I agree with your sentiment that we don't need billionaires and should tax their excess wealth. However, I am concerned with how this could actually be done well. I've yet to hear a good plan. No one seems to consider 2nd and 3rd order affects. You do in part with your concern about the threshold being lowered over time. Also, taxing wealth is very different from taxing income or purchases. As so much wealth is bound up in stocks and bonds, it changes daily in often arbitrary ways. I am concerned that everyday people with substantial retirement accounts they've spent their whole lives building may be (eventually) pulled into this in a way that damages them. But then, I also recognize (like you) that this may be my privilege talking. In any case, it is an idea worth considering and exploring how it might be implemented.
Those are all the specific qualms that bounce around my head, but then I go back to the fact that we're talking about BILLIONAIRES. It's difficult to even comprehend the scale of that wealth. If I was worth 10 million dollars, I would be so far beyond financial concerns that even that seems fantastical, but we're talking about having 100x more than that. Part of the present problem is that people with this much wealth use it to generate access to money that cannot be taxed as income because of the present set of rules. I think in the end, we don't really know what the 2nd and 3rd order effects might be until we get the 1st order in place. A society that puts wealth back in the hands of the people will be a very different place.
I also agree and that's one of my qualms generally with American Leftism today: there's very little attention paid to the *how* of ambitious proposals.
Now, in fairness, that's a situation that's not better on the political Right, which is serious since "Conservatives" are now actually Reactionaries, proposing radical changes rather than merely conserving the status quo. So, when Trump imposes a huge tax cut for the wealthy without seriously thinking about how that changes the fiscal situation in the United States, that's a major problem!
But Leftists are supposed to be better than that, right? So, let's say that the policy goal is to "get rid of billionaires." Most people would say that we just need to change the tax code. But billionaires aren't making most of their money from income, actually. In fact, the "money" doesn't really exist in the way that mere drones like us imagine. It's unrealized captial gains or equity in businesses or other such fancy-sounding forms of wealth or passive income. So, then, shall we tax wealth? Not so fast! That's been tried and abandoned many times because the devil is really in the details there: do you tax those unrealized capital gains? How do you decide what's taxable? And how do you actually assess the value?
It's already complicated enough with a store of wealth like a house, which must be assessed for the more familiar property tax. House values have been going vertical in the last few years, but you can still get away with a once-a-year assessment that's still not quite accurate and still will piss off the homeowner. And you also find cases where you accomplish something unintended: impoverishing the house-rich; cash-poor grandma, for example. Nobody wanted grandma to have to sell her home in order to pay the tax bill, right!?
You run into a myriad of such issues when you try to actually apply a wealth tax. Norway has such a tax and you could explain it as simple-as-can-be: "The total value of a person's worldwide net wealth above NOK 1.7 million (approx $170,000) is taxed at 1%." But dig deeper and you see the problem areas. Notice the word "worldwide?" That's put in there because rich people notoriously hide their money offshore in places like the Cayman Islands. So how does the Norwegian Tax Authority track that down? Well... they don't. It's based on the honor system, essentially. A lot of rich Norwegians just avoid paying this tax entirely with "creative accounting," while middle class people can't afford to avoid it. And what about "net wealth?" How is that calculated? Most houses in Norway, like in the United States, are worth way more than that $170K threshold--do they count? Are they double-taxed, when the homeowner already pays property tax? How about the plurality of Norwegians who have a simple little summerhouse cabin in the mountains somewhere? They have to pay additional property tax on that second home already, so are they to be then triple-taxed? And what about pensions? In Norway, contributory pensions are significant, subsidized by both the state and employers. Obviously, a lifelong worker reaching retirement is likely going to have a pot saved that clears that wealth threshold. So is that subject to 1% taxation on top of any capital gains and deferred income taxes they will pay on it? You can see that this wealth tax begins to ensnare a lot of regular people who aren't billionaires. Which isn't necessarily a bad thing: the Nordic Model is kind of "everyone pays; everyone benefits" and I personally am all for it. But people just need to understand that a wealth tax is difficult to model and enforce and that it is very likely going to impact regular people, too.
It's easy to reach for simple solutions like "cut taxes" or "tax the rich," but the reality of implementation isn't that simple and the details matter when they can completely undermine the stated policy outcome.
I can't imagine a billionaire ban having any effect other than billionaires finding creative ways to hide the money that takes them over the billionaire line.
Outside of practical considerations (how would you get all of the countries of the world to coordinate on the confiscation of wealth?), I've never heard a good reason not to abolish billionaires. It's one of those dead-simple ideas that is a) obviously the correct thing to do and b) unthinkable given the way we've constructed our society.
Aphorisms which come to mind about getting rid of the billionaires: Be careful what you wish for; No good deed goes unpunished. When I read articles about billionaires or even $100,000 millionaires, I will consider how I would live with the much money. My conclusion is that I cannot conceive of a life like that. Maybe I would be like the billionaires of old and donate the money to serve the general good, including the arts, but maybe that air is too rarified to see beyond itself.
Your comments about tenured faculty resonated more with my life, as my son teaches at the Citadel, in your part of the world, and has for 5 years now. He had been an adjunct, a step below slave labor, and has scrambled to get full time teaching hours allowing him a living wage. There is a tenured position open, but he does not publish, although he is a spectacular instructor (spoken as only a mom could speak) but knowing his chances, he has not applied. He is, like yourself looking to pivot.
As other commenters have noted, a billionaire ban would be difficult to enforce because we have allowed money to completely warp our politics for too long. As Nolan already addressed in his piece, that doesn't mean it's not worth doing, just that we'll have to keep blocking the backroom deals and financial magic they attempt
John, I'm 100% on board. The sad reality of academic employment, even as it was many years ago, steered me away from what looked like a life I was made for (sigh). The even sadder reality of how extreme wealth warps politics is a good part of Autocracy, Inc., by Anne Applebaum. Readers of the Larson book you cite may find it interesting or terrifying, or both.
What a brilliant idea. I am becoming increasingly concerned about the influence of wealth as people like Musk flex their $ muscles in the political realm. Your article highlights other grrrrr worthy examples. I am interested that your current levels of privilege give you a pulse of hesitancy about the possibility of limiting the wealth of the stupidly wealthy - thank you for the honesty of that. Such concerns highlight the impossibility of obscene wealth ever being limited. In protecting what we have, we protect what the super wealthy have. Maybe we could reach for a slightly more exuberantly 'let's try something really daft' approach and actually start turning this planet and society damaging wealth tanker around. Or at least slow it's full powered trajectory through our lives.
So very true and cuts right to the chase. Also, brillliantly written!
I agree with your sentiment that we don't need billionaires and should tax their excess wealth. However, I am concerned with how this could actually be done well. I've yet to hear a good plan. No one seems to consider 2nd and 3rd order affects. You do in part with your concern about the threshold being lowered over time. Also, taxing wealth is very different from taxing income or purchases. As so much wealth is bound up in stocks and bonds, it changes daily in often arbitrary ways. I am concerned that everyday people with substantial retirement accounts they've spent their whole lives building may be (eventually) pulled into this in a way that damages them. But then, I also recognize (like you) that this may be my privilege talking. In any case, it is an idea worth considering and exploring how it might be implemented.
Those are all the specific qualms that bounce around my head, but then I go back to the fact that we're talking about BILLIONAIRES. It's difficult to even comprehend the scale of that wealth. If I was worth 10 million dollars, I would be so far beyond financial concerns that even that seems fantastical, but we're talking about having 100x more than that. Part of the present problem is that people with this much wealth use it to generate access to money that cannot be taxed as income because of the present set of rules. I think in the end, we don't really know what the 2nd and 3rd order effects might be until we get the 1st order in place. A society that puts wealth back in the hands of the people will be a very different place.
I also agree and that's one of my qualms generally with American Leftism today: there's very little attention paid to the *how* of ambitious proposals.
Now, in fairness, that's a situation that's not better on the political Right, which is serious since "Conservatives" are now actually Reactionaries, proposing radical changes rather than merely conserving the status quo. So, when Trump imposes a huge tax cut for the wealthy without seriously thinking about how that changes the fiscal situation in the United States, that's a major problem!
But Leftists are supposed to be better than that, right? So, let's say that the policy goal is to "get rid of billionaires." Most people would say that we just need to change the tax code. But billionaires aren't making most of their money from income, actually. In fact, the "money" doesn't really exist in the way that mere drones like us imagine. It's unrealized captial gains or equity in businesses or other such fancy-sounding forms of wealth or passive income. So, then, shall we tax wealth? Not so fast! That's been tried and abandoned many times because the devil is really in the details there: do you tax those unrealized capital gains? How do you decide what's taxable? And how do you actually assess the value?
It's already complicated enough with a store of wealth like a house, which must be assessed for the more familiar property tax. House values have been going vertical in the last few years, but you can still get away with a once-a-year assessment that's still not quite accurate and still will piss off the homeowner. And you also find cases where you accomplish something unintended: impoverishing the house-rich; cash-poor grandma, for example. Nobody wanted grandma to have to sell her home in order to pay the tax bill, right!?
You run into a myriad of such issues when you try to actually apply a wealth tax. Norway has such a tax and you could explain it as simple-as-can-be: "The total value of a person's worldwide net wealth above NOK 1.7 million (approx $170,000) is taxed at 1%." But dig deeper and you see the problem areas. Notice the word "worldwide?" That's put in there because rich people notoriously hide their money offshore in places like the Cayman Islands. So how does the Norwegian Tax Authority track that down? Well... they don't. It's based on the honor system, essentially. A lot of rich Norwegians just avoid paying this tax entirely with "creative accounting," while middle class people can't afford to avoid it. And what about "net wealth?" How is that calculated? Most houses in Norway, like in the United States, are worth way more than that $170K threshold--do they count? Are they double-taxed, when the homeowner already pays property tax? How about the plurality of Norwegians who have a simple little summerhouse cabin in the mountains somewhere? They have to pay additional property tax on that second home already, so are they to be then triple-taxed? And what about pensions? In Norway, contributory pensions are significant, subsidized by both the state and employers. Obviously, a lifelong worker reaching retirement is likely going to have a pot saved that clears that wealth threshold. So is that subject to 1% taxation on top of any capital gains and deferred income taxes they will pay on it? You can see that this wealth tax begins to ensnare a lot of regular people who aren't billionaires. Which isn't necessarily a bad thing: the Nordic Model is kind of "everyone pays; everyone benefits" and I personally am all for it. But people just need to understand that a wealth tax is difficult to model and enforce and that it is very likely going to impact regular people, too.
It's easy to reach for simple solutions like "cut taxes" or "tax the rich," but the reality of implementation isn't that simple and the details matter when they can completely undermine the stated policy outcome.
I can't imagine a billionaire ban having any effect other than billionaires finding creative ways to hide the money that takes them over the billionaire line.
Ha! My son went to UVA. There is no joking about Grounds. (Generally no definite article)
Or the Academical [sic] Village
Outside of practical considerations (how would you get all of the countries of the world to coordinate on the confiscation of wealth?), I've never heard a good reason not to abolish billionaires. It's one of those dead-simple ideas that is a) obviously the correct thing to do and b) unthinkable given the way we've constructed our society.
Good observations, John.
These are the logical expressions of escalating wealth and income inequality, which our country has generally embraced since the early 1990s.
Aphorisms which come to mind about getting rid of the billionaires: Be careful what you wish for; No good deed goes unpunished. When I read articles about billionaires or even $100,000 millionaires, I will consider how I would live with the much money. My conclusion is that I cannot conceive of a life like that. Maybe I would be like the billionaires of old and donate the money to serve the general good, including the arts, but maybe that air is too rarified to see beyond itself.
Your comments about tenured faculty resonated more with my life, as my son teaches at the Citadel, in your part of the world, and has for 5 years now. He had been an adjunct, a step below slave labor, and has scrambled to get full time teaching hours allowing him a living wage. There is a tenured position open, but he does not publish, although he is a spectacular instructor (spoken as only a mom could speak) but knowing his chances, he has not applied. He is, like yourself looking to pivot.
As other commenters have noted, a billionaire ban would be difficult to enforce because we have allowed money to completely warp our politics for too long. As Nolan already addressed in his piece, that doesn't mean it's not worth doing, just that we'll have to keep blocking the backroom deals and financial magic they attempt
John, I'm 100% on board. The sad reality of academic employment, even as it was many years ago, steered me away from what looked like a life I was made for (sigh). The even sadder reality of how extreme wealth warps politics is a good part of Autocracy, Inc., by Anne Applebaum. Readers of the Larson book you cite may find it interesting or terrifying, or both.
What a brilliant idea. I am becoming increasingly concerned about the influence of wealth as people like Musk flex their $ muscles in the political realm. Your article highlights other grrrrr worthy examples. I am interested that your current levels of privilege give you a pulse of hesitancy about the possibility of limiting the wealth of the stupidly wealthy - thank you for the honesty of that. Such concerns highlight the impossibility of obscene wealth ever being limited. In protecting what we have, we protect what the super wealthy have. Maybe we could reach for a slightly more exuberantly 'let's try something really daft' approach and actually start turning this planet and society damaging wealth tanker around. Or at least slow it's full powered trajectory through our lives.