Category Archives: Broken in the USA

guns & gas

Billionaires taxes

Broken in the USA, Economics, tax related issues

I Asked ChatGPT What Would Happen If Billionaires Paid Taxes at the Same Rate as the Middle Class

Story by Laura Beck

Taxes can get you thinking about fairness. For instance, when I’m calculating deductions on my salary and watching a decent chunk go to Uncle Sam, I can’t help but wonder: What if the ultra-wealthy paid the same percentage of their income in taxes that regular people do?

The ‘Buy-Borrow-Die’ Strategy

ChatGPT broke down something called the “buy-borrow-die” strategy that wealthy people use to minimize taxes. It sounds like financial wizardry because, honestly, it kind of is.

Here’s how it works: Billionaires borrow money against their stock holdings (which isn’t taxed), live off those loans and then pass their assets to heirs largely tax-free when they die. Meanwhile, regular people like me can’t defer taxes on our paychecks or borrow against our retirement accounts without major penalties.

The AI used ProPublica data to illustrate this: “The top 25 billionaires saw their wealth grow by $401 billion from 2014-2018, but paid just $13.6 billion in federal income taxes — an effective rate of 3.4% on wealth growth.”

That 3.4% figure is what really stung. While they’re paying their legal tax obligations on realized income, their actual wealth is growing at a rate that’s taxed far below what middle-class workers pay on their salaries.

What If We Changed the Rules?

ChatGPT ran the numbers on what would happen if billionaires paid taxes at the same rate middle-class families do — around 15%-22%.

Using the ProPublica data, if those top 25 billionaires had been taxed at a 20% rate on their wealth growth, they would have paid around $80 billion instead of $13.6 billion. 

“Extrapolate that across approximately 1,000 billionaires?” the AI asked. “You’re talking hundreds of billions in added revenue annually.”

Where That Money Could Go

The AI outlined several ways this massive revenue increase could transform government services:

  • Healthcare: We could expand Medicare and Medicaid, potentially moving toward universal coverage.
  • Education: Fund universal pre-K or make community college free for everyone.
  • Infrastructure and climate: Invest seriously in clean energy projects and fix our crumbling roads and bridges.
  • Debt reduction: Actually pay down the national debt instead of adding to it every year.

ChatGPT noted that this extra revenue could “stabilize the economy by boosting the spending power of everyday Americans.” Basically, reducing inequality in a way that helps everyone, not just those at the bottom.

What Surprised Me Most

The most eye-opening part was learning that the problem isn’t necessarily that billionaires are breaking the law or even paying lower rates on their taxable income. The issue is that our entire tax system is designed around taxing work rather than wealth.

“Middle-class families can’t defer taxes on wages or borrow against stocks tax-free,” ChatGPT pointed out. This creates a fundamental unfairness where people who work for their money get taxed immediately, while people whose money grows through investments can delay or even avoid those taxes entirely.

What We Need To Think About

After diving into ChatGPT’s analysis, I realized the conversation about billionaire taxes is more complicated than simple rate comparisons. Under current law, wealthy Americans do pay their required taxes. But the system allows their wealth to grow in ways that are largely untaxed, while regular workers pay taxes on every dollar they earn.

The AI concluded that if we could successfully tax billionaires more like middle-class workers, the results would mean hundreds of billions in additional revenue annually and potentially better funding for health, education and climate programs. What’s more, it could have the power to reduce inequality and improve public trust in the tax system. 

Maybe the real question isn’t whether billionaires should pay more taxes, but whether our entire approach to taxing work versus wealth makes sense in an economy where most billionaires’ fortunes come from asset appreciation rather than traditional income.

As ChatGPT put it: “The U.S. could significantly reshape its fiscal and social landscape” — if we can figure out how to make it work in practice.

Debt Revisited

Broken in the USA, Economics, Education, Government Issues

Here’s how the government spent $6.8T last year   (From “USA Facts” article)   The federal government spent $6.8 trillion in fiscal year 2024. We’ll say that again.  $6,800,000,000,000. We’re not saying that’s good or bad, too much or too little. But we can agree that that scale is hard to fathom, right?    Our new agency spending chart makes 2024 spending for the executive, legislative, and judicial branches easier to understand. We even tracked the president’s budget, independent agencies such as NASA, and entities that get federal money but don’t slot neatly into other categories (think the Smithsonian).   A few insights:   The Department of Health and Human Services spent $1.7 trillion in 2024. That was about 25.4% of federal expenditures, primarily driven by the $1.5 trillion in spending by the Centers for Medicare & Medicaid Services.     Proportion of federal budget across cabinet agencies   The Social Security Administration accounted for the biggest share of independent agency spending: $1.5 trillion.  Federal Student Aid accounted for 2.4% of federal spending, totaling $161.0 billion.  The National Parks Service spent just under $4.5 billion, for 0.07% of federal spending. Congress runs the botanic garden adjacent to the Capitol Building. The garden accounted for $19.0 million in legislative branch spending.     FDA agency hover                                    

Operation Paper Clip Revisited

Broken in the USA, Government Issues, History

Operation Paper Clip Revisited

The fact that the Russians were so far ahead of the USA in rocket technology in 1957 continues to bother me. The top German Rocket Scientist and considered genius Werner Von Braun defected immediately after WW 2. He recruited 1,600 of the best German scientists in what was essentially a German space program. In contrast Russia’s program was essentially home grown. https://en.wikipedia.org/wiki/Soviet_space_program

There is no question that Russia was far behind Germany in rocket technology in 1945. In 12 years, they made terrific strides leading up to the launch of Sputnik 1. It is true that they were able to use the assistance of a few German scientists and had access to V-2 technology. The German team assembled in the USA it was more than impressive. My question is what were they doing for 12 years? Does anyone know?

I don’t even have a theory but the lack of rocket technology progress after WW 2 is alarming. As the saying goes: “There is something rotten in Denmark”.