Tuesday, June 25, 2019

AN ASSESSMENT: Nineteen Billionaires Call for Wealth Tax

By Robert Wenzel

Well, this is something for the tight-fisted boys of Bohemian Grove to chew over this summer.

A group of 19 US billionaires has come out in favor of a wealth tax.

An open letter by the group was published at Medium and calls for "a moderate wealth tax on the fortunes of the richest 1/10 of the richest 1% of Americans. "

It was signed by:

Louise J. Bowditch, Robert S. Bowditch, Abigail Disney, Sean Eldridge, Stephen R. English, Agnes Gund, Catherine Gund, Nick Hanauer, Arnold Hiatt, Chris Hughes, Molly Munger, Regan Pritzker, Justin Rosenstein, Stephen M. Silberstein, Ian T. Simmons, Liesel Pritzker Simmons, Alexander Soros and George Soros. And a real brave one: Anonymous.

This crew thinks extremely highly of themselves. In the open letter, they speak of "moral, ethical and economic responsibility," as if they have read The Theory of Moral Sentiments by Adam Smith, The Foundations of Morality by Henry Hazlitt, to say nothing of the lesser known, Foundations of Private Property Society Theory: Anarchism for the Civilized Person, and rejected it all.

But that aside, in the letter they skip from morality, ethics and economic responsibility to, I am not making this up, polling data:
Polls show that a moderate tax on the wealthiest Americans enjoys the support of a majority of Americans — Republicans, Independents, and Democrats.
But, of course, based on likely votes it is probably a sound assumption that they are a minority in the billionaire world. There are easily over 600 billionaires in the United States, so their tiny billionaire faction of 19 (3%) couldn't even on their own elect the local Parks and Recreation Director in a town of more than 41 people.

That said, it is curious that this Gang of 3% are addressing their letter to Republican and Democratic 2020 presidential candidates rather than pulling out their checkbooks and showing "leadership" by writing substantial checks to the government.

I mean, when I want to buy a slice of pizza, I don't reach out to the fog cluttered brains on the local city council here in San Francisco and demand that they tax everyone to supply the city with slices of pizza because I am hungry, I just go into a pizza joint and buy a slice.

Why aren't the Gang of 3% following my lead on this? This would not be difficult. The multi-million dollar checks can be written this way:

Payee: United States Treasury

Address: United States Treasury Building
                Department of Incoming Checks from Billionaires
                Washington D.C.

But they are apparently not having any of this, they are statists through and through and are not going to give up one zinc filled penny until they force all super-wealthy to participate. You see they think it is all simple:
 The proposal is straightforward: It puts in place a tax of 2 cents on the dollar on assets after a $50 million exemption and an additional tax of 1 cent on the dollar on assets over $1 billion. If you have $49.9 million or less you are not paying the tax. It is estimated to generate nearly $3 trillion in tax revenue over ten years.
Of course, the damn statist taking of money is straightforward!

It is also what is done with the money that is a big question.

Here the Gang of 3% are quite naive:
This revenue could substantially fund the cost of smart investments in our future, like clean energy innovation to mitigate climate change, universal child care, student loan debt relief, infrastructure modernization, tax credits for low-income families, public health solutions, and other vital needs.
There isn't an original thought in this babbling on. This is what Pacific Heights social justice warrior teachers teach kids in pre-school these days.

It is almost embarrassing to take this apart and point out the errors in the thinking of these billionaires.

First off, the taking of money from the super wealthy means less funds available for investments that otherwise would increase the capital in a country which ultimately raises the productivity and standard of living of a country.

Second, it is idiotic to think of climate change as a macro event that will affect the entire planet the same way.

Finally, the rest of their proposal on how to use the funds coerced out of the hands of other billionaires contain suggestions that are all simply early stage socialist schemes that have started the collapse of country after country.

The proposals reveal a complete vacuum when it comes to the appreciation of how free markets work versus how government programs result in power centers that block change and creativity.

These people may have money, but they aren't rich in deep understanding. Their thinking is not much different than that of the average homeless crackhead here on Market St. The crackheads at least have a mentally deranged justification for wanting the government to rob billionaires. How does a billionaire justify robbing other billionaires for his loopy pet projects?

Remarkably, the Gang of 3% has no appreciation of the heroic value of billionaires sticking to increasing their wealth. And that right there is a very good example of how the massive government influence on education has failed even the country's most well off and why everyone, including billionaires desirous of being relevant, should be very suspicious of calling for the expansion of taxes and government programs.

Robert Wenzel is editor and publisher of EconomicPolicyJournal.com. Follow Wenzel here.


  1. Well done. But I wish you had included the reminder that the initial income tax rates resulting from the 16th amendment were also small, and also targeted the "just" the wealthy. We all know how that ended up.

    Concise history of the income tax at https://mises.org/wire/income-tax-lessons-sixteenth-amendment

  2. "This revenue could substantially fund the cost of smart investments in our future, like clean energy innovation to mitigate climate change, universal child care, student loan debt relief, infrastructure modernization..."

    Yes, they could write checks to the US Treasury, as you note, or, even better, they could make these "smart investments" themselves (cut out the middle man). Why don't they run a contest asking entrepreneurs to pitch them on ideas for clean-energy innovation, child-care centers, debt relief, and infrastructure investments?

  3. Would be interesting to know which of these billionaires created their billions vs. receiving it from the creator.

  4. The 3% ought to just start up their own charitable organizations to accomplish whatever goals they care about (child care, clean energy, etc...), fund those charities with their billions, and the result should be much better than the result of tasking the government with these things... Yet, for some reason they never seem to think of this obvious solution.

  5. They can just voluntarily give their money to the state if they want to. No need to pass a law. Something tells me they're not going to do that...

  6. Action speaks louder than words and their actions to keep their billions rather than give it away belies their words.

    1. "I'm so charitable, I'm going to donate your money to help the greedy... uh.. I mean the needy"

  7. Those involved in crony capitalism are simply part of the political class. It’s no wonder they spout the same BS.

  8. This is a scam. By and large the people at the very top don't pay taxes, they receive them one way or another. In the net they will benefit more than they pay in taxes. The big clue is they start the wealth tax at 50 million. This way they are penalizing people like professional athletes, actors, people who started businesses that took off, and so on. It diminishes possible threats to those on top. It's just another ordinary scam.