Unsurprisingly, billionaires and Wall Street legacy interests, even the politically-moderate ones, are pushing back on Elizabeth Warren’s proposed wealth tax. And in so doing, they’re providing her with publicity money can’t buy: What sounds dire to them is music to our ears.
There are a list of embedded assumptions — sometimes explicit — in their arguments:
- Things are working mostly fine;
- Billionaires deserve their wealth, which they have achieved through hard work; and not via, say, ruthless greed, blind luck, or monopolistic practices.
- Billionaires do a lot of good with their idiosyncratic philanthropies; and are more effective at spending their money than government would be; that their priorities for spending their wealth are by definition better.
Under such assumptions one can imagine why a shakeup of the status quo, big structural change, would be unwelcome. We, of course, are under no obligation to share these assumptions.
Old Obama car czar Steven Rattner sounds the alarm on behalf of the status-quo Wall Street donor class; and he’s rather explicit about thinking that mostly things are fine — we just need some tweaks:
Left to her own devices, she would extend the reach and weight of the federal government far further into the economy than anything even President Franklin Roosevelt imagined, effectively abandoning the limited-government model that has mostly served us well.
Ms. Warren may call herself a capitalist, but her panoply of minutely detailed plans suggests otherwise. She would turn America’s uniquely successful public-private relationship into a dirigiste, European-style system. If you want to live in France (economically), Elizabeth Warren should be your candidate.
“mostly served us well” … “uniquely successful public-private relationship” … These phrases are, as they say, doing a lot of work. Except for the failures, we’ve been very successful! Even under Obamacare, we still spend more than any other country on healthcare, without covering everyone. We facing the ruination of our very own ecosystem, which sustains all life. These are market and political failures, and they are not a coincidence; they are the result of the crushing influence of wealth in our politics. It is a telling admission that Rattner evades or minimizes Warren’s strongest arguments. He is trying very hard not to understand.
Politicians are not leaders; they are followers. Warren didn’t just come out of nowhere, after all. She is not a natural politician; she was drafted to run for Senate in 2011. Her campaign’s strength is based on our lived reality, the fact that huge areas of the economy have failed and endanger us.
And Rattner’s supposedly grim warning actually sounds like a roadmap to a much better, more just country. At least we understand each other!
Next we find Bill Gates complaining he’ll have to do some math to find out how much he’ll have left after Warren’s tax — and refusing to say he’d support her, even versus the complete demolition of our Republic at the hands of Trump. Warren has helpfully put up a wealth tax calculator at her site — including a special link for Bill Gates. Gates is worth $107 billion, most of which was created via monopolistic practices which killed off swaths of tech innovation for a generation; it wasn’t due to the overwhelming merit of MS-DOS vs. all comers. Gates has done genuine good — and some eccentric and unhelpful things — with his philanthropy; but you don’t get to be that rich without really loving money. He is a splendid argument for a wealth tax. (Now do the Kochs, Professor Warren.)
Finally, let’s catch the tone of a column by the American Enterprise Institute’s Michael Strain:
For one, [checking billionaires’ political power via a wealth tax] won’t work. You need a lot less than $50 million to be politically influential. And influence is much more diffuse than the plan’s advocates seem to think.
Warren’s wealth tax would be an abuse of government power. It is the tax-code equivalent of looting mansions. What is wrong with the way these 75,000 families made their money? Why should we have special tax rules for a tiny fraction — 0.06% — of households?
Paying taxes is not a punishment, and the tax code should not be used to penalize any group of citizens. Not even the very rich.
“Looting mansions”! “Punishment”! There are things that keep me up at night, but the somewhat diminished fortunes of the insanely wealthy are not among them. As you were, O Soul.
And is there any question of the dire political power of the billionaire Kochs, Mercers, and Adelsons (et al)? Yes indeed, there’s a big difference between the political influence of “ordinary” wealth, vs. immense, plutocratic, dark-money wealth. The former is merely corrupt legal bribery; the latter creates its own gravitational black hole, where reality itself is warped.
As I write this, it seems that Michael Bloomberg has jumped into the Democratic primary, as if we were all just waiting for him. The billionaires and their courtiers seem to think that it’s still the year 1999 and the stock market is booming, and the wealthy are admired. It is true that wealth was not as resented back then; it rather is now. A crushing recession and an existential crisis will do that. But our billionaires are slow in reading the room. Things are different now. Great fortunes have been hoarded; and the vast majority of the public is not allowed a part in that prosperity. We’ve got things we could do with that money, like granting future generations a chance at a dignified life. And democracy is in danger.
Meanwhile, they’re doing Warren an immense favor in free publicity. Here’s hoping they keep it up!
Addendum: The New York Times editorialized in agreement today — it’s a good read that takes on Gates’s objections directly.
SomervilleTom says
Indeed, I’ve been thinking for some months now that what the Democratic party and America really needs is yet another 77 year old white male billionaire. I guess that the problem with Ted Steyer is that he only has one billion — not nearly enough to have any real perspective compared to Mr. Bloomberg’s FIFTY ONE BILLION dollars.
As you correctly observe, Mr. Bloomberg is a compelling argument in favor of Ms. Warren’s wealth tax — not to mention significant increases in the gift and exchange tax. He also exemplifies the need for various proposals to increase the top capital gains rate, change capital gains taxes so that they are pegged to current market value rather than requiring the sale of the asset, and so on.
Mr. Bloomberg became wealthy helping wealthy clients be better at acquiring more wealth. Mr. Bloomberg personally embodies how our obscene wealth concentration happened.
I think it’s worth mentioning that Mr. Bloomberg won two terms as New York City mayor as a Republican — he switched party registrations in 2001 in order to run as Republican in the race to succeed the erstwhile Rudy Giuliani. He ran and won for a third term as a Republican/Independent in 2009,
In order to be able to run for re-election to his third term, Mr. Bloomberg arranged for the city’s existing term-limit law to be dropped. He also spent a total of $1.4 M in personal funds on securing his victory in the 2009 election. He changed his registration from “Republican” to “Independent” prior to that race, while giving a $1.2M in donations to the Independent party just prior to the election. The Independent party then transferred $0.75 M to John Haggerty (a Republican political operative). Mr. Bloomberg separately gave $0.2 M directly to Mr. Haggerty to cover “office expenses” for Mr. Haggerty. So approximately one million dollars of personal funds of Mr. Bloomberg — allegedly an Independent, elected twice as a Republican, went to a Republican party operative.,
Mr. Bloomberg now seeks the Democratic Party nomination.
With “Democrats” like Mr. Bloomberg, who needs Republicans?
johntmay says
And what of this?
Hillary Clinton called the wealth taxes proposed by Sens. Bernie Sanders and Elizabeth Warren “unworkable” and said they would be “incredibly disruptive” if enforced
Birds of feather, I’d say. She and Bill went from bankrupt to multimillionaires in a few short years after retiring from public service. Yes, Madam Secretary, we do indeed intent this wealth tax to be incredibly disruptive of that sort of thing. .
SomervilleTom says
I disagree with Ms. Clinton about this. Her stance towards wealth concentration was for me one of her weakest aspects as a candidate. Fortunately, she is not running again.
petr says
Whatever else you might thing of Hillary Clinton, it’s altogether obvious to the intelligent amongst us that any and all bankruptcy– however soon after public service– derived from legal fees incurred as a result from attacks upon their character, public and private, because of …
… drum roll…
.. that very same public service.
Some people are snipers: away from the action and seemingly above the fray, tho’ their trigger pull, to the fray, be decisive. . Other people put themselves in the line of fire… that is to say, in the scopes of a sniper…
Which one are you?
johntmay says
I’m the one who admires the character of Jimmy Carter as the best example of how presidents should act after leaving office, serving the public out of gratitude, not cashing in on newly found fame and celebrity
SomervilleTom says
There have been seven Democratic presidents since FDR: Harry Truman, JFK, LBJ, Jimmy Carter, Bill Clinton, and Barack Obama.
It is true that Jimmy Carter, like Harry Truman, has intentionally avoided even the appearance of cashing in on his celebrity. As admirable a man as he is — and I admire him greatly — he was far and away the least effective president of the seven.
It is also true that several of Jimmy Carter’s policy changes — such as deregulating the broadcast industry — have, in retrospect, played directly into the hands of the GOP and big business. Jimmy Carter was more conservative, and therefore more friendly to big business, than the rest of the Democratic field in 1976.
Surely even you would agree that Jimmy Carter is not a tool of big business. Neither are any of the others. A decision to not acquire wealth after leaving office is not predictive of effectiveness, nor is it predictive of economic policy.
The attacks you so often bring against (apparently) five of the seven Democrats who have been president since FDR would not therefore result in a more effective president if successful. Nor would they result in a more worker-friendly economic or business environment.
It appears to me that the only thing such attacks accomplish is to express your own envy about men and women who make more money than you.
johntmay says
Wanting moral justice is not envy.
SomervilleTom says
I don’t see this as a moral issue.
johntmay says
The president of the USA leaves office and signs a $65 Million Dollar book deal while 40% of the citizens of the USA can’t come up with $400 for an emergency…..and you can’t see the immorality?
Christopher says
Is the $65M coming out of the pockets of those who can’t come up with $400 for an emergency?
petr says
James Earl Carter has authored 29 books since leaving the office and has a net worth estimated to be in excess of 10 million dollars. He also started the Carter center which (as of this writing) has close to a billion-dollar endowment
While I’m a complete and total bookworm and therefore unlikely to say any book is unreadable, I do suggest that some of them might not have seen the light of a published day had not the author been President of these here United States.
I admire James Carter as much, if not more, than you do, but I don’t begrudge him ‘cashing in’ and I–likewise–don’t suggest that others making money–or ‘cashing in’ just like he has– have lesser motives than he. I like to read what he wrote. I also want to read what Bill and Hillary wrote, and Barack Obama and others…
petr says
Not quite…
… In this instance, every time a billionaire complains, a demon gets its pitchfork.
terrymcginty says
I think your pointing out the underlying shibboleths about them deserving or “earning” every penny of their wealth is so important.
Their wealth did not arrive from Mars. WE as a society provided the entire economic infrastructure that they simply milk with an idea or two, or in the case of Microsoft in part it arrived after a vicious and questionable lawsuit against Apple back in the eighties that ratified the stealing of many of Apple’s innovations that every law student studies.
jconway says
I’ll add that their billions would have been far more helpful rebuilding 50 state democratic parties, buying and shutting down Fox News, or shoring up the ACLU, gun control groups, or fighting climate change. An ALEC for the center left while we’re at it. Or just saturating states with anti-Trump ads. George Soros gets a lot of
Flack, but he puts his money where his mouth is. So did Steyer and Bloomberg before they became vanity candidates.