America is falling out of love with billionaires, and it’s about time
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 tax on 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.
The love of money as a possession ... [is] a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities.
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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 flightinclude 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 CONTINUE READING: America is falling out of love with billionaires, and it’s about time - Los Angeles Times
