"Everybody" Agrees: Tax The Rich... Except The Rich, Who Don't Even Agree That They Are Rich

The Rich Have The Financial Means To Buy Political Power

There are a lot of things that Barbara Lee (D-CA), Summer Lee (D-PA), Rashida Tlaib (D-MI) Jamaal Bowman (D-NY), Jerry Nadler (D-NY), Chuy Garcia (D-IL), Raul Grijalva (D-AZ), Ilhan Omar (D-MN), Jan Schakowsky (D-IL) and Jared Huffman (D-CA) have in common, all of them good. And one of those things is that they are all sponsors and co-sponsors of the Oligarch Act (Oppose Limitless Inequality Growth and Reverse Community Harms). The purpose is to create an annual wealth tax focused exclusively on containing destabilizing inequality in America and ensuring the viability of democratic capitalism for the next 250 years. UPDATE: More co-sponsors of the Oligarch Act: Bonnie Watson Coleman (NJ), Jamie Raskin (MD), Cori Bush (MO), Valerie Foushee (NC), Eleanor Norton (DC), Madeleine Dean (PA), Maxwell Frost (FL), Katie Porter (CA) and Andrea Salinas (OR).

“Economic inequality in America,” wrote Barbara Lee and Abigail Disney, “has reached heights not seen since the Gilded Age, when “robber barons” like Andrew Carnegie, John D. Rockefeller and Cornelius Vanderbilt amassed their infamously large fortunes. America’s 735 billionaires now hold more wealth than the entire bottom half of the country. Over the course of the pandemic, America’s billionaires increased their combined wealth to nearly $4.7 trillion. And, if that’s not enough, there’s talk that America (and the world) may soon see its first trillionaire. This extraordinary concentration of wealth in so few hands is concerning to us for many reasons, but primarily because of the destabilizing effect that it has on our democracy. As the rich have gotten richer over the last few decades, they have used their wealth to dominate the campaign finance system. In the 2022 midterm elections, billionaires contributed no less than $1 billion to candidates’ campaigns and super political action committees (PACs)— more than 300 times what they spent just over a decade ago. During the 2020 election cycle, the top 20 billionaire donors spent $2.3 billion, or more than twice as much as the entire Biden campaign. They’ve gone a step further than traditional campaign finance, though. Recent reports have revealed that they’ve even tried to use their fortunes to cozy up to Supreme Court justices. Lavish vacations, luxury fishing trips, tuition payments and real estate deals are all means to an end for billionaires trying to score wins with the nation’s highest court before it hears a case about whether those same billionaires should be taxed reasonably. In return for their massive political contributions, America’s wealthiest have received a system of government that caters to their every whim and wish. If a political donor calls a member of Congress, their offices are three to four times more likely to make room in their schedule than they are with their regular constituents. Consequently, public policy outcomes have come to largely reflect the interests of the wealthy and well-connected.”

The proposal has 4 wealth brackets, based on median wealth of an American family ($120,000). So nothing kicks in for anyone with less than $120,000,000:

• 2% for all wealth between 1,000 and 10,000 times median wealth 

• 4% for all wealth between 10,000 and 100,000 times median wealth

• 6% for all wealth between 100,000 and 1,000,000 times median wealth

• 8% for all wealth over 1,000,000 times median wealth

Even the highest tax rate (8%) is only charged for people who have accumulated $120 billion. In the U.S. that would be just Elon Musk. The only Americans who come even close (over $100 billion) are Jeff Bezos, Larry Ellison, Warren Buffett and Bill Gates. The late Supreme Court Justice Louis D. Brandeis once said, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” 

So what brought this on? Two things. I’ve been interviewing a lot of congressional candidates lately, all Democrats. Some have said they would sign on to the bill if elected— and some have… punted. One candidate who totally understands the act and is enthusiastic about it is Cheyenne Hunt, a Gen Z candidate running in Orange County and likely the democrat who will be up against Michelle Steel in November. (Blue America is in the final stages of our endorsement process but you can contribute to her campaign here). She told me that “Extreme wealth inequality tears at the fabric of our society, undermining the very essence of the American Dream’s fundamental promise: Opportunity. It's not just a social issue; it's an economic hurdle that hampers mobility and stifles innovation. Supporting the Oligarch Act is a no-brainer for any representative who cares about addressing rampant wealth inequality. It’s a common sense measure to make sure the ultra-wealthy pay their fair share.”

Aside from being inspired by Cheyenne Hunt, was something I read by Anoosh Chakelian in The Guardian a few days ago, Britain’s richest 10% don’t think they’re wealthy– and that’s disastrous in the fight against inequality “What does it mean to be ‘wealthy’?” she began. “It is perhaps this question more than any other that haunts British society. The public’s definition can be glimpsed in the reaction to Labour’s mansion tax idea for properties worth more than £2m in 2015, or its proposal for a 45p tax rate on earnings over £80,000 in 2019: a revolution of polite but pushy well-to-do Britons (and a Conservative election victory) never seemed to take long to follow.”

“The median salary in the UK before tax is £34,963… [M]any in the top 10% of earners– those on £59,200 and above– do not feel rich, and that has major societal consequences. First, the feelings of this group matter because they are simply more likely to vote, to trust in political institutions, and to influence our laws, as the academics Gerry Mitchell and Marcos González Hernando found in their 2023 book about the top 10%, Uncomfortably Off. Second, the nuances in public attitudes towards wealth, salary and class must be understood by our politicians because they make it very difficult for parties to pitch wealth taxes, raise taxes on higher incomes, or land attacks on wealthy individuals in public life– and they are also key to understanding something profound about the British psyche.”

No matter where you sit on the scale, you generally tend to underestimate how much you earn compared with the average, and you are more likely to feel your social circle is “better off”, and yourself “worse off.” This makes particular sense in the case of the top 10%, who are often working in jobs– as lawyers, consultants, recruiters and financiers– that expose them to people far richer than themselves. In the scheme of the haves, have-nots and “have yachts”, they see themselves as the “have not yachts”. Perry voices this very bias in his interview with The Telegraph: “Charging VAT won’t hurt the wealthy students attending public schools like Winchester, where Mr [Rishi] Sunak studied. It will hurt many others, however.”

Yet perception isn’t the only thing at play. There is real inequality high up the income scale. While certainly not the most egregious economic divide in our country, the top 1% are pulling away from the top 10% at a drastic rate.

The Uncomfortably Off authors reveal that even those in the top 5% (earning £82,200 and above) are much closer to the national median than to the top 1% (£183,000 and above)– where wealth is rapidly accumulating. The Labour MP Liam Byrne’s new book, The Inequality of Wealth, details how the average wealth of an individual in the top 1% of Britain’s richest increased 31 times more than that of those in the bottom 99% between 2010 and 2021. Overall wealth in the UK rose £4tn in the same period– nearly a quarter of which went just to the top 1%.

However you feel they should spend their money, it is little wonder, then, that the Tony Perrys of Britain feel as if their lifestyle is slipping away from them. The challenge for politicians aiming for a fairer Britain is to make this section of society care about inequality in general, rather than simply who gets to afford which private school.

Decades ago, a very rich guy hired me to work for his company, which had been bought by a bigger company but which he still ran. His annual salary was well over a million dollars and his net worth was something in the realm of $40 million and growing. He was convinced he was poor, hated everyone who made more than he did and felt entitled to steal tens of thousands of dollars from the company because, he reasoned, they treated him so badly. He constantly borrowed money from me, though I wasn’t in the 6-figure realm at the time. I was shocked when it finally dawned on me he wasn’t pretending or joking and that he actually saw himself as financially deprived and angry that he had been dealt such an unfair hand. How do you think he’d feel about a wealth tax? (Oh, and did I mention he cheated on his taxes?)