No Country For Billionaires

It occurred to me not long ago that every time my family has gone out to eat with my brother-in-law’s family, I pay the tab. There are three ways to look at this phenomenon. The first is that I have substantially more wealth than he does, so I can better afford it. The second is that I choose to do so, so it’s my pleasure to pick up the bill.

The third is that he’s cheap and never reaches for the check, even though we all ate a meal together and his share of the bill is invariably greater than mine as he tends to imbibe in significantly greater quantities when it’s us, since he knows he won’t be the one paying for it. On his own, it’s burgers. With me, it’s filet or lobster.

I don’t expect anyone to feel badly for me. But do I owe him a free meal? It’s not that I can’t afford it. I can. Without breaking a sweat, I can provide him and his family with a delightful meal at a restaurant he would never go to otherwise. In my mind, it’s my pleasure to do so, though it would be nice if he tried, just once before I died, to pick up a tab. I wouldn’t let him, but it would be nice not to feel as if I’m just a meal ticket.

Who will stand up for the billionaires? They are filthy rich, disgustingly wealthy beyond all need. We could all stand a free meal on their tab, right Bernie?

Say Bill Gates was actually taxed $100 billion. We could end homelessness and provide safe drinking water to everyone in this country. Bill would still be a multibillionaire.

Our message: the billionaire class cannot have it all when so many have so little.

What’s particularly curious here is that the guy Bernie is going after is Bill Gates. He and Melinda have been extraordinarily generous with their wealth, often to causes that are either quite progressive, such as Melinda’s feminist funding, or people who are suffering from poverty and horrific conditions. They have been generous in helping others, have promised to give away most of their wealth and are wonderful global citizens.

But Bill Gates had the audacity to draw a line.

Bill Gates on a wealth tax:

“I’ve paid over $10 billion in taxes. I’ve paid more than anyone in taxes. If I had to pay $20 billion, it’s fine.”

“But when you say I should pay $100 billion, then I’m starting to do a little math over what I have left over.”

Say Gates would still have a net worth of $5 billion. Isn’t that enough? Is he really complaining that he couldn’t survive on that? How can he justify his selfishness when that $100 billion could be used for so many important things for society?

The New York Times offers an editorial explaining why the incentive for innovation argument for vast wealth doesn’t hold up.

The available evidence strongly suggests that taxation exerts a minor influence on innovation. Experts have an imperfect understanding of what drives innovation, but taxation isn’t in the same weight class as factors including education, research and a consistent legal system.

At the same time, they make the Willie Sutton argument:

The federal government needs a lot more money. Decades of episodic tax cuts have left the government deeply in debt: The Treasury is on pace to borrow more than $1 trillion during the current fiscal year to meet its obligations. The government will need still more money for critical investments in infrastructure, education and the social safety net.

If billionaires are where the money is, we need money and there won’t be any devastating harm to innovation from taking it, the calculations seem pretty straightforward. Bernie sees it. Liz Warren sees it. The New York Times sees it, as does every person who wants someone else to pay the dinner tab because they could really use a good meal and the other person can afford it. The argument for a wealth tax is obvious: they have money. We want it.

Who will stand up for the billionaires? Even if they earned it, from their labor plus good luck, to their passive investments plus good luck, to pure kismet of being a seminal heir to the fortune, is there not a point where enough is enough, where enough need for the groundlings must prevail over the relative handful of billionaires, estimated to be 607 at the moment, so we could easily take them in a fight.

While I have no complaints about the good life I enjoy, I’m no billionaire. It would surely be in my personal best interest to milk the Big B’s for their unfair wealth and apply it to the roads, the healthcare, the college tuition and my dinner tab. But then, it’s their money.

For better or worse, they “earned” it in the sense that they lawfully accumulated a vast amount of wealth by using the means society provided. We all try to do it. We all want to do it. Few of us did it as well as they did, and so they are far richer than we are. So now, we’re entitled to decide they have too much wealth and get to confiscate their wealth for our benefit?

Bill Gates doesn’t have to justify why we can’t take $100 billion from his pocket. It’s his money. Just as we have things that are ours, whether it’s our bank accounts, our homes, our iPhone, he has his wealth. We can tax the wealthy, just as we all get taxed to pay for the things government does for us, even if it doesn’t spend the money the way we individually might prefer or with the sense of thrift Bill Proxmire would demand, but we cannot simply confiscate the wealth of billionaires because they are richer than we feel they should be.

And when we’ve taken all we can from the billionaires, and realize that our lust for a free meal is unsated because as wealthy as the billionaires are, our enlightened self-interest in rationalizing why free things are good for us is far more vast, will we suddenly accept the notion that confiscation is wrong when they come for your house or car, because who needs an Austin Healey Mercedes Benz when you can drive a Chevy, which will get you wherever you need to go just fine?

Willie Sutton was right, the reason to rob banks is because that’s where the money is. The reason to confiscate wealth from billionaires is because that’s where the money is. But Willie Sutton was a bank robber.

41 thoughts on “No Country For Billionaires

  1. KP

    ” He and Melinda have been extraordinarily generous with their wealth, often to causes that are either quite progressive, such as Melinda’s feminist funding, or people who are suffering from poverty and horrific conditions.”
    “How can he justify his selfishness when that $100 billion could be used for so many important things for society?”
    The first sentence show why he is far, far more qualified to spend the $100billion than those of the second sentence. The LAST people you want ‘helping’ you with other people’s money are those who have never earned it! While he might not throw money away on your pet project, overall I’m convinced he makes sure the money he gives away is well spent. That would be QUITE different to the bureaucrats & politicians who would love to get their hands on it.

    Reply
    1. SHG Post author

      On the one hand, Gates might be wiser in putting his wealth to good use than people who lack his ability to earn it. On the other hand, Gates might be entitled to use his money any damn way he pleases because it’s his, even if Bernie, Liz and the crowds on social media are absolutely certain they know better.

      Reply
  2. Dan

    …and there’s no reason to expect they’d remain under the taxing authority of this country if such a thing were to happen. A common characteristic of the very wealthy is that they aren’t dumb–they aren’t necessarily the smartest people around, but stupid rich people just aren’t very common. And they usually have very smart people working for them who can figure out how to arrange things for their benefit.

    Reply
    1. SHG Post author

      They may vote with their feet. They may arbitrage law around the world to their benefit. They may just write a song about it.

      Reply
    2. Hunting Guy

      Personally I doubt that Gates will give up his American citizenship.

      And Bernie better be careful. Gates can throw really serious money into the political arena and Bernie might not like the results.

      Reply
        1. paleo

          The 1%/99% thing is an arbitrary cutoff. Bernie is part of the 5%, give or take.

          When the proles come for the wealthy with buckets of tar and nooses (is it still ok to say the word nooses?), Bernie is going to be on the same side of that conflict as Gates is.

          Reply
      1. Dan

        “Personally I doubt that Gates will give up his American citizenship.”

        I’d think it would depend very much on the incentives. If, for example, a bill were to gain serious traction providing that any person’s wealth in excess of $1B was forfeit to the government, I’d fully expect him to be making moves in that direction–I know I would. And I’d similarly expect the smart people he has working for him to come up with an airtight legal way for him to avoid that.

        There is a point beyond which he won’t be pushed. Neither you nor I know what that point is, but it’s there, and he has the resources to enforce that point pretty effectively.

        Reply
  3. Hunting Guy

    Robert Heinlein.

    “There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.”

    “The power to tax, once conceded, has no limits; it continues until it destroys.”

    “Taxes are not levied for the benefit of the taxed.”

    Reply
      1. Casual Lurker

        “I restrained my impulse to work TANSTAAFL into this post…”

        Fortunately (or not, depending on your point of view), I feel no such constraints in repeating the well-worn Margaret Thatcher quote:

        “The trouble with Socialism is that eventually you run out of other people’s money”.

        Reply
    1. Casual Lurker

      “The power to tax, once conceded, has no limits; it continues until it destroys.”

      Here, in what mayor John Lindsey once called “fun city”, our present mayor, Hizzoner, Comrade de Lousy-O, when testifying before the state senate, ostensibly asking for a “millionaires tax”, actually asked the state to give the city “tax autonomy”. When questioned, he conceded that the tax might actually kick in “starting at $125,000”. (He initially said that it wouldn’t effect anyone making less than $500K). Fortunately, Gov. Cuomo and the previous legislature put the kibosh on the idea.

      While Hizzoner has recently been preoccupied with other matters, some vocal members of the NYC Council have been pushing for him to make a return trip to Albany, with a laundry list in hand. They figure that with the present, Democratic-controlled legislature, they may have a shot. Even if Gov. Cuomo vetoes any such bill, the lege’ may have the votes to override.

      I can’t begin to enumerate the list of businesses that a combination of NYC’s regulatory* and confiscatory policies have already destroyed. Unfortunately, no one in city Govt. appears able to do math. Which brings home Heinlein’s point.

      An equally appropriate quote may be one from Edmund Burke** (1729 – 1797):

      “Those who don’t know history are destined to repeat it.”

      It appears those in city Govt. also have no institutional memory, conveniently ignoring what happened to mayor Abe Beame, an accountant by trade, who knew better, and somehow still managed to put the city into insolvency, automatically taking away the Mayor’s fiscal authority and putting the city’s budget in the hands of banker Felix Rohatyn and the state EFCB. (Emergency Financial Control Board).

      In truth, many know better. But, thanks to term limits, figure they’ll be out of office by the time the digestive track byproduct impacts the air circulation device.

      *In this city, the regulatory framework is largely a part of the confiscatory nickle and diming. e.g., most commercial businesses that allow the general public on premises are required to have a fire protection system with an alarm bell, installed by a city-approved contractor. Every 15 to 18 months the regulation is changed to require the bell be painted a different color. One cycle it’s Fire-Engine Red, the next it’s Battleship Grey. The fine used to be $500. I’m told it’s now over $2K. The Fire Marshall always has his Regs’ handbook dog-eared to the exact page, with the sub-section yellow-highlighted. This is but one example. Businesses are routinely hit with dozens of these types of traps throughout the year. It’s amazing any of them remain in NYC.

      **Not to be confused with similar and/or mis-attributed quotes by others.

      Reply
  4. Skink

    Some stuff, by the numbers:

    1. According to the Warren plan, Gates would be taxed about $6.4B. It’s okay, they say, because it’s still less than he made. So long as they don’t take it all, it’s fair.

    2. The research cited in the op-ed isn’t as advertised. Two groups from Harvard researched and determined something remarkable: people with patents tend to have better education. The conclusion was if poor kids had better education, they could invent stuff. Amazing conclusion! The op-ed makes the unstated assumption that education isn’t right there for the getting. Nope, it’s the billionaire’s money thwarting education and keeping not-rich kids from inventing. Are inventors billionaires, or do they work for billionaires?

    3. Sanders and those supporting this theft always sing the same sort of teary refrain: “we could end homelessness.” At the risk of opening a bunny hole*, money won’t cure that problem. It cures few problems. Throwing money at the personal ills of society rarely does more than create the need for more throwing.

    4. Did you ever, in wildest hallucinations, think you’d see this sentence int he NYT: “The federal government needs a lot more money”? Apparently, the NYT thinks the government is doing all it can, but must go into debt to do its fine job. There’s no call for the Feds to spend the money wisely. It already does that, but it’s the victim of billionaires. In what other point in its long history has the NYT taken that position?

    5. I miss the Golden Fleece Award. How else would we know about $700 toilets seats?

    *Please don’t do it. Saturdays in this here Hotel are far too important for dopiness.

    Reply
          1. Casual Lurker

            “I would prefer bacon at the moment…”

            Yeah, go ahead. I’m standing by in the hotel lobby with the crash cart. The paddles are charged, lubed, and ready! I’ve taken the liberty of giving the Cath’ lab a heads up. (They swear they’ve gotten rid of all those recalled, defective, stents, so no worries).

            We’ll keep Dr. SJ fully appraised of your status. (Professional courtesy and all).

            Reply
    1. Hunting Guy

      Off the main topic but In the interest of accuracy….

      Peter Wezeman.

      “My memory is that it was $600 for the toilet seat for a
      Lockheed Orion. According to what I read, magazine reporters checking
      on the story found that it was not just the seat, but the entire top
      cover for a chemical toilet. They sent the specifications for the
      seat around to several suppliers who did that kind of plastic molding
      and found that $600 was a competitive price.
      Later there was the $7,000 coffee maker for the C-5 transport.
      It was an off-the-shelf airliner coffee maker. The Air Force paid about
      twice what an airline would, but that was because they requested a
      discontinued model of the same type as they were already using.
      Not to say there isn’t some waste, fraud, and abuse going on
      but reporters often jump to conclusions.”

      Reply
  5. Ross

    What’s left out of these discussions, although I’m pretty sure that Sanders and Warren know this, is that Gates, Bezos, and other billionaires don’t actually have their billions in cash. Much of the wealth of these alleged leeches is in shares of stock in the enterprises they founded. If those shares have to be sold to fund the desires of the Progressives to build Utopia, what happens to the businesses once the founders lose control? Can the billionaires even sell enough stock to fund their tax bill without tanking the stock price? Are there enough people to buy those shares who aren’t already billionaires trying to fund their own tax bills? Do Bernie and Liz have any answers to these questions?

    Reply
    1. Leonidas

      Yes, assets are not money, even though Warren’s silly little website calculator pretends this is the case. And the majority of these assets are highly illiquid, land, real estate, business ownership. A wealth tax will spawn costly valuation disputes, and drive wealth into the inevitable exemptions that will be carved out for any legislation to actually pass. This is way 8 out of 12 OECD countries have abandoned their wealth taxes in recent years.

      Reply
    1. SHG Post author

      By complete accident, and a dire need to pee, I did that once to someone for whom I absolutely wanted to pay for dinner. It was a nightmare fighting about it afterward, which taught me to resist the urge.

      Reply
  6. Jay

    Christ you’re all about strawman arguments this week Scott. No analysis of where billionaires came from, you act like they’re just a thing that happens. No analysis of what happened to the rest of the country while billionaires were becoming a thing. Basically, no understanding of how wealth distribution worked prior to the 80s. Ok boomer.

    Reply
  7. jay-w

    If I’m doing the math correctly, $100 billion would keep the federal government running for about a week and a half. … Then what?

    Reply
  8. Scarlet Pimpernel

    For some of us, maybe, it isn’t about protecting billionaires but rejecting being lied to. According to the CBO “(i)n 2019, the government’s revenues amounted to $3.5 trillion—$133 billion (or 4 percent) more than in 2018.” Which would seem to indicate, if the underlying statement is true, that with existing tax increases there is the money to “end homelessness and provide safe drinking water to everyone in this country”, if only they chose to.

    Basically, either we are being lied to to begin with or politicians are holding the poor and homeless hostage because the additional revenue didn’t come from the right sources.

    Reply
  9. Jesse

    Always lost in this discussion, and only mentioned once so far here, is that these vast amounts of wealth held by these individuals are not piles of cash that can simply be taken. It exists almost entirely as equity in production-producing assets, like Microsoft and Amazon.

    The principles against simply confiscating this wealth notwithstanding….doing so would produce vast distortions of the equity markets and the valuations of companies, much of which is not held my multi-billionaires but pension funds, 401Ks of regular folks, etc

    It is certain that neither Jeff Bezos, Bill Gates, nor any other person with this kind of wealth will actually realize more than a small fraction of it, and will spend an even smaller fraction of that. Trying to take it all is a fool’s errand and a fundamental misunderstanding of the nature of wealth.

    Reply
  10. Jesse

    In addition, the Times also misunderstand how wealth is created in the first place. It’s ridiculous that wealth is better off in the hands of the coercive, consumptive state than in the hands of the free people that used their minds and capital to create it in the first place. We know instantly how wealth and value is created—-free people choose to make an exchange that increases it wealth for both the seller and buyer. The government is a wealth destroyer by definition because nobody wants what they are selling at the price they are offering it. They must confiscate to provide it.

    Reply
  11. Fubar

    … will we suddenly accept the notion that confiscation is wrong when they come for your house or car, because who needs an Austin Healey Mercedes Benz when you can drive a Chevy, which will get you wherever you need to go just fine?

    Bernie and Liz explain wealth redistribution to the Peasant:

    Bernie and Liz: We will explain our system to redistribute wealth in terms so simple you can not fail to support it.

    P: Thank you. Please explain.

    Bernie and Liz: If someone has two farms, we will take one and give it to another who needs a farm. Can you support that?

    P: Why, yes, I can.

    Bernie and Liz: If someone has two houses, we will take one and give it to another who needs a house. Can you support that?

    P: Why, yes, I can.

    Bernie and Liz: If someone has two cows, we will take one and give it to another who needs a cow. Can you support that?

    P: Why, yes, I can.

    Bernie and Liz: If someone has two chickens, we will take one and …

    P: No!

    Bernie and Liz: But, why do you not support our system to make everyone equally wealthy?

    P: I have two chickens!

    Reply
  12. B. McLeod

    The problem is that it is a short step from billionaires to multimillionaires, and indeed, the same “logic” ultimately works against anyone who has anything.

    Reply

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