A Wealth Tax

Imagine: you are in financial hot water; your credit card debt is out of control.  “I need to speak with a Financial Planner.”  If he is a Republican, his advice will be, “Buy less stuff.”  If she is a Democrat, her advice will be, “Don't hesitate to buy what you really need.”  Good advice, both.  And maybe two sides of the same coin.

In national politics, Democrats love buying things, like COVID-19 Relief; Republicans don’t like to pay for it (through taxation).  The result: Budget Deficits that keep climbing year after year, a National Debt that keeps climbing year after year.

When Democrats are in power, they spend too much; when Republicans are in power, they cut taxes.  Voters love a tax cut, but it is the same thing as spending too much on government programs that the public wants or needs.

There is a way, however, for us to have our cake and eat it too.  What we need is good old-fashioned “fiscal responsibility.”  Fiscal responsibility means paying for what you buy.  Or not buying stuff you can't afford.  Fiscal responsibility used to be a Republican mantra; Republicans used to run on “fiscal responsibility.”  No longer.  We as a nation do want more than we are willing to pay for.  

A classic dilemma!  That is easily solved: by taxing the people who have the money (a Warren Buffett quote).

Jeff Bezos’s salary as CEO of Amazon.com is $81,840.  Elon Musk’s salary as CEO of Tesla is $0.  Mark Zuckerberg’s salary as CEO of Facebook is $1.00.  Warren Buffett’s salary as CEO of Berkshire Hathaway is $100,000.  The salary of Google founders Larry Page and Sergey Brin is $1.00.

BUT, Jeff Bezos is “worth” $194.9 billion.  Elon Musk is “worth” $184.3 billion.  Mark Zuckerberg is “worth” $100 billion.  Warren Buffett is “worth” $88.2 billion.  Larry Page is worth $89.4 billion, and Sergey Brin is worth $86.5 billion.

On average, their wealth/net worth is several million times their annual salary (if they declare any taxable income at all).

But the Federal Income Tax does not tax net worth – or wealth – it taxes income, wages, salaries.  Many gazillionaires declare a gross income of $0 or $1.   If YOU were sitting on a few billion dollars of net worth, would you need an “income” to get by?   Billionaires don’t need wages or salaries to live a royal lifestyle.  Billionaires for the most part pay little or no income tax.  As an example of an outlier billionaire who DID pay significant federal income taxes, Tim Cook, CEO of Apple, Inc., received $98.7 million for 2021, but only $12 million was taxable income.  Don't you wish that YOU could declare 12% of your annual income as taxable?  Still, he pays more than Musk and Bezos by millions of dollars.

They do, of course, pay federal taxes on their “capital gains.”   But the capital gains tax maxes out at 20%, which is the same tax rate as someone who earns just $40,000/year, barely middle class.  More often than not, they have no capital gains to declare.

You should know where I am headed with these introductory words: we need to find a way to tax the wealthiest Americans because year after year they get away with financial MURDER.  They pay less income taxes than you and me!  Is that OK with you?  Taxing their wealth would create Surpluses, not Deficits.

Please note that a decrease in the value of any billionaire’s stock portfolio – by taxation or otherwise – will have NO impact on his own company’s employment of wage earners.  Taxing Jeff Bezos’ personal wealth will not cause Amazon to lay off anybody.  Taxing Elon Musk's personal wealth will not cause Tesla to lay off anybody.

Elizabeth Warren first proposed a “Wealth Tax” in January of 2019.   I first proposed a Wealth Tax in September of 2015.

Warren’s Wealth Tax would impact only those Americans with a net worth of $50 million or more.  Their wealth would be taxed at 2% for wealth above $50 million and 3% (or 6% to pay for Medicare for All) on wealth above $1 billion.  There are about 75,000 to 97,000 American households with a net worth above $50 million, one in 1,200 Americans would be subject to this extra tax.  Do you know anyone in this tax bracket?

Not only will Warren’s Wealth Tax never get through Congress, but she aims too low (and it will only collect $2.75 trillion in ten years).  We should impose this millionaire tax surtax on Americans worth $10 million or more.  “Around 1,456,336 households in America have $10 million or more in net worth.  That's 1.13% of American households.”  Do YOU know anyone whose fortune exceeds $10 million?  We should begin with a 1% surtax on wealth above $10 million and assess a graduated tax all the way up to 7% on wealth above $1 billion.  No billionaire so taxed will be harmed by this tax, as the net worth of all of them will always increase by a multiple of how much this surtax will cost them.

Assessed properly, this surtax will end annual deficits and increases to the National Debt.

As long as these uber-wealthy bozos retain their power over OUR representatives, nothing will ever be done.  Unless YOU, dear reader, become a PITA on YOUR senators and your House member.  Which, by the way, is the job of a true citizen, to tell your elected representatives what to do!

Go to it!