Sam Pizzigati: The best case yet for raising taxes on billionaires
“Spirit of Ecstasy,” the bonnet ornament sculpture on Rolls-Royce cars, for which there were record sales last year.
— Photo by Jed
Via OtherWords. org
BOSTON
Sometimes the daily news about our billionaires just doesn’t make sense.
Last year, for instance, ended with a torrent of news stories about how poorly the world’s billionaires fared in 2022. Bloomberg tagged the 12 months that had just gone past “a year to forget,” with almost $1.5 trillion “wiped from the fortunes of the richest 500 alone.”
All global billionaires taken together, Forbes chimed in, lost $1.9 trillion in 2022. Some 148 of the world’s 2,671 billionaires even lost their billionaire status.
The year’s biggest billionaire losers? Some of America’s deepest pockets.
Larry Page saw his Google-driven fortune drop $40 billion. Mark Zuckerberg watched $78 billion evaporate off the wealth Facebook created for him. And Amazon’s Jeff Bezos had to swallow a minus $80 billion.
But honors for the biggest nosedive of all have to go to Elon Musk. The world’s richest man at the start of 2022, Musk ended the year losing both his top slot and some $115 billion from his personal fortune.
So did all these losses have our billionaires shaking in their boots? Did they start tightening their belts a bit in 2022? Spend less on the world’s most fabulously expensive luxuries?
Not exactly. In fact, not all.
The world’s most celebrated purveyors of pure extravagance actually registered record years in 2022. Rolls-Royce had its best-ever annual sales total, selling a record 6,021 “motor cars,” up 8 percent over 2021.
“Our clients,” Rolls-Royce’s CEO crowed on New Year’s Day, “are now happy to pay around half a million Euros for their unique motor car,” a sum equal to about $540,000 in the United States, the company’s single largest market.
“Our order book stretches far into 2023 for all models,” the Rolls-Royce chief added. “We haven’t seen any slowdown in orders.”
Lamborghini had an even better 2022, with 9,233 vehicles sold — a 10-percent jump over last year. The company’s biggest market? The United States. Americans drove off Lamborghini lots with 2,771 new cars in 2022. The automaker’s most popular model runs about a quarter-million.
Realtors who cater to the ultra-rich set had an equally boffo year in 2022.
In a down real-estate market, the highest of high-end residences still pulled in mega sums at closing time. The year’s top 10 home sales in the United States, notes the luxury-oriented Robb Report, “totaled roughly $1.165 billion, proving that, impending recession or not, luxury real estate will always be traded.”
How can all this luxury be? How can the richest of the rich be spending fantastic sums in a year when they’re seeing fantastic falls in their personal net worths?
Simple. In the realms of the super rich, losing a billion — or even many billions — makes no difference whatsoever in real daily life. Net worth down a few billion? You can still afford anything your heart could possibly desire.
No one alive today needs fortunes worth dozens of billions to live astoundingly large. A mere billion would suffice. So, truth be told, would a mere tenth of a billion. In the day-to-day lives of billionaires, a few billions or so have no practical significance — except when it comes to increasing their political power at the expense of the rest of us.
Taxing those billions to support the common good, on the other hand, could make an immeasurable difference in the lives of millions — and our democracy.
We need more than a dip in grand concentrations of private wealth. We need a world without billionaires.
Sam Pizzigati, based in Boston, co-edits Inequality.org at the Institute for Policy Studies. His books include The Case for a Maximum Wage and The Rich Don’t Always Win.
Josh Hoxie: How the age of billionaires ends
Avarice (2012), by Jesus Solana
From OtherWords.org
Every month or so there’s a stunning new headline statistic about just how stark our economic divide has become.
Understanding that this divide exists is a good start. Appreciating that a deeply unfair and unequal economy is problematic is even better. Actually doing something about it — that’s the best.
As 2020 presidential hopefuls start trying to prove their progressive bona fides, serious policies to take on economic inequality are at the forefront. These ideas don’t stand much of a shot of becoming law in the Trump era, of course. But if the balance of power shifts, so too does the potential for these paradigm-shifting new programs.
Let’s take a closer look at the problems they’ll have to address.
A new billionaire is minted every two days, according to a recent Oxfam study. As a result, the top 0.1 percent owns a greater share of the nation’s wealth than the bottom 90 percent combined.
The richest dynastic families in the United States have seen their wealth expand at a dizzying pace. The three wealthiest families — the Waltons, the Kochs and the Mars — increased their wealth by nearly 6,000 percent since 1983.
In other words, the rich in the United States have accumulated a metric crap ton of money. And what are they doing with this immense wealth and power?
Dan Gilbert (#71 on the Forbes 400) just bought the world’s first mega-yacht, with an IMAX theater on it, for $100 million. Hedge-fund billionaire Kenneth Griffin (#45) just broke the record for the highest price ever paid for a house — $238 million — for an apartment in Manhattan’s “Billionaires’ Row.”
Add in a few private jets, a couple of absurd presidential runs, and those Trump tax cuts, and you get a pretty accurate depiction of the priorities of billionaire spending.
Meanwhile, the rest of the country isn’t shopping for yachts and jets. Most families are forced to work longer hours for lower wages.
Despite massive increases in GDP and productivity, the median family saw their wealth go down over the past three decades, not up. The proportion of families with zero or negative wealth (meaning they owe more than they own) jumped from 1 in 6 to 1 in 5.
Relatedly, our roads and bridges our crumbling and our public schools are desperately underfunded.
It doesn’t take an economist to tell you this isn’t sustainable. So what about those policies to do something about it?
Sen. Bernie Sanders has proposed a robust addition to the federal estate tax. Billionaires under his plan would pay a top rate of 77 percent on whatever they bequeath to their heirs over $1 billion. Far from a new idea, Sanders is merely proposing reinstating the top rate that was in place from 1941 to 1976.
Sen. Elizabeth Warren, not to be outdone, has proposed a direct tax on concentrated wealth targeting modern day wealth hoarders. Her plan would impose a progressive annual tax starting at 2 percent on assets over $50 million and rising to 3 percent on assets over $1 billion.
And at least one member of Congress who isn’t running for president, Rep. Alexandria Ocasio-Cortez, has gotten in on the action. She’s proposed raising the top marginal tax rate to 70 percent (only on income over $10 million, contrary to what you might hear on Fox News).
Three bold ideas to stem our skyrocketing economic inequality, three ways to tax the ultra-rich, three policies unlikely to become law given the current administration.
Yet these ideas are more than mere platitudes. Poll after poll shows big majorities of Americans ready to see the rich pay their fair share — and worried about the economic and political power consolidating in the upper echelons.
When the political moment arrives, we won’t have to wonder what’s coming.
Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies.