Massive income and wealth disparities are pervasive in our country, dividing our communities and threatening our democracy. Here’s an alarming fact: The top quarter of 1 percent of Americans have as much wealth as the bottom 90 percent. We see the negative effects of these disparities in our schools, in our health care system and in the labor force.
Last week we attended a Westminster College Pro Bono Tax Clinic — a Community Volunteer Income Tax Assistance (VITA) Program that offers tax preparation alongside other financial services and advocacy, all free. Low- to middle-income individuals and families can file their taxes knowing they are getting the help they need to legally claim back every dollar. They can also obtain financial assistance by participating in programs such as Individual Development Accounts (IDAs), which help put modest savings with a match into an account toward homeownership. Fortuitously, we met a man there having his taxes prepared. We learned that, as a result of an IDA and related financial advice from service providers for those with low incomes, he now owns a home — something he never thought would be possible.
During the 2016 tax season, VITA programs filed more than 3.8 million returns, helping taxpayers claim refunds. But despite all the good it does, VITA is not permanent. Our elected officials should move to support legislation to make it so. Wealthy individuals can (and often do — just look at President Donald Trump) hire a team of tax professionals who are paid to find every legal loophole to increase their refunds or decrease their amounts owed. Why shouldn’t regular people be afforded the same knowledge of the tax code? Why should a tax preparation fee be the barrier to this valuable service?
According to the Assets & Opportunity Scorecard, in Utah alone, about one-third of people are living in liquid asset poverty, meaning they do not have enough savings to survive at poverty levels for three months in the case of an emergency. This is simply not right. Shouldn’t we all be committed to building an economy that gives everyone the opportunity to achieve the American dream?
Americans have been promised a complete tax overhaul by the current administration and Congress. Our own Sen. Orrin Hatch is the chairman of the Senate Finance Committee, where the tax debate will be critical. Frankly, our tax system is set up in a way that disproportionately benefits those with considerable resources (no real surprise). The top 1 percent watch their bank accounts significantly grow every year. Last year $660 billion in loopholes went to the wealthy, while many other Americans struggle to accumulate any savings or other form of wealth.
To address this inequity, Patriotic Millionaires has partnered with CFED, a national think tank, on Turn It Right-Side Up, a campaign to advocate for tax reform that works for all Americans, not just the wealthy few. We urge Hatch to advocate for a tax code that helps all Utahns get ahead.
But while we may hope for speedy tax reform that promotes a more inclusive economy by raising taxes on the rich and closing egregious loopholes, we realize it will be a long process. In the meantime, critically important programs are already in place helping everyday Utahns climb up the economic ladder. These programs (including VITA) deserve to be permanently funded.
Art Lipson is a hedge fund manager. Jonathan Ruga is the CEO of Sentry Financial. Both live in Salt Lake City and are members of the Patriotic Millionaires.
Read Deseret News article here.