Unrigging the Tax System with Morris Pearl |

[00:00:03]Hello and welcome to another episode of The Power You Have. [music] I'm your host, Congresswoman Permila Jipal, and I am so thrilled to be with you today.

[00:00:13]Now, for those of you who are new, this podcast [music] digs into how each one of us can harness the power that we have, whether that's in our jobs or our communities, whether it's as organizers or advocates, how each of us can own and build our power in our day-to-day lives, how we can each turn our fear and anger into action and progress. Now, this week we're going to be talking about an issue that affects all of us, and that is the completely rigged nature of the US tax system that concentrates wealth amongst a tiny group of billionaires and ultraillionaires and hurts the 99% of working families. I'm recording this episode on Wednesday, June 10th, and by many reports, on Friday, June 12th, when this episode airs, Elon Musk will have become a trillionaire. the first in the world as his corporation SpaceX goes public. And a lot of times these gargantuan numbers get thrown around.

[00:01:13]But I want to make it very clear what a trillionaire means. Take a billionaire and multiply it by a thousand. That is what a trillionaire is worth. Literally no person could spend this amount of money in a lifetime. If you lived for 80 years, it would mean spending $12.5 billion dollar every single year or more than $ 34 million every single day of your life. A trillion dollars is more than the economy of most countries around the world. In fact, it's enough to buy Switzerland. It would be enough money to buy every single piece of property in Houston, the third largest city in the United States, and still have about a hundred billion dollars left over. Billionaires love to buy sports teams, right? Well, this is enough money to buy every single sports team on the planet. Remember how hard we fought for that bipartisan infrastructure bill a couple of years ago to help rebuild our roads and our highways and install EV infrastructure across the country? That was for a trillion dollars. And that was an investment to benefit everyone, not just a single person. What about all that student debt across the country that's crippling American families? Well, a trillion dollars could wipe out all of that student debt. With the trillion dollars, we could also send a $2,900 stimulus check to every single person in the country. So, there's a lot of good that you could do if you didn't concentrate wealth of this nature in one person. But that's not where we are today. Today in America, the richest 1% of Americans own 50% of our country's wealth. And half of Americans combined own just over 2% of the wealth. And as we're going to talk about today, that is not an accident. That is actually by design. It is a rigged system, one that is built to favor those at the very top and squeeze every last dime out of those at the bottom.

[00:03:32]I want to be super clear that wealth at this gargantuan level is not earned through hard work. It's taken through monopoly power, through corruption, through profiting off of underpaid workers, through cutting corners on workplace safety and a tax code that is deliberately set up to concentrate that wealth and to help the wealthy avoid paying their fair share of taxes. A lot of this also stems from the fact that we just don't tax wealth in this country.

[00:04:06]Instead, we tax income. That means that when CEOs get their compensation packages, and a lot of it is not in the form of daily wages like you and me and most of the workforce has, those folks get to skip paying taxes and they use all kinds of loopholes to hoard up that wealth. So both in terms of real wages and in terms of wealth accumulation, workers are getting screwed. In 2024, the average CEO was paid 281 times as much as workers. In 1965, CEOs were typically paid 21 times as much as the average worker. So, you see how these insane CEO compensation packages are happening even as warehouse workers toil in these tough conditions and are denied bathroom breaks and forced to pee into bottles. Now, get this. Just from 2014 to 2018, Elon Musk paid a tax rate of just 3% in federal income tax, even as his fortune increased by about 13.9 billion, almost $14 billion.

[00:05:17]Now, consider that the average working family pays at least 12% of their income in taxes. Well, if you look at corporations, at least 88% of the largest corporations in America paid zero in federal taxes in 2025, despite having more than $105 billion in pre-tax income. That was in large part thanks to the Republicans big bad betrayal bill that they passed last year and Trump's 2017 tax scam act that just kept shoveling tax cuts to the wealthiest few. Look, I personally just do not think we should have trillionaires.

[00:06:00]Period. There is something wrong with a system that allows individuals to amass this kind of wealth while 90 million people remain without any health care or with insufficient healthare. There's something wrong when in the richest country in the world we have 120 million poor and lowwealth people and then a few trillionaires and billionaires. There's something wrong when the richest of the rich are buying yachts and Rolexes while low-income parents are working two and three jobs and yet still unable to afford groceries, rent, child care, healthcare. But it's not just the yachts and the Rolexes. Now, these same trillionaires and billionaires are spending all this money literally to buy elections so that they can keep the system even more rigged. Elon Musk alone spent a total of more than $290 million on the 2024 election, effectively handing Republicans and Trump a blank check as he used his enormous wealth to advocate for himself and his billionaire buddies. Today, cryptocurrency and AI interests are pouring hundreds of millions of dollars into buying congressional seats so they can never get regulated. These campaign donations allow trillionaires and billionaires to buy our democracy and that is incredibly dangerous. And so this week, as Musk is about to become the first trillionaire in our country, it seems like it's time to talk about real ways to tax the rich and restore our democracy.

[00:07:39]I have been focused on this issue since I got to Congress. There is a lot that we need to do to fix this. But one of the very first things we should do is tax wealth. And that's why with Senator Elizabeth Warren, I'm proud to lead the Ultramillionaire Tax Act. This is a super simple bill. It just says that if your household has a net worth between 50 million and 1 billion, you pay a two cent tax on every dollar.

[00:08:10]So your first 50 million of wealth is taxfree. If you're above that $1 billion threshold, you pay an extra cent, a total of three cents on the dollar. This is a tax that would only affect 0.15% of households in America. And even doing just that would bring in over $6.2 trillion over the next decade. That is money that could be reinvested into health care, into child care, education, a transition to renewable energy, affordable housing, social security, you name it. Investments that would actually benefit all Americans and give people a real shot to thrive and not just simply survive. Across America and across party lines, Americans actually agree on this.

[00:09:04]It is way past time for billionaires, corporations, and the ultra-wealthy to just pay their fair share. And there are a lot of proposals that I'm proud to support to do just this, both on the individual wealth level and on the corporate tax level. There are even billionaires and millionaires who want to pay their fair share. They see that doing so would be good for everyone and good for America. One unusual example of this is actually Warren Buffett, the famed investor and former CEO of Berkshire Hathaway, who has long argued that the wealthy and large corporations should pay more. In 2024, Buffett actually argued at his own shareholder meeting that federal taxes could effectively be zero for every single American if some 800 companies just paid their fair share of taxes. And that would be great for our country, for working people, right? What a contrast Warren Buffett is to Elon Musk or Jeff Bezos or all the big CEOs who fight higher taxes at every level. But Buffett's not the only one. One of the truly great organizations that I get to work with is Patriotic Millionaires.

[00:10:23]This is a group of highwealth Americans who are actually saying that they also want to be taxed more. They understand that this social contract requires all of us to pay our fair share. And like Buffett, they believe that this is what would truly advance our democracy and be good for everyone. Patriotic Millionaires advocates loudly and proudly for policies that ensure millionaires and corporations pay their fair share of taxes and that all workers receive a living wage. So joining me today is my friend and the founder and chair of Patriotic Millionaires, Morris Pearl. Morris is a co-author of Tax the Rich and Pay the People. He is known for his advocacy for a more equitable distribution of wealth and for holding the wealthy accountable for their societal impact. Welcome to the power you have. Morris Morris Pearl, it is so good to have you with me here.

[00:11:21]>> Thank you, Representative. Great to be here. Well, I've given everybody a little bit of your background, but now I want to talk a little bit about your story.

[00:11:28]>> Um, you were a managing director at BlackRock.

[00:11:31]>> Yes, ma'am.

[00:11:32]>> What is BlackRock?

[00:11:34]>> BlackRock is a big asset management company.

[00:11:37]>> They manage basically people's retirement funds, people's 401ks, IRA, mutual funds, >> and just do a huge amount of it. It's one of the biggest in the in the world, actually. So, you were, I assume, amassing lots of money in that position, tens of millions of dollars, maybe. And you don't have to tell me how much. And you made a decision to leave in 2014.

[00:12:06]And I'm wondering if you know the moment that you made that decision and the moment that you actually ended up doing something to tax people, wealthy people like yourself.

[00:12:17]>> Yeah. Really, what happened was I was not personally managing people's money.

[00:12:21]Yeah, >> my department was actually hired by the government >> to figure out how much the bailouts back in 2007 and 2008 were costing the taxpayers.

[00:12:30]>> I spent a couple of years delving into City Bank's balance sheets.

[00:12:34]>> Was I went to city I was analyzing city bank auto financial about car loans.

[00:12:40]>> Yeah.

[00:12:40]>> Was a little suspicious when they found out I didn't know how to how license plates were attached to cars because I [laughter] never actually owned one.

[00:12:47]>> But they did realize I knew all about car loans.

[00:12:49]>> Uhhuh. And one day we were doing a similar project for Greece.

[00:12:53]>> Uhhuh.

[00:12:54]>> And I was running a due diligence meeting in a top floor dining room at the headquarters of bank in downtown Athens.

[00:13:01]>> And I walked over to the window so people wouldn't see. I took two chocolate puddings from the dessert table >> and I thought I was watching a parade for a minute and there was it's not a parade. It's not a holiday. I'm seeing a something between a demonstration or riot moving down the street. And I turned around and walked back to these people I was having lunch with. And I was thinking to myself, am I really doing any good for the people of Greece other than a couple of dozen bank executives whose jobs we were saving by getting their bank bailed out?

[00:13:31]>> And a few months later, I told the people of Black Rockck, I've done as much as I want to do for you, >> and I've been doing advocacy work as a volunteer for the last uh 12 years now.

[00:13:42]>> That's really incredible. And I heard that the story had something to do with chocolate pudding. So, I I'm glad you mentioned it was the chocolate pudding that that you had taken over there. Um, >> you know, we're up against a lot of CEOs, billionaires, uh, now apparently a trillionaire this week with with Musk becoming a trillionaire apparently.

[00:14:03]>> And the argument is always the same. The argument is that higher taxes are going to hurt the economy, that they're going to stifle growth, and that we should not be taxing wealthy people and big corporations because it's going to hurt our everything. And so I guess I want you to make the counterargument of why it is that if we were to tax the wealthiest, if we were to tax corporations, if we were to have a fair taxation system, that it would actually help all of us. It's actually in the interests of people like you and in my intro to to this whole thing, I talked about Warren Buffett, right? Bill Gates senior.

[00:14:44]>> Um they advocated for this because they understood it. But you tell us what your analysis is of that. The ideas, it's absurd. The idea that we should appease the rich.

[00:14:56]>> Yeah, >> that's really their argument is, oh, appeasement. If we're if the rich people get mad at us, they'll it's never really clear what they'll do.

[00:15:06]>> They kind of they kind of imply that rich people are going to go on strike from being rich.

[00:15:11]>> But I'll tell you, I can't. Even if I wanted to, even if I sold all my stocks, well, then I'd have money in the bank and the bank would lend it out and the people I bought the fir bought the stock from would have money. If I invest all my money in real estate, well, whoever I bought the real estate from would have the money and I'd be collecting rent on the real estate.

[00:15:32]>> No matter what I do, the money will still exist. It will still be in the economy, these assets. So the idea that we have to appease rich people or else they're going to like go on strike from being rich is just >> it's an absurd argument.

[00:15:49]>> You know, it reminds me of like the very beginning of The Apprentice. I was on TV that you know when you know the guy he walks up to these Final Cuts, oh these people are celebrities. They have to be treated specially.

[00:16:03]It's like so many Americans believe that rich people have to be treated specially in some way.

[00:16:10]>> Yeah.

[00:16:10]>> And it's just an absurd argument.

[00:16:14]>> And what about the neverending trickle down argument that we are always saying, look, you can see that it's failed. This has not gotten us anywhere.

[00:16:24]What do you want to add on that front?

[00:16:26]Just in terms of >> representation, >> money does not trickle down. I'll tell you, it trickles up.

[00:16:33]>> Yeah, that's right.

[00:16:33]>> Every time you pay your iPhone bill or you pay your mortgage payment, the money trickles up to people like me that own stock in the phone company and Apple and the banks and things like that. Money trickles up slowly but surely, penny by penny, dollar by dollar.

[00:16:52]>> That's what helps people like me get rich over time. and everyone else is just sending money in to all of these big companies.

[00:17:01]>> It doesn't it it trickles up, not down, believe me.

[00:17:03]>> And we've seen that, right, over the decades, right?

[00:17:06]>> I certainly have, and I think all of your constituents have, too, >> right?

[00:17:11]Um, so I started the podcast talking about the fact that this week Elon Musk is uh going to become the world's first trillionaire. Do you think anyone should be a trillionaire? Well, look, Elon Musk did not cause this problem.

[00:17:25]>> Yes, >> it existed long before him.

[00:17:28]>> He's done wonderful things. Electric cars are great. Being able to make phone calls from satellites are great.

[00:17:36]>> He's a great guy. He deserves to be really rich.

[00:17:39]>> I mean, he was really rich from the day he was born, but he deserves to be plenty rich. I'm not trying to demonize somebody like Elon Musk. I'm just suggesting that he given that he made roughly a trillion dollars in the course of his lifetime that he should pay the same tax rates on the money he made that all of your constituents pay on the money they make.

[00:18:02]>> All of these people that make money and in their paycheck and have tax deduct from their paycheck every single week.

[00:18:10]>> They pay taxes every week, >> right?

[00:18:13]>> He does not.

[00:18:15]>> Right? He may have he may be a trillionaire which implies he's made a trillion dollars over the course of his lifetime. He wasn't born a trillionaire.

[00:18:23]>> Yes.

[00:18:24]>> But he never paid tax income tax on a trillion dollars. He never had income of a trillion dollars.

[00:18:31]>> He owns companies that are worth a trillion dollars and he can spend the trillion dollars. He spent, you know, many billions of it buying Twitter a couple years back >> and he's investing a [clears throat] lot of it in all kinds of different things, including >> operating his own political operation, >> which that's what's causing the problem.

[00:18:51]It's not that he's being rich. I'm in favor of people being rich. I run a group called Patriotic Millionaires.

[00:18:56]>> I recommend everyone become a millionaire. It's great.

[00:19:00]>> And you don't think there's an upper limit?

[00:19:02]>> I mean, no. I mean, do you think a society that, you know, is fair would create trillionaires? If it was really fair, would would that happen?

[00:19:11]>> I mean, I think obviously it's not fair.

[00:19:13]>> Yeah.

[00:19:14]>> I think what the problem is that the people who do have a lot of money, including Mr. Musk, >> are using some of their money, not very much. Yeah.

[00:19:22]>> As as a fraction of their money, but many hundreds of millions of dollars >> to influence our elections, right?

[00:19:28]>> To change the rules so they become even richer.

[00:19:31]>> Right.

[00:19:32]That's the problem is this cycle of making money, using your money to take over politics, >> using your political power to change what Congress is doing, which you've seen with your own eyes just as you were voting just an hour ago.

[00:19:48]>> Yeah.

[00:19:49]>> And then when the rules are different, using the new rules to make yourself even richer.

[00:19:57]>> That's not something most people can do, but it is something the rich people can do. And that's part of why we want to reform the tax system >> in order to reduce this gross inequality that gives people like Mr. Musk so much more political power than practically anyone else in the United States.

[00:20:16]>> Well, it's really the perfect segue into my next question. I was going to quote a uh a New York Times report um that just came out last month. So, you know, I talked in my intro about the Supreme Court's dangerous decision on Citizens United and then combine that with the concentration of wealth amongst a very few people. The New York Times reported last month that in 2024, just 300 billionaires and their immediate family members made 19% of all reported federal contributions, campaign contributions, and even more if you look at local elections. And it's worth noting that just five presidential elections ago before the Supreme Court's decision on Citizens United, the share of billionaire spending was almost zero.

[00:21:07]It was 0.3% to be precise. Now Bernie Sanders talks about this as the oligarchy, right? This is the simple idea that a very few people elites control uh control um government control power and I guess I wanted to ask you to say more about this relationship between concentration of wealth and what's happened in this country around concentration of wealth and now this really dangerous trend that we have that billionaires are investing in elections buying seats buying the members of Congress who then go and vote for those billionaires instead of for the constituents that they're supposed to represent.

[00:21:50]>> Well, it's sadly this senior center of Vermont is correct.

[00:21:55]>> Yeah, >> we do live in an oligarchy. Yeah, >> we do live in a country where some people have so much more political power than others. And you know, you've seen it. I've seen it. You know, I go to the uh DC C meetings and >> you know, I raise my hand to ask a question and the leader stands up and says, "Oh, Morris, I want to thank you for all of your judgment and wisdom and whatnot." And after a while, you start to believe that you really do have more judgment and wisdom than other people.

[00:22:27]>> And yes, I have more money than a lot of people, >> right?

[00:22:29]>> But I don't really have more judgment and wisdom than everyone else does.

[00:22:33]>> Profound. Yeah.

[00:22:35]But it's hard to keep that in mind. Even the best of people, >> you know, after a while when you're constantly being called by congressmen and senators and >> asked what you think about this and that and what are your concerns and whatnot, >> you start to believe that you really do know what's going on.

[00:22:59]>> Yeah.

[00:23:00]>> And so do some of the senators and representatives. You know, I had a meeting in my office with a a United States senator and I said, "Isn't it a problem that you're running a campaign and you're here in New York City, not even in your state, sitting in my office talking, asking me for my opinion, not even your constituent >> constituents?"

[00:23:23]>> And well, the person did acknowledge that I was correct that it is a problem.

[00:23:27]And I think everyone agrees that it's a problem, but I haven't really seen a solution yet. I mean, we've been advocating things.

[00:23:36]>> You in New York, we have a campaign finance system where, >> you know, we have small dollar donations that are matched and there's things that are >> that's what we have in Seattle as well for our local elections. It makes a big difference and it sort of levels the playing field. But now we've got these independent expenditures that are coming in and of course those are not those are not controlled. So, you've taken all of this, I mean, it's I got to tell you, it is unusual to hear a wealthy person say, "I shouldn't be seen as wiser or, you know, listened to more than a constituent." That's not typical. And I'm really grateful to you for that. And it makes me think of Bill Gates senior because we were advocating for a change in Washington state tax law more than a decade ago. He was on the front lines of that.

[00:24:23]>> Sure. And um we were actually on a panel together >> uh you know basically debating the other side and it was really fantastic and it's the kind of thing that I wish more wealthy people would do. You've you chair patriotic the board of patriotic millionaires. Yes ma'am.

[00:24:44]>> And that is exactly that right. It's a group of wealthy individuals who want to see changes to our tax system and are willing to get out and say, "Tax me more."

[00:24:55]>> Yes. Yes. I mean, it's not that I like paying taxes. Yeah.

[00:24:59]>> I mean, believe me, I don't like paying taxes any more than anybody else does.

[00:25:03]>> But I also I you know, I don't like paying my monthly fee for living in my apartment.

[00:25:07]>> I don't like paying the dues for my club, but I like living in a fancy apartment on Park Avenue. I like being a member of a nice club. Yeah, >> I pay for those things. I like living in New York City.

[00:25:18]>> Yeah.

[00:25:19]>> And to live in New York City, for me to be happy, I need all these things it provides.

[00:25:26]>> You know, it has school teachers that teach in my granddaughter's school.

[00:25:30]>> It has hospitals and with nurses and doctors that take care of us when we're sick.

[00:25:36]>> It has bus drivers who drive the buses.

[00:25:39]And it has the ability for people to live there and raise their families. I need to live in a city not just where I can raise my family, >> but where the doormen and the teachers and the nurses and the waiters can have children too and be able to afford to send their children to have child care and schools and all the other things you need to raise a family. And if they can't do that, then they can't live in the city. And then if they can't live there, then we won't have those services and we won't have those people.

[00:26:15]>> The thing that makes New York New York and the same thing in your cities too in the west >> is that we have all these people who want to live there and because the cities provide all these services and that's why we need the tax revenue.

[00:26:32]It's I mean it's really the way that I always think about this is the common good, right? There there is a common good that we all are part of and should be contributing to. It's not enough just for you to live in your Park Avenue apartment and be incredibly wealthy. You need the people that are around you servicing that building, working in the businesses around you, all of those things to also be able to have a good life. And if your fair share of taxes can help to provide that, that's really what we're about. Um, I know you have three kind of major areas that Patriotic Millionaires uh kind of works in. Do you want to talk about those?

[00:27:15]>> Well, sure. We're in favor of making the tax system more progressive. We think that people who make more money should pay a higher tax rate on the money they make. However they make money, whether it's through a job or just from being rich and getting investment income, we think they should pay a higher tax rate than the people who have to work for a living and have tax ded.

[00:27:38]>> We're in favor of higher wages. We've supported bills to raise the minimum wage over the whole >> Thank you for that.

[00:27:44]>> We've been working on that. And the third part is spread the power. We believe that everyone should have equal political power. That it's not appropriate that someone like me and other rich donors, I'm sure you've met some of them.

[00:28:00]>> Yeah.

[00:28:01]>> Have so much more access >> Yeah.

[00:28:04]>> to our political leaders than most people do.

[00:28:07]>> And we have to change. I mean, I I really like to change that. I really >> don't think that's right.

[00:28:14]>> Yeah. We talk a lot about I run something called resistance labs and in those we train people um on how to stand up for themselves, how to stand up to authoritarians. But one of the things we always try to remind people of is we have this impression that power flows from the top down. And actually it flows from the bottom up. We have to help people claim that power and create the situation that allows them to do that.

[00:28:38]And I think Patriotic Millionaires is is is really part of that. This podcast is called the power you have and it's because I'm an organizer and I've always believed that you you change the greater system by organizing and I'm doing that on the inside here in Congress. I was an organizer on the outside. We're working together with patriotic millionaires and other coalitions >> um to achieve the things we're trying to achieve. But I always have the same question for my guest at the end, which is um what do you say to people who are listening to this podcast now about the best way for them to use their power and achieve the kinds of things that Patriotic Millionaires is is trying to achieve?

[00:29:23]>> Well, as of now, we still live in a democracy. We still count votes. And yes, I can show up at a fundraiser with a few thousand dollars and that's great.

[00:29:35]And I can shake hands with, you know, pretty much anyone I want to shake hands with, >> but the person who can show up with a hundred people or a thousand people behind them and get them registered to vote and show up on election day and check off their ballots, they have more power. That's really where the power is.

[00:29:56]you know, my money can buy TV advertising or something and I guess they at least think the TV advertising convinces people to vote.

[00:30:04]>> Yeah.

[00:30:04]>> But actually voting, that's where the real power is.

[00:30:09]>> I'm just doing this indirectly.

[00:30:11]So, I would advise people to organize your neighbors, to make sure everyone is registered to vote, to make sure everyone actually does vote, and elect people who will do what you think should be done, to do what you think is best for your country.

[00:30:28]>> I love that, and it's a great message to everyone out there. We've got so many amazing bills on uh making the tax system fairer, on raising the minimum wage. Um, those are all bills that I've been proud to lead or co-lead and it's a real opportunity to make sure you're using your voice to stand up for the kind of people who are going to stand up for those.

[00:30:50]>> Morris Pearl, thank you so much for all the work you do and for using your wealth and your voice to fight for other people to have their voice. We really appreciate you.

[00:31:00]>> Thank you, Representative J.

[00:31:01]>> Thank you.

[00:31:03]>> And that is a wrap for this week's episode. Thank you so much for listening. And if you haven't already, be sure to check out the full video recordings of all my conversations on my YouTube channel at Rep Gyipol and subscribe to our show wherever you get your podcast. Until next time, keep resisting, stay engaged, and remember to use the power you [music] have.