U.S. Inequality Has an Effect on Election Campaign Financing
In another revelation concerning U.S. inequality, the Paradise Papers have revealed that seven Republican super-donors contributed as much as $350.0 million to federal and state election campaigns in 2016. Meanwhile, the combined net worth of these these billionaires is estimated at $142.0 billion, much of which is held in offshore tax havens, hidden from U.S. tax collectors.
Via huge political action committees (Super Pacs), these billionaires were able to flood political campaigns with hundreds of millions of dollars while largely remaining anonymous. Using Super Pacs allows for unlimited donations to election campaigns so long as the organization is not directly affiliated with the politician.
This is yet another stark example of U.S. inequality, wherein billionaires are able to avoid paying taxes while also wielding outsized influence on election results.
Three of the Super Pacs named in the Paradise Papers are “Rebuilding America Now,” “Right to Rise USA,” and “American Unity.”
The revelations in the Paradise Papers are similar to those found in the Panama Papers, which were leaked in 2015. The data leaks reveal that many wealthy people across the world, from heads of state to leaders of industry, have long been stowing much of their personal profit in countries and territories with lax tax laws. This is also an effective means to deny their own home countries the ability to collect.
What makes this list particularly egregious in regards to U.S. inequality is that seven billionaires were able to not only hide their funds offshore—and therefore avoid paying their fair share of taxes (while millions of less-wealthy U.S. taxpayers were not quite so fortunate)—the amount of money they were able to flood into election campaigns certainly had an effect on the results, which are likely to reinforce the already-comfortable positions they occupy when it comes to tax laws.
In fact, the recent White House tax plan that is being considered in Congress is largely seen as a major win for corporations and rich business owners. The corporate tax rate of 35% will be dropped to 20% if the bill passes in its current form.
Meanwhile, gains for middle- and lower-class Americans are likely to be minimal, while some may even see a tax hike, depending on how the final bill shakes out.
With all that money having been poured into the election, and the current tax plan likely to benefit these seven individuals, U.S. inequality seems to be more pronounced than ever.
“The seven Republican super-donors who keep money in tax havens,” The Guardian, November 7, 2017.