Michael Hiltzik, columnist for the Los Angeles Times, writes that America is tiring of its selfish, greedy billionaires.
The billionaires are upset that Alexandra Ocasio-Cortez-Cortez wants to raise taxes on incomes over $10 million a year and that Elizabeth Warren is proposing a wealth tax for the fabulously wealthy. How terrifying!
Bit Anericans are not frightened by these proposals. Billionaires are.
https://www.latimes.com/business/hiltzik/la-fi-hiltzik-billionaires-20190201-story.html
What do you think about a man who spent $100 million on a 305-foot yacht, who already owns a 220-foot yacht? That’s Daniel Snyder, owner of the NFL Redskins.
”At the same moment, hedge fund owner Ken Griffin was disclosed as the buyer of the most expensive home in America, a $238-million Manhattan penthouse. According to Bloomberg, he already owns two floors of the Waldorf Astoria hotel in Chicago ($30 million), a Miami Beach penthouse ($60 million), another Chicago penthouse ($58.75 million) and another apartment in Manhattan ($40 million).”
How many homes does one man need?
Hiltzik writes:
Our emerging political debate over taxing the rich seems to be getting bogged down in details — how high a tax rate, should we tax income or wealth, etc., etc. But this fixation on nuts and bolts is obscuring what may be the most important aspect of the discussion: America is becoming fed up with its billionaires.
That sentiment is long overdue. It has begun to surface in the suggestion by Rep. Alexandria Ocasio-Cortez that the top marginal rate on high incomes shift back to what it was in the 1950s or 1960s, and in Sen. Elizabeth Warren’s proposal for a wealth taxon those with high net worth.
Since the Reagan administration, the political establishment has strived to convince Americans that extreme wealth in the hands of a small number of plutocrats is good for everyone. We’ve had the “trickle-down” theory, the rechristening of the wealthy as “job creators” and their categorization invariably as “self-made.” We’ve been told, via the simplistic Laffer Curve, that if you raise the tax rate you get less revenue.
There are three main subtexts of these arguments, all of which show up in the email in-box whenever I write about wealth and taxation. First: The extreme wealth of the few creates wealth all along the income scale, for the masses. Second: It’s immoral — confiscatory — to soak the rich via taxation, at least above a certain level that never seems to be precisely defined. And third: If we torment the wealthy with taxes, they’ll pack up their wealth and leave us, whether for some more accommodating nation on Earth or some Ayn Randian paradise.
Experience has shown us that the first argument is simply untrue — extreme wealth begets only more inequality. The second argument begs the question of where reasonable taxation turns into confiscation, although the level of taxation of high incomes today is nowhere near as high as it was in the 1940s, 1950s and 1960s, when economic gains were shared much more equally with the working class. As for the third, Warren’s answers to capital flight include stepping up IRS enforcement resources, which have been eviscerated by political agents of the wealthy, and imposing an “exit tax” on any plutocrat renouncing his or her U.S. citizenship to evade U.S. taxes.
Why are billionaires beginning to be treated so skeptically?
One reason surely is the evidence that extreme wealth has a corrosive effect on the economy. Wealth inequality places immense resources in the hands of people unable to spend it productively, and keeps it out of the hands of those who would put it to use instantly, whether on staples or creature comforts that should be within the reach of everyone living in the richest country on earth.
Multimillionaires and billionaires love to describe themselves as “self-made,” but the truth is that every fortune is the product of other people’s labor — the minimum-wage workers overseas who assemble Michael Dell’s computers or the low-wage baristas in Howard Schultz’s Starbuck stores, or the taxpayers who fund the roads, bridges and airports that help keep their businesses profitable….
The issue of how many billions are too many billions has been placed in high relief by the presidential campaign of Schultz, the ultimate billionaire vanity project. Schultz condemns calls for higher marginal tax rates on the wealthy and, typically for his species, portrays himself as a man who has gotten where he is today by taking advantage of America as the land of opportunity — so what’s keeping you layabouts from doing the same. But he also mentions, in passing, that he grew up in federally subsidized housing in New York. So someone, somehow, gave him a leg up using tax revenue.
It’s proper to question why people like Schultz and Dell feel so strongly about a marginally higher tax on their marginal income.
People like Schultz “live what is, for almost all practical purposes, a post-scarcity existence,” Paul Campos observes aptly at the Lawyers, Guns & Money blog. “If you have three billion dollars, then you can buy almost anything without even bothering to consider what it costs, since what it costs is, to you, practically indistinguishable from ‘nothing.’ Given that everything is for you already basically free, why would you even care if your tax bill goes up? Especially given that you live in a society in which, despite what is by a historical standards an almost inconceivable amount of total social wealth, lots of people still have to worry about getting enough to eat, not freezing to death in the next polar vortex, etc?”

My newspaper column from yesterday adds a “myth about rich people” dimension to this topic. Click through if you wish.
https://www.vnews.com/Column-Progressive-taxation-and-a-just-society-23164270?fbclid=IwAR1SkBvAimv_42N7id953AwoHV3VM0xp3wodZ7RwoS44LeXGwHQteHUoOUw
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“Wealthy people claim to do more “good” through philanthropy than would be accomplished by government programs funded by their tax dollars. Also false.”
Nice article, Steve. The above quote from your article reminds me of a writing that was a part of the CommonCore and PARCC as it was presented to us years ago. A selection from a essay by Andrew Carnegie which basically made the above claim was analyzed as a part of that curriculum.
I was also interested in the idea that hedge fund people do not make anything. If this is so, at what point do we build a society like Bedford Falls instead of Potterville? There must be some purpose in banking that moves money through the economy in order to make things work better.
I liked this article, for it made me think. Thanks.
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Here’s the money quote, says it all:
“During the past four or five decades, producing things has dropped from 25 percent of economic activity to about 10 percent and profiting from transactions (finance, insurance and real estate) has increased from about 10 percent to about 25 percent.”
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tax the basterds
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And the corporations. In the 1980s, corporations paid 30 percent of federal taxes. Now, that’s less than 10 percent. US corporations have over two trillion dollars offshore to avoid paying taxes on it, and the recent tax holiday for repatriation by the Trump administration resulted in very little repatriation of those funds.
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And it was in these circumstances that Trump and the Repugnicans just made permanent very large tax breaks for the wealthy and for corporations. The weekend after those tax breaks passed, Trump had dinner at Mar-a-lago, where he told his friends around the table, “I just gave you a really big Christmas present.”
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According to a new report from Oxfam, 26 people worldwide now control more wealth than the bottom half (3.85 million people) do.
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Correction:
26 individuals have more wealth than the bottom 3 Billion people
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Here’s where I got that figure. I haven’t the underlying report. https://www.theguardian.com/business/2019/jan/21/world-26-richest-people-own-as-much-as-poorest-50-per-cent-oxfam-report
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Oh, I see. I accidentally wrote “million’! Thanks for the correction!
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I think Trump and his band of billionaire deplorables have helped Americans see the all consuming, rapacious greed of the uber wealthy. Many Americans now understand that they are not just hard working, fortunate people. They are manipulative, scheming selfish elitists that stand on the necks of hard working Americans. They often suppress democracy for others and create laws that benefit only the wealthy class. Trump’s tax scheme was the tipping point for many people.
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Canadian auto workers ran an ad against GM during the Super Bowl broadcast in Canada. The ad said the generosity of Canadians toward GM cost each Canadian $300 and, they were repaid with the expansion of GM factories in Mexico and a loss of GM jobs in Canada. The ad called GM greedy. (TPM)
I’m curious if U.S. media will report about the ad.
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State and local taxes primarily pay for public schools, roads, parks,… The rich are taking advantage of working people via both federal and state taxes. In addition to states like
Washington (Bill Gates’ residence) which has no income tax and the poor pay a regressive tax rate as high as 7 times that of families like the Gates, there are states like Ohio.
Ohio’s crafty tax plan benefits members of the state’s legislature. The tax plan results in business owners paying no state tax on incomes of less than $250,000 and, reduced rates above that income level. As illustration, a guy ran a business, like an auto body shop, nursing or funeral home, then retired. He kept the same low-paid employees working after he stopped going in or, perhaps his son inherited the business after the Dad died. The son keeps the same staff. The owner continues to draw out money from the business. Meanwhile, the rest of the states’ residents who are employed or who are retired, are taxed and pay for the states’ roads that the business owner uses, and the public schools and universities that his kids/ grandkids attend.
In 2015, before the scheme ratcheted up as it is now, the state lost Ohio $1.1 billion in tax revenue.
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Washington State has no personal income tax and no corporate tax.
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The present Democratic legislature in Washington state is doing their very best to raise billions of dollars on our citizens heads now , in spite of a good state economy. They are trying to say that a capitol gains tax is not an income tax (contrary to the IRS). An income tax is not allowed in our state constitution. The automobile and related items are the cash cow up here. Our governor, who has his eyes on the White House is ranked as the
worst governor in the union. The grass is not always greener…even in the Evergreen State!
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Capital gains are unearned. Why should they not be taxed? Why should someone working three jobs to put food on the table pay a higher tax rate than rich people who have money to sock away?
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Capital gains should be taxed at the same or higher rates than salaries are. The argument that reduced taxes on capital gains spur investment is absurd. A capital gain is realized when an asset is sold. Businesses invest when there is demand. Concentrated wealth has strangled economic growth by denying workers income to spend.
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Loved this article. Hilt Zico writes from both sides of the fence normally, so this one is a welcome progressive stand. It’s funny how oligarchic billionaires say, “I don’t trust governments to do what my ‘philanthropic’ foundation does [what I choose to do if I feel like it].” That’s their answer to the public losing trust in the oligarchs? Seriously?! It’s like saying, “I don’t trust bread, so let them eat cake.” Wait, it’s not funny; it’s perplexing. Do the wealthy elite not see the writing on the wall? They are going down — down a notch by paying taxes or all the way down in a political revolution — taxes or guillotines, their choice.
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Hiltzic not Hilt Zico. Autocorrect stealthily strikes again, dagnabbit!
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And this is the same artificial “intelligence” [sic] that the edtech purveyors think can “teach” our children!
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Dienne, 😀
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The debate we aren’t having is “how much is enough?”
How much is enough for setting income tax brackets?
How much is enough for setting the maximum taxable limit for social security?
How much is enough for business tax breaks at all levels?
How much is enough for the privatization of public services?
How much is enough for regulation?
How much is enough to ensure our safety at all levels (i.e. national defense spending? local police and fire departments? hardening of schools?)
It seems that billionaires can never have enough money and, therefore, to accumulate more and more they can never have low enough taxes. The billionaires have done an admirable job of promoting the idea that ALL taxes are confiscatory, that private businesses can operate more efficiently than government, and that big-hearted philanthropists can move more quickly to solve problems than democratically elected officials and the administrators they hire. Therefore, they have been able to persuade voters that privatization and philanthropy are the answers to the problems facing our country.
As the man elected to the POTUS indicates, the billionaires have done an excellent marketing job. And more importantly, as the appointees to courts over the past GOP administrations indicate, the “long game” of the billionaires is working.
Welcome to the plutocracy.
Maybe we can change our course in 2020. https://wp.me/p25b7q-2nu
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