Fortune Magazine, WaPo: Won't Someone PLEASE Think Of The Billionaires?
Your heart just breaks for them.
Earlier this week, Bernie Sanders and Ro Khanna introduced a new bill that would make this country a much nicer place for everyone to live, at the expense of taxing billionaires 5 percent a year — an amount that, as billionaires, they could not possibly miss or even notice is gone.
Now, I think this is a pretty great idea. In fact, I think it should be more than that — both because we need it to fund our country and take care of our people, and because, at a certain point, all that is left to buy for these people is power that no individual person should have.
But over at Fortune magazine, they have a slightly different take, as you may be able to surmise from the headline “Bernie Sanders’ billionaire tax would soak about 900 people to fund $3,000 checks for the middle class.”
You know, they tried so hard — what with the “soak” and all — but it still does not quite tug at one’s heartstrings the way I imagine they intended. Largely because of the whole “$3000 check” thing.
It begins:
Imagine a small concert venue, maybe 900 people, give or take. That’s relatively the size of a small cruise ship, or the average public high school in the U.S. A group that size collectively holds more wealth than the bottom half of the country combined, because that’s roughly how many billionaires live in the U.S. But a new bill is asking the people in that hypothetical concert venue or high school to chip in, and to bankroll thousand-dollar checks to millions of middle-class Americans.
Not high schoolers, cruise ship passengers, and concert attendees! How are they supposed to afford … oh wait. Nope. We’re talking about billionaires. Who don’t go on cruises with strangers and probably don’t attend many concerts, ether … unless they are Taylor Swift, Rihanna, or Beyoncé. None of whom I imagine would publicly complain about a five percent tax on their wealth, because that would be super embarrassing.
Of course, just to be clear, it wouldn’t just be middle class Americans (if that term means anything anymore) “soaking” the billionaires, it would be everyone making $150,000 or less. So it would also include poor people. It also wouldn’t just be $3000 checks — it would fund the ACA subsidies that Republicans took away from people, so that people don’t have to spend half of their income on health insurance; it would cover home care for seniors and the disabled; it would help create more affordable housing and expand Medicare to cover dental, vision, and hearing for seniors; it would pay public school teachers a fair salary and ensure that American families are not spending more than 7 percent of their income on childcare.
Personally, I think getting to live in a more civilized society is a boon for everyone. We need these things much more than we need 900 billionaires.
Now, I just explained a few of these things Fortune complains about in these next couple blockquoted paragraphs, but I’m dropping them anyway because, as they say, Fortune’s math ain’t mathing:
Senator Bernie Sanders and Representative Ro Khanna introduced the “Make Billionaires Pay Their Fair Share Act” on Monday, a proposed 5% annual wealth tax on individuals with a net worth of $1 billion or more. Sanders estimates a total of 938 billionaires live in the U.S. and hold a collective $8.2 trillion.
That 8.2 trillion won’t only go into the government’s coffers. The proposed bill has some of that revenue going back into your pockets. In its first year, tax revenue would go toward a one-time $3,000 check for every person living in a lower- or middle-income household, or those earning $150,000 or less.
They’re not taking all $8.2 trillion dollars, because five percent of $8.2 trillion dollars is $410 billion, not $8.2 trillion.
And some more math!
Sanders’ press release cites an analysis from Emmanuel Saez and Gabriel Zucman, researchers University of California, Berkeley. Their report reveals the long-term impact of a 5% wealth tax on America’s 10 richest people, applying the 5% tax to their wealth for every year they’ve been ranked a billionaire. The math shows the wealth of billionaires would essentially halve every year.
The math does not show that. The math shows that their wealth would decrease by 5 percent every year, should they not make any additional money (which seems unlikely).
Tesla CEO Elon Musk, the country’s richest person at this moment, would see his fortune fall from about $745 billion to $363 billion if a 5% tax was applied to his wealth every year since he became a billionaire in 2012. Google co-founder Larry Page’s wealth would decline from $258 billion to $83 billion if the same tax had been applied each year since he reached billionaire status in 2004.
This, if anything, is an argument in favor of applying the tax retroactively.
Unsurprisingly, the editorial board of the Jeff Bezos-owned Washington Post, which is now fully in its Breitbart era, was even more critical of the bill, which they hilariously claim “would strangle America’s golden goose.”
Now, a golden goose would imply that the existence of these 900 or so billionaires somehow benefits the rest of us. Given that we need that money in order to do all of the things mentioned in the bill — like ensure that regular people can afford health care, child care, and homes, and take care of the elderly and the disabled — the goose is pyrite at best.
Sanders wants to confiscate 5 percent of all assets every year from America’s billionaires, with the goal of stealing half their fortunes. He estimates, unrealistically, that this could raise $4.4 trillion over 10 years to fund a wish list of progressive fantasies, including something akin to a universal basic income and more government-managed health care.
How deeply sad is it that “meeting the basic needs” of everyday Americans is a fantasy to these people? A fantasy! A fantasy would be if he promised us all our own legacy newspapers or social media sites to run into the ground, for funsies. A fantasy would be if he promised us all luxuries like Birkin bags or Louboutins or, I suppose now, cuts of beef other than the liver.
Even for billionaires, a 5 percent tax on every asset they own would virtually wipe out any gains they make in a normal year. No one that rich keeps all their money sitting around in a checking account. They own real estate and make long-term investments that might not pay out for years.
So Jeff Bezos might have to sell one of his many mansions, compounds or estates … so that regular American families can maybe have one normal-size home to live in? He and other billionaires might have to plan ahead and keep five percent of their wealth liquid so that they can pay their taxes? Is that really too much to ask?
In addition to being unconstitutional, a federal tax on unrealized gains would force people to sell illiquid assets every year. A lot of AI founders, for example, are billionaires on paper, but their shares are effectively worthless until their businesses deliver on their promises and go public.
The federal government struggles to administer the already complicated tax code; thousands of new bureaucrats would need to be hired to fight with tax lawyers over asset valuations for collections of wines, art, jewelry, and yachts. (America is currently home to roughly a thousand billionaires, including Post owner Jeff Bezos.)
So you’re saying it would create jobs and possibly totally fuck people starting AI companies?
Try again?
Outgoing California Gov. Gavin Newsom (D), who has a better shot than Khanna of being the party’s standard bearer in two years, opposes the wealth tax ballot initiative because he understands how much it would further hobble California’s competitiveness. Much of Silicon Valley could relocate to other states that would love to incubate the next unicorn.
Sanders and Khanna take as a given the capacity of American capitalism to deliver continuing prosperity, no matter how many anchors they weigh it down with. Yet economic history proves that future growth is never guaranteed.
Oh, and where are they going to go? Practically every other country on earth has higher taxes and better labor laws than we do and those that don’t? Well, they may not want to live there, should they prefer to maintain the lifestyle to which they have become accustomed. There is literally nowhere for these people to go, and, quite frankly I don’t know that anyone really cares if they do go. It’s not actually good for our economy (or capitalism, even!) to have such an incredibly out-of-whack income inequality situation. We are far better off having a wide variety of smaller companies than we are having giant conglomerates that own everything. Perhaps if these motherfuckers go, that will leave more opportunity and space for others to generate wealth. And perhaps, if they do realize they’ll be taxed at five percent once they hit a billion, they’ll pay their workers more in order to avoid that.
A recent survey found that 66 percent of renters believe they will never be able to afford to own a home.
That same survey found that “[m]ajorities of Americans say a new car (74%), a weeklong vacation (60%) and health care (56%) are ‘unaffordable’ for their households. About half say that going out to dinner is unaffordable (49%) and nearly as many say the same about groceries (45%) and home energy and utilities (45%).”
Nearly half of all Americans can’t afford utilities, the administration is recommending we eat chopped liver or have “a piece of chicken, a piece of broccoli, a corn tortilla and one other thing” for our supper, and the Washington Post editorial board thinks we are going to cry over people who have multiple mansions maybe having to sell one of those mansions? Really?
You know, the name Rockefeller is, to this day, associated with extreme wealth — but at his very richest, at the time of his death Nelson Rockefeller was worth $1 billion, which today would be about $28 billion to $30 billion. That’s a whole lot of money, but it wouldn’t come close to making him one of the 25 richest Americans today. That is absurd. The only reason anyone should be richer than Rockefeller is if we are measuring wealth exclusively in terms of how much time one spends on the sunny side of the street.
So tax the motherfuckers already.
PREVIOUSLY ON WONKETTE!
OT: Got the email today, and I am officially a college student again. Only 10 years after I would've graduated normally...but at least I'm finishing it. 77 of my credits transferred in, including all of my electives, so it's just history studies now.
I'll say it...
Dear Billionaires:
You didn't earn it. You sucked it out of the work of the disempowered working and middle class.
That is all.
/FFCS