Why are billionaires against a wealth tax? Do they really need all that money?
Elizabeth Warren unveils wealth tax calculator for ‘confused’ billionaires is reported by Yahoo Finance.
Presidential candidate Elizabeth Warren (D-MA) hasn’t been shy about her desire to impose a tax on the wealthy.
The Massachusetts senator exchanged Tweets with billionaire Microsoft (MSFT) co-founder Bill Gates after he spoke out against her wealth tax. Now Warren has revealed just how much he would pay under her wealth tax plan — and how much other well-known, high-wealth figures would pay as well.
Her website created a Calculator for the Billionaires and features sections for various figures at the top of the income bracket, including Amazon (AMZN) CEO Jeff Bezos, Facebook (FB) CEO Mark Zuckerberg, Gates, JPMorgan Chase (JPM) CEO Jamie Dimon, and even Education Secretary Betsy DeVos’ family. Individuals who identify as billionaires can also enter in their respective incomes to find out how much they’d pay.
The Warren wealth tax plan would impose an annual tax of 2% on every dollar a household has above $50 million, which increases to 6% for households with more than $1 billion. Under this plan, Gates, who has a net worth of approximately $107 billion, would pay $6.4 billion in taxes.
OK, let’s pause for a moment. Suppose that you have just passed the $1 billion mark and thus you too are subject to the wealth tax - as above, 6%. Your tax would be $6 million. That leaves you with $94 million. What can you do with that much wealth? Suppose that you want to buy an electric car, a Tesla. I googled the prices on the Tesla and determined that a middle range price for a Tesla would be about $56,990. How many of those vehicles could you buy? The answer is 1,649. After your first, what would you do with the other 1,648 Teslas?
You might object to the annual taxation.
“Don’t worry too much about Bill Gates,” Warren’s website stated. “If history is any guide, if billionaires do nothing other than invest their wealth in the stock market, it’s likely that their wealth will continue to grow.”
And although Amazon paid $0 in federal taxes last year, its CEO, Jeff Bezos would have to pay $6.7 billion under this plan.
Meanwhile, Dimon, another vocal critic of Warren’s wealth tax, would pay $55 million based on his net worth of $1.6 billion. Betsy DeVos’s family would be taxed a whopping $283 million for their collective net worth of $5.4 billion.
Warren has repeatedly emphasized that the revenue generated from her wealth tax would go towards programs she hopes to fund, like Medicare for All and expanded Social Security. The idea has garnered the support of other politicians, like Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY).
Experts project that Warren’s wealth tax would generate $2.75 trillion in revenue over a 10-year period.
There appears to be growing support for a wealth tax from the public — a Politico/Morning Consult poll from earlier this year indicated that 76% of registered voters believe wealthy Americans should pay more taxes. Additionally, a Fox News survey revealed that 70% of Americans, including 54% of Republicans, are in support of raising taxes on those who earn more than $10 million.
… many billionaires have come out against Warren’s plan, including Dimon, Gates, Mark Cuban, and Leon Cooperman.
[but] One notable billionaire — Warren Buffett — has voiced support for a sort of wealth tax in the past.
“My friends and I have been coddled long enough by a billionaire-friendly Congress,” he wrote in a 2011 op-ed for the New York Times. “It’s time for our government to get serious about shared sacrifice.”
Obviously, my example of 1,648 Teslas is nuts. No one is going to buy that many automobiles. But they just may use that money to buy something even more valuable - political power.
Norman Solomon, writes in the Reader Supported News about The Crass Warfare of Billionaires Against Sanders and Warren.
When Elizabeth Warren stands on a debate stage and argues for a targeted marginal tax on the astronomically rich, such advocacy is anathema to those who believe that the only legitimate class war is the kind waged from the top down. In early autumn, CNBC reported that “Democratic donors on Wall Street and in big business are preparing to sit out the presidential campaign fundraising cycle — or even back President Donald Trump — if Sen. Elizabeth Warren wins the party’s nomination.”
As for Bernie Sanders — less than four years after he carried every county in West Virginia against Hillary Clinton in the presidential primary — the state’s Democratic senator Joe Manchin flatly declared last week that if Sanders wins the nomination, he will not vote for his party’s nominee against Trump in November 2020.
Some billionaires support Trump and some don’t. But few billionaires have a good word to say about Sanders or Warren. And the pattern of billionaires backing their Democratic rivals is illuminating.
“Dozens of American billionaires have pulled out their checkbooks to support candidates engaged in a wide-open battle for the Democratic presidential nomination,” Forbes reported this summer. The dollar total of those donations given directly to a campaign (which federal law limits to $2,800 each) is less significant than the sentiment they reflect. And people with huge wealth are able to dump hundreds of thousands or even millions of dollars at once into a Super PAC, which grassroots-parched AstroTurf candidate Joe Biden greenlighted last month.
The donations from billionaires to the current Democratic candidates could be viewed as a kind of Oligarchy Confidence Index, based on data from the Federal Election Commission. As reported by Forbes, Pete Buttigieg leads all the candidates with 23 billionaire donors, followed by 18 for Cory Booker, and 17 for Kamala Harris. Among the other candidates who have qualified for the debate coming up later this month, Biden has 13 billionaire donors and Amy Klobuchar has 8, followed by 3 for Elizabeth Warren, 1 for Tulsi Gabbard, and 1 for Andrew Yang. Meanwhile, Bernie Sanders has zero billionaire donors.
And that, I think, is the source of the billionaires being so far out against Warren’s wealth tax. It’s not the money they would lose - it’s about the political power that their money buys.