This is an important read if you do not know how are current tax code works and even if you do you should read this also. This book may be another one of those that will you read it will make you mad and it should. The author himself is in the millionaire club but he is also in group of well to do folks who agree that there has to be a change to the current system that has been manipulated by those with money through policy and politics. This is an easy to understand book that plainly shows the middle and lower class are in a disadvantage and end the end it also makes are economy suffer. Now do not get it wrong the author and his fellow participants in the Patriotic Millionaires club are not saying that people should not make money they just think everyone should pay their share and upper crust should pay more. You have heard all the arguments and may even believe some yourself with excuses like trickle down works, if you tax the rich they will not invest in markets or business and many others that are just not true. Did you know that 91% of the fortune 500 companies paid a tax rate of 0% or less. There was a time in our past that the upper crust paid a much bigger percentage in taxes and our country was probably the most prosperous at that time. There are so many things I would like to high lite in this review but it would make it extremely to long so give this a read.

It would only be fair to state that the trio of Bill Gates, Mark Zuckerberg and Jeff Bezos would be consternated with the facts contained within the confines of “Tax The Rich”, and for obvious reasons. A cross between a polemic and a plea, Morris Pearl and Erica Payne’s work is more a manifesto for income and wealth redistribution rather than a book simpliciter. Coupled with the fact that one of the authors of the book, Morris Pearl is a multimillionaire himself, some of the radical proposals promulgated represents a war on the rich, by the rich! The authors begin the book on an ominous note by paraphrasing the words of fellow millionaire Nick Hanauer, “the pitchforks are coming… for us Plutocrats.” And for good measure, Morris and Payne add their own chillingly dystopian footnote to Hanauer’ s bleak prescience, “he got it mostly right. But it won’t be pitchforks. US civilians own more than 393 million guns, 120 guns for every one hundred residents. I want to ask my fellow millionaires, do you really think you can protect yourself from mobs of angry, hungry people?”

Pearl and Payne reserve their choicest scorn for Zuckerberg, Bezos and Gates – the ‘Three Amigos’ as they are referred to in the book. Arguing that the Byzantine labyrinth of rules contained within a convoluted Tax Code that offer more loopholes for the rich than for the common working man, the authors proceed to illustrate with a blend of acerbic wit and stark vitriol, the various schemes prevalent in the American Tax Code and the recently enacted Tax Cuts and Jobs Act, that acts as an “enabler” to devious profit shifting and tax evasion measures. They discuss the advantages enjoyed by wealthy investors enjoying capital gains exemptions and tax free inheritance freebies by providing simple examples involving two pairs of couples. Doug and Carrie Werkhardt (the last name being a clever take on the words “work hard”) are ordinary people making a decent living by slogging their butts out, whereas Ronald and Melanie Slump (no explanations required), sip daiquiri on the beach and just make money by selling stocks and shares. By a convoluted working of the tax laws, the taxes which the Werkhardt’ s pay far exceeds those paid by the Slumps.

The authors provide a lucid explanation of various measures currently prevalent in the Tax Code that enable rampant accumulation of wealth at the highest levels of affluence, such as:

The Carried-interest loophole that allows fund managers to mischaracterize their ordinary income as capital gains tax, by pretending they are partners with their wealthy investors;

“The two and twenty” strategy exploited by private equity and hedge funds. The managers of these funds are paid 2% of the total value of the assets managed annually in addition to 20% of the fund’s profits above a certain threshold. The latter component of the remuneration is treated as capital gains since the funds “partner” with the investors;

A total absence of intergenerational wealth transfer tax that ensures that the first US$11.58 million of an estate is exempt from estate tax. This is a travesty, according to the authors, especially considering the fact that between 35% to 45% of all wealth in America is inherited;

Deferred Capital Gains Taxation benefits that ensure that taxes are paid only when the underlying assets are sold, and not when the value of such assets increase. Hence by choosing not to “sell” the assets forever, one need not pay any tax since there is no “realised gain”;

The “stepped-up basis” rule that insulates inherited wealth from being taxed. Instead of the basis being the value of a stock at the time the original transferor bought it, let’s say $10 million, the basis is adjusted to the value of the stock at the time of the transferor’s death, when it is transferred to the heirs. If the value of the stock at the time of such transfer is $100 million, this becomes the “stepped up” basis, and the heirs would need to pay capital gains tax on any value exceeding the $100 million upon sale of the inherited wealth;

After dwelling a wee bit more on extraordinarily convoluted and complex tax avoidance schemes such as the Double Irish Dutch Sandwich structures embraced by various multinational corporations to avail of the minimum tax rates offered by the Irish Tax regime (at the time of this review the scheme has been terminated), and stock options offered by companies such as Facebook to its employees so that they can treat the difference between the purchase price and the exercise price as expenses in their books, the authors propose some radical measures to tax the rich:

Equalize Capital Gains and Ordinary Income Tax rates for incomes over $1 million;

“End The Bracket Racket”. This proposal envisages increasing the marginal rates of tax on a progressive basis depending upon the income generated by the target taxpayers. The riveting debate between Michael Dell, the founder of Dell Computers and Dutch Historian Rutger Bergman, at the 2019 World Economic Forum in Davos is referenced by the authors here. Bergman took on Dell in arguing that the marginal rates of tax for the uber rich should be increased to 70%;

Quite a bit of attention has been devoted to the Elizabeth Warren and Bernie Sanders‘ Wealth Tax proposals. During the recent presidential campaigns both Warren and Sanders proposed their own models of a progressive wealth tax regime to tax the rich. While Warren’s “Ultra Millionaire Tax” was expected to garner $2.75 trillion over a decade, Sanders’ “tax on Extreme Wealth”, was estimated to add $4.35 trillion over a decade to the Government coffers;

Ban the deferred taxation scheme by switching to a “mark-to-market” system, where affluent investors are taxed every single year on the increased value of the assets they own, thereby foisting on them a periodic/annual tax bill just like any other ordinary taxpayer;

The authors also in a very incendiary heading titled “Vote the bastards out, the authors argue that intransigent and corrupt politicians who refuse to take a more nuanced approach to taxing the rich ought to be booted out by the voters.

Controversial, yet thought provoking. “Tax The Rich” instigates a fertile ground for debates, discussions and deliberations on one of the most topical and pernicious aspects of our time. However, where the book disappoints is, in reducing an otherwise essential and relevant discourse to a personal harangue. Whether it be talking about Steven Schwarzman, Sheryl Sandberg, Eli Broad or Sheldon Adelson, the tone employed is accusatory. This could have been avoided.

“Tax The Rich” – Invigorating food for thought.

(Tax The Rich: How Lies, Loopholes, and Lobbyists Make the Rich Even Richer " by Morris Pearl & Erica Payne is published by The New Press and will be released on the 13th of April 2021)

About the Book:
Tax the Rich! is a non-fiction social essay written by the rich themselves. The chapters alternate between the two millionaire authors, Morris Pearl and Erica Payne.

The group responsible, the Patriotic Millionaires, calls out America's elite, exclusive aristocracy while at the same time existing as its own exclusive club.

"The Patriotic Millionaires organization defines rich as people with incomes of $1 million and/or assets of $5 million...In order to become a member of the Patriotic Millionaires, you have to have at least that much money" (p. 1).

The group indeed has a cause with which the majority of (poorer) Americans can sympathize: We are rich, so tax us instead of the poor. Yet at the same time, it sets itself apart from the lower classes in its attempt to do right by them. From the qualifications of the group given on page one, the reader may be rubbed the wrong way by the simultaneously morally good and condescending arguments. (Do I really need to read an entire chapter on how rich people define "rich?") It feels like the rich vs. poor equivalent of mansplaining, further emphasized by the overly-casual, I-can-connect-with-you tone the authors use.

That being said, the book does offer several arguments and explanations that will leave the reader feeling excitement for change and righteous anger for the daily injustices wrought by the "political economy" (ch. 2)

The Good:

Tax the Rich! offers compelling evidence, explanations, and arguments for the cause of tax (and in general economic) reform. As a novice to the tax world, I didn't know, for example, the drastic difference between tax rates on earned income and inherited income. The book is a decently effective call to action to the general public—if that is indeed their audience (see below).

The Bad:

Pearl and Payne's varying tones throw the reader back and forth, with Payne's being the far more casual. Overall, the overly-casual tone may take away from the professional credibility of their work. It seems at times that their greatest qualification is being wealthy.

Interspersed throughout the chapters are single-frame comics about the wealthy and our tax code. While this is in theory interesting and offers the reader a change of pace that draws the eye, the comics have punchlines that don't quite hit the mark, working more as a summary of the preceding page than independent comedic commentary.

Who Will Like This Book:

I struggled to imagine the target audience of Tax the Rich! On one hand, it may be the lower and middle class families being harmed by our tax code. In this case, the millionaires themselves may not be the best arbiters of truth here—indeed, I would feel far more comfortable if at least one regular-joe, middle class economist was an equal co-author.

Perhaps, then, the audience is other rich people: This is why you should care about the injustice you perpetrate. A worthy cause, but unlikely to induce many wealthy folks to read a thesis that will only inconvenience them.

All said, the best audience for this book is the budding young political mind looking to understand where precisely the tax code is failing the constituents, and how to defend this position against attacks by fellow politicos.