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American Billionaires

Want to know how much the top 9 American billionaires have? $1.221 trillion dollars collectively. If we had the courage to tax away from each of them all but $10 billion (a total of $90 billion), then the nation would have $1.131 trillion more.

Gee, that would make the 9 billionaires all poor! (Don’t be silly; they’d still be as wealthy as all get out).

What could we do with that money? We could buy 41,999,160 new cars, enough to get a new Prius for about 40% of the population. Or pay a year’s salary for 18 million elementary school teachers (there are only 2 million such teachers, so the money would cover them for about 9 years). Or pay the salaries of 56.8 million Army privates (there are only 5.68 million or so, meaning that the money would cover their salaries for about 10 years). Or it would cover $1 million in spending per day for more than the next 2,720 years. Any of those things would cost around $1 trillion. There would still be $131 billion left over.

What in God’s Name do these people need that sort of money for? Couldn’t they live comfortably on $10 billion each? Yes, of course they could!

Why aren’t the wealthy taxed more appropriately? Simple: they use their wealth to coax the legislators into keeping their tax rates low.

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The top 1% of the wealthy in the United States have $41.52 trillion. The federal government spent only $6.6 trillion in 2020. In other words, the government could tax away $6.6 trillion from the top 1% and leave them with a bit less than $35 trillion, and pay for all the federal spending. Of course, that wouldn’t be particularly fair, because the top 1% earned “only” $2.38 Trillion in 2020, But it gives you some idea about how much the wealthy actually have. And in the past week or so, we learned through the “Pandora Papers” that the world's wealthy hide their money and assets from authorities, their creditors and the public by using a network of lawyers and financial institutions that promise secrecy. (The names of many of the United States’ richest did not appear in the Pandora Papers – either because the financial services that they use were not included or because they pay such low tax rates that they don’t feel it necessary to hide their wealth abroad).

Why aren’t the wealthy taxed more appropriately? Simple: they use their wealth to coax the legislators into keeping their tax rates low. They also use all sorts of accounting tricks (legal and illegal) to hide their income. And we don’t do what is necessary to bring their tax rates up to a more appropriate level. Moreover, we don’t devise the systems necessary to uncover the tricks used to hide the income. We should set up a national whistle-blowing system so that people will rat out the wealthy who hide their wealth.

Americans – even the poor ones – seem to think that it is in the country’s and their best interest for people to horde outrageous amounts of wealth. Let’s just say it straight out: this isn’t true. Many other countries in the world have successful economies even though the wealthy do not get to keep such gross amounts of wealth. Let’s not forget that in 1944-45– when our economy worked very well indeed – a 94% rate applied to any income above $200,000 ($2.4 million in 2009 dollars, given inflation). What was wrong with that system? Answer: nothing.

michael hertz

Face the facts: wealth inequality is a major U.S. problem. Wealth inequality leads to political corruption and huge dissatisfaction among those at the bottom of the income chain. Wealth inequality is what gave us the Trump presidency. And it is what has given us political stalemate in the year 2021. And political stalemate is allowing climate change to charge forward, to the detriment of us all.

Michael Hertz