Why We Should Abolish Billionaires and How We Should Do It
2020 has been the year of the billionaire.
The United States, which already has the highest number of billionaires in the world, added 56 new billionaires. This year, billionaires added nearly a trillion dollars to their wealth, and Jeff Bezos and Bill Gates became the first centibillionaires amassing more than $100 billion to their name. At the same, 2020 has been the year of the coronavirus and an economic depression. Over 300,000 died from the coronavirus, 60 million applied for unemployment, over 50 million reported food insecurity, and 40 million fell at least 3 months behind on rent/mortgage payments. The economic crisis compounded by the public health crisis has yielded misery and suffering for working families with deaths of despair on the rise. The American people are in dire need of economic relief on the scale of $4.5 trillion, but Congress had to be dragged kicking and screaming to pass a $900 billion package.
This is what it looks like when the government is bought and paid for by the billionaire class.
It’s time for a national reckoning on how our economic and political system became so convoluted that the people we elect to represent us have prioritized delivering results for their wealthy donors who pay LESS in taxes than their constituents. We absolutely should establish a robust public financing regime for our elections and impose new restrictions to root out corruption, but we must also confront a system that has allowed a handful of individuals to accumulate so much wealth and power in the first place. Capitalism has gone off the rails. For over forty years, in the name of free-market capitalism, politicians in both political parties have voted to privatize public goods, deregulate industries, reduce taxes profoundly on the super rich and big corporations, and allow financiers and investors to gamble on our mortgages. The alleged theory behind this policy framework was that government’s interference into the market hindered businesses’ ability to grow and infringed on individual’s liberty to spend their money as they wanted. Fast forward to 2020: even before the economy took a nosedive, Americans were being pinched by an affordability crisis. We didn’t get increased spending money. A rising tide did not lift all boats. We didn’t even get more economic growth. Neoliberal capitalism has utterly failed working families. The only beneficiaries are the billionaire class.
It’s time to abolish billionaires along with the system that allowed them to accumulate.
Our Founders’ Hated Extreme Inequality
It is fundamentally patriotic to pursue government policy aimed at disrupting extreme wealth concentration. The Founding Fathers believed that such concentration was detrimental to democracy. James Madison, the Father of the Constitution, warned us that “inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or “by an oligarchy founded on corruption.” John Adams feared a society of deep wealth concentration would “render [the people] mercenary instruments of wealth.” Even George Washington prescribed the ideal America to be one with an equitable distribution of property.
The Founders were right. Madison’s assertion of inequality in property ownership subverting liberty tracks with a society that allows big real estate moguls to become slumlords depriving millions from housing stability. His prediction that such an inequality could only be sustained through “an oligarchy founded on corruption” rings true particularly as we reconcile with the Trump family’s self-enrichment schemes. Adams’ contention that we would become mercenary instruments of wealth has proven spot on as we buy products from corporations made from prison labor and starvation wage labor disproportionately performed by Black and Brown workers. As Congressman-elect Jamaal Bowman recently stated, Plantation “Capitalism is slavery by another name.” Our reconciliation with extreme wealth concentration and the system that sustains it is a deeply American project.
Billionaires Corrupting Influence
I could write a dissertation on the multitude of negative externalities of having a society that allows individuals to accumulate so much wealth, but I’d rather just highlight this incredible episode of the Patriot Act with Hassan Minhaj as well as these two episodes from former Labor Secretary Robert Reich’s Youtube channel.
If you’ve made it this far, great! Watch the videos. They’re really informative and well done. If you’ve already watched them, great! You’re ahead of the pack.
How We Abolish Billionaires
In early 2019, Elizabeth Warren introduced a new policy to the American political landscape: wealth taxes. Her idea was to place an annual 2% tax on net worths over $50 million and a 6% tax on net worths over $1 billion. She would use the revenue to finance universal childcare, increased funding for K-12 schools, free college, student loan forgiveness, an investment in green manufacturing, and national health insurance (the last one being complementary to other revenue streams). This plan would not abolish billionaires or reduce their long-term wealth. It would, however, decrease their rate of increase in order to make critical safety net investments. This plan was incredibly popular with voters, and three other presidential candidates adopted similar forms of her proposal.
We should take Elizabeth Warren’s idea for a wealth tax and go further. Rather than tax solely for the goal of raising revenue, we should establish rates steep enough to surpass the rate of return on capital. If we taxed net worths over $1 billion at 12%, a slightly higher rate than the average long-term return rate on capital (10%), we could effectively tax billionaires into being millionaires. Erosive wealth taxation is a radical idea, but we are living in a society in which billionaire influence is destroying our planet and sentencing hundreds of millions to poverty and economic insecurity. The time to be radical is now.
Beyond wealth taxes, we need a multi-pronged strategy to prevent such extreme wealth from accumulating in the first place. This should include:
- Expanding marginal tax rates with a top rate of 70%, the rate it was at or above in this country for nearly 50 years
- Creating a special commission to recommend shorter and less all-consuming patents
- Replacing the patent system for pharmaceuticals with Bernie Sanders’ Medical Innovation Prize Fund Act
- Revitalizing the estate tax and increasing the top rate to 70%
- Enacting sectoral bargaining and passing Elizabeth Warren’s Accountable Capitalism Act
- Making stock buybacks illegal again
- Breaking up the Big Banks and passing sweeping financial regulations including a 21st century Glass-Steagall Act.
It’s been an incredibly difficult year for most of us. We’ve lost countless loved ones, and we’ve felt the sting of hunger, shame, anger, and loneliness. It’s time we build collective power and take back our government from the billionaire class. In 2021, we are abolishing billionaires altogether.