For many Americans, Tax Day is a source of stress as they rush to file their federal returns with the Internal Revenue Service (IRS). However,according to activists,for the nation’s wealthiest,it’s often “just another Tuesday.”

According to activists, the “stepped-up basis loophole” allows wealthy families to permanently erase millions in capital gains taxes by resetting the market value of those assets to their value at the time of the original owner’s death.With this, it becomes relatively simple for the rich to inherit tens, even hundreds of millions of dollars, and pay almost nothing in taxes. Someone working for that money, on the other hand, would pay over a third of it in federal income taxes.

According to Abigail Disney,an emmy-winning documentary filmmaker,activist,and member of the patriotic millionaires,and Morris Pearl,the chair of Patriotic Millionaires,money is money,whether earned or inherited. they argue that wealthy investors and heirs should not pay lower tax rates than working people.

“Why do we have a tax code that says working people should be taxed more than wealthy investors and those who got rich just by virtue of being born into the right family? At the end of the day, money is money, whether you worked for it or whether you inherited it. As an heiress and an investor, we should not be paying lower tax rates than people who earn their money from working.”

They propose taxing all capital gains over $1 million at the same rates as ordinary income and replacing the current estate tax with a simpler inheritance tax that treats inherited wealth as income.

The activists also highlight the “Buy,Borrow,Die” strategy,were the ultra-rich use their assets as collateral to borrow vast sums of money at extremely low interest rates to live on,declaring little or even negative “income” on their tax forms. This allows them to avoid capital gains taxes, which are only levied when assets are sold.

President Biden has proposed the Billionaire Minimum Income Tax, which would tax the unrealized capital gains of the wealthiest households. Others have proposed wealth taxes on billionaires to address this issue.

Disney and Pearl suggest increasing the top income tax rate and adding more tax brackets to reflect the differences between the rich and the ultra-rich. Currently, the top rate is 37% for any income over $578,125 (or $693,750 for married couples). They advocate for returning to top rates as high as 90% for people making more than $100 million a year, similar to those in place during the most prosperous decades of the 20th century.

These changes, they argue, would help stem the flow of wealth toward a smaller group of people, making the economy and democracy more stable.

Proposed Tax Reforms

“It’s time for the tax code to treat all income equally.”

The activists propose several key changes to the tax code to address what they see as inequities:

1. Taxing capital gains over $1 million at the same rates as ordinary income.
2. Replacing the estate tax with a simpler inheritance tax.
3. Implementing a Billionaire Minimum Income Tax to capture unrealized capital gains.
4. Increasing the top income tax rate to as high as 90% for those earning over $100 million.