wall Street Pay Its Fair Share: Raising Revenue, Strengthening Our Economy”

The comprehensive reform agenda I’ve laid out will take time and effort to implement fully. But in the meanwhile, there are some simple reforms that could be done quickly:

1. Remove the tax advantage for capital gains over other forms of income;
2. Implement a constructive realization policy, taxing assets based on their current value rather than only when the gains are realized, and fully tax any unrealized/untaxed capital gains at death;
3. Implement a minimum income tax, along the lines of President Biden’s proposed “Billionaire Minimum Income Tax” and Brazil’s proposed 2 percent global minimum wealth tax now being discussed within the G20;
4. Increase the minimum corporate tax rate;
5. Eliminate tax subsidies for fossil fuels and implement carbon and other environmental taxes;
6. Expand and make permanent subsidies that increase productive economic activity, such as R&D tax credits;
7. Implement a financial transactions tax;
8. Implement windfall profits taxes;
9. Reverse preferential tax treatment for income from land and other natural resources;
10. Require greater transparency requirements for stock options, including disclosure of dilution of existing shareholders and eliminate preferential treatment (including their being subject to payroll and Medicare taxes) of pay, including retirement benefits, for all high-income individuals, including CEOs.

We can create a more equitable tax system that generates substantially more revenue and promotes growth. The principles are clear, and in many cases, their application is straightforward. Vested interests, reflected through the power of money in our politics, are what stand in the way.