America's 813 Billionaires Must Have Been Extremely Happy With The Biden Administration Yesterday

The Wall Street Journal has a headline yesterday that probably pissed off a lot of Democrat: A Global Tax on Billionaires? Janet Yellen Says ‘No’. The idea was to prevent the rich “from shifting wealth into countries where they can avoid paying the tax. Andrew Duehren reported that Yellen in opposing the proposed global wealth tax on billionaires, the U.S. “is rejecting an idea floated by Brazil, France and other nations to tip the economic scales away from the megarich.” There are now 2,781 billionaires worldwide, 141 more than last year— and the most in history. A plurality live in the U.S., 813 of them (almost one in 3), every single one of them a. Criminal. China is second with 473 of them and India has 200. Honoré de Balzac: “Behind every great fortune lies a great crime.” He wasn’t the only one to notice. Chris Hedges said that “The billionaire class is a criminal class. They have rigged the system to drain wealth upward.” Noam Chomsky also got it right: “You don't get a billion dollars without a lot of people getting a dollar an hour. You can be a decent person or you can be a billionaire, but you can't be both.”

In his book Capital in the Twenty-First Century, Thomas Piketty argued that extreme inequality is inherently destabilizing and often results from systemic imbalances rather than individual merit and Bernie summed it all up brilliantly: “Billionaires should not exist.”

“It is Brazil’s turn to lead the Group of 20 major economies this year and the country has called on the group to develop a coordinated approach for taxing ultrawealthy individuals who can move their money into low-tax jurisdictions,” wrote Duehren. “The goal is to mirror a global minimum tax on corporations, which roughly 140 countries signed up for in 2021 but has since run into roadblocks in the U.S. and elsewhere. Yellen said the U.S. wouldn’t support the talks on the issue. She is due to meet later this week with finance ministers from the Group of Seven advanced democracies, who are expected to discuss the global wealth tax. ‘We believe in progressive taxation. But the notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way— we’re not supportive of a process to try to achieve that. That’s something we can’t sign on to,’ she said. Along with ministers from Brazil and France, officials from Spain, Germany and South Africa have discussed a plan that would require billionaires to pay taxes worth at least 2% of their overall wealth every year. Levying the tax globally, proponents say, would stop the rich from shifting their wealth into countries where they can avoid paying the tax. That would allow countries to raise more in tax revenue to finance other priorities and use the tax code to reduce income inequality, which has widened sharply in recent decades.”

Patriotic Millionaires, which has been working towards this for a very long time released this statement yesterday:

“We are mystified by Secretary Yellen’s comment suggesting she has rejected the G20 proposal for a global minimum tax on billionaires. Her comment is starkly at odds with President Biden’s stated goal of compelling billionaires to pay their fair share; it is at odds with the growing consensus on taxing the ultra-wealthy; and it is at odds with her own history of being a champion of international cooperation on tax matters.

“Secretary Yellen’s statement seems to stem from concerns that the revenue from such a tax would be ‘redistributed.’ However, the proposal would not institute a global tax that is then globally redistributed. The blueprint for this proposal is the OECD agreement for a global corporate minimum tax that she herself championed, which enables individual governments to determine how the taxes collected within their borders are spent.

“If her concerns are simply about redistribution, she should clarify that ahead of her meetings later this week. But to reject the very idea of a global minimum tax on billionaires is to cede control of our economies and our democracies to oligarchs and plutocrats. In short, a wholesale surrender to the political influence of the ultra-rich would be a grave mistake.”

“This is exactly what we did with minimum taxation on corporate tax,” French Finance Minister Bruno Le Maire said last month. “It would be the same on the international taxation for the wealthiest individuals.”

Most countries apply their income taxes based on a person’s residence. The U.S., unusually, taxes its citizens on their worldwide income, already making it harder for Americans to escape taxation by shifting assets and earnings abroad.

While the Biden administration has proposed significantly raising taxes on high-income Americans, it has shied away from a wealth tax, which seeks to annually collect a share of an individual’s net worth. President Biden has instead pushed for a plan that would require Americans worth more than $100 million to annually pay a 25% tax on all of their earnings, including unrealized capital gains.

Capital gains in the U.S. are now generally taxed at a top rate of 23.8% when the asset is sold, meaning increases can go untaxed for years. Income, including wages, is taxed as it is earned at a rate as high as 37%, plus other levies. The Supreme Court is expected to weigh in soon on a case that could create a constitutional prohibition on taxing wealth.

Yellen helped spearhead the global agreement on corporate taxes, which sets a 15% minimum that companies must pay in jurisdictions where they operate. But with Republicans opposed to it, Congress hasn’t approved the deal.

The Biden administration’s decision to nix the global minimum tax framework belies the urgency of addressing wealth inequality. The gap between the wealthy and the rest of society continues to widen, and Biden talks a good game but… like he said when he was running, assuring a bunch of wealthy donors, “essentially nothing will change.” What they’re doing is protecting the interests of the ultra-wealthy rather than addressing the extreme wealth inequality. By rejecting a wealth tax, the U.S. is missing an opportunity to redistribute wealth more fairly and to fund essential public services that could benefit the majority. The wealth amassed by billionaires always  stems from systems that exploit workers and evade fair taxation, making a far more stringent wealth tax than what Brazil and France are proposing a necessary corrective measure.

"Sun Mad" by Ester Hernandez

We’ve all see the Biden administration trying to appeal to workers by expressing a determination in making the tax system more progressive, yet Yellen’s rejection of a wealth tax contradicts these goals. A wealth tax, as proposed by figures like Elizabeth Warren, could go a long way towards addressing extreme wealth and power inequality. This inconsistency suggests a lack of commitment to addressing economic disparities. While Yellen highlights the implementation difficulties of a wealth tax, these challenges should never be an excuse for inaction. Instead, they advocate for innovative solutions and robust enforcement mechanisms to ensure that the tax is effective. Technical difficulties are surmountable given the potential benefits of such a tax in reducing inequality and making the middle class feel comfortable about funding social welfare.

From a global perspective, the refusal to back this tiny wealth tax undermines efforts towards economic justice and equity. Billionaires often have their wealth distributed across various countries, and a coordinated global effort is the only way to ensure they contribute fairly to the societies from which they profit. By not supporting a global wealth tax, the U.S. will be seen, rightfully so, as hindering global progress on wealth redistribution and fairness. A more aggressive stance on taxing the rich to ensure a fairer distribution of resources and to address the systemic issues that allow extreme wealth accumulation at the expense of the broader population​ is a minimum of what is expected from Democrats in government. Their current approach doesn’t address the broader issues of economic justice and the systemic nature of wealth inequality. Policies should aim not only to increase tax revenues but also to fundamentally shift the balance of economic power. This includes stronger regulations on billionaire behavior, more progressive taxation on wealth and income, and substantial investments in public goods and social welfare programs. The focus should be on creating a more equitable economic system that prioritizes the needs of the many over the wealth accumulation of the few. The Biden administration’s approach is a cautious and compromised effort that falls short of addressing the urgent and systemic issues of economic inequality.

This morning Thomas Witkop, the progressive running for a swing district in Florida that MAGA kiss-up Brian Mast uses to serve the interests of special interests. He reminded me that he “decided to run for office because I saw economic injustice. In my neighborhood, people worked long hours, just scraping by to afford a one bedroom apartment for their family, while a few miles up the road rich people decided whether to buy another yacht. Working in a development role at a nonprofit in Jupiter Florida, I spent time with these rich people and discovered the vast majority will never voluntarily part with a meaningful amount of their wealth. It is up to our government to pass effective tax laws (that aren't dictated by the rich who control campaign finance) in order to expand access to quality healthcare, education, and other human rights.”

Eric Wilson, the progressive Democrat taking on Derrick Van Orden in western Wisconsin, is, unlike his opponent, very much in favor of the proposal to tax billionaires. “I understand that the US taxes citizens globally, but I think the U.S. should consider talks about a global tax. To ensure that the ultra wealthy are not just moving money around the world to safe havens, we are going to have to have agreements with other countries to coordinate and have a plan. It is worth at least having a conversation to see what ideas could look like. From a corporate perspective, I am in support of Yellen's global agreement on corporate taxes, which sets a 15% minimum that companies must pay in jurisdictions where they operate. If elected, I would be in support of passing this deal which Congress has not taken up. Corporations need to be paying their fair share to be using the resources of wherever they are operating. It is a direct investment into the communities they are working in. I am also in support of a wealth tax such as Senator Warren has proposed. There is no reason that someone that has over a billion dollars cannot pay 2-3% annually in taxes. It ensures they are contributing to society. They are making their money off the backs of people so they should be contributing and investing through a wealth tax to the well being of everyone and making sure essential utilities and infrastructure are functioning.” 

Please consider contributing to Witkop's and Wilson's campaigns by clicking this link.