What’s Driving Our Epidemic of Distrust?

Other stats, released earlier this month, vividly dramatize just how much cause Americans have to distrust Corporate America. U.S. companies, journalists at Popular Information report, currently owe over 200,000 American workers some $163.3 million in back pay. These millions represent wages that have gone unclaimed from companies found guilty of committing wage theft by, for instance, ignoring minimum wage or overtime pay regulations.

The federal Department of Labor has the authority to impose extra penalties on companies that repeatedly violate federal wage standards. But American corporations, the Peterson Institute for International Economics has shown, have precious little incentive not to commit wage theft. Over the decade that ended in 2016, Peterson analysts note, U.S. Department officials, identified nearly 3,000 of these repeat offenders. Only ten of them ended up with federal criminal convictions.

Deep pockets in the United States enjoy all sorts of other special treatment, maybe none more lucrative than how the federal tax code treats “unrealized capital gains,” the wealth our richest accumulate when the value of their stocks and other assets start soaring.

Researchers at Americans for Tax Fairness revealed earlier this month that our richest personally worth at least $100 million spent 2022 holding “at least” $8.5 trillion of “unrealized capital gains.” These gains, the AFR analysts went on to show, help these rich lead luxuriously “extravagant” lives. Yet these same gains “receive an ongoing exemption from taxation in life and a permanent exemption in death.”

Lawmakers in Congress have done next to nothing to fix this capital gains tax outrage. And they haven’t taken any steps to make sure the federal Department of Labor has enough staff to effectively identify and prosecute companies that willfully and repeatedly commit wage theft.

These failures, in turn, can help explain why the only major institution in American life that Americans trust less than Big Business just happens to be Congress. Over recent decades, lawmakers in Congress have consistently refused to seriously tax the rich and the corporations they run.

Back in 1958 — the high point of trust in American life — these rich faced a 91 percent tax on their annual income over $400,000, a sum equal to about $4.2 million today. The equivalent top rate today: 37 percent. Taking all loopholes into account, our richest 400 today pay federal taxes at just an overall 8.2 percent rate.

In healthy societies, people trust one another. How can we start building trust in today’s United States? What might make a good place to start rebuilding that trust? We could start by taxing — again — our most fabulously wealthy.