Many rightly took offense at Jeff Bezos’ gleeful gloating upon return from his 11-minute joy-ride into space: “I want to thank every Amazon employee and every Amazon customer because you guys paid for all this.”
Indeed, just during the pandemic, Bezos realized an $86 billion increase in fortune, becoming the first person in history worth more than $200 billion; in all, billionaires added $1 trillion to their wealth during the pandemic.
Meanwhile, Amazon scored a record $20 billion in profit in 2020, but paid 9.4 percent tax rate – a pittance compared to what a teacher pays in income tax – yet was the first time Amazon paid more than zero in tax since 2016; 55 of the Fortune 500 companies paid no tax.
“Just days before Bezos launched into space, a sobering new report was released showing that a full-time worker would need to make at least $24.90 an hour to afford rent for a two-bedroom apartment in any state in the country,” Sen. Elizabeth Warren wrote. “Which means that many of those workers who paid to send Jeff to space can’t afford to pay for housing with the paycheck they receive from Amazon.”
Indeed the ratio of CEO-to-typical-worker compensation was 299-to-1 in 2020; compare this to 21-to-1 in 1965 and 61-to-1 in 1989. In 2020, worker pay went up just 1.8 percent, while CEO pay, helped by surging stocks, rose 16 percent.
I have no problem with mega-billionaires Jeff Bezos, Richard Branson and Elon Musk funding innovation and spurring new industries and enterprises. But I do have a problem with how they exploit the tax code, their workers and even their customers in order to amass such fortunes, which today, are equivalent to political power. Because our government at every level – federal, state and local – is starved for resources, our collective society is increasingly in the position of begging billionaires to fund everything from public education to health care to infrastructure.
It is like Charles Dickens’ Oliver begging with his empty bowl, “Please sir, can I have some more?”
As Jeff Yang notes in the New York Times, “Being Superrich Doesn’t Make You a Superhero.” “America is hardly the only place that sees the rich as a special breed that plays by special rules. But America’s brand and ‘American Dream’ mythology are anchored in the valorization of individual success’.” (www.nytimes.com/2021/06/20/opinion/rich-musk-gates-bezos-comics.html)
In other words, in the capitalist myth based in Calvinism, the rich are rich because they are better than the rest of us and deserving of their power and success (the justification for “trickle-down” economics and tax policy) and not because they ruthlessly cheat or shamelessly exploit loopholes, or just happened to be in the right place at the right time. (Bezos and Musk’s wealth alone exceeds the combined wealth of the bottom 40 percent of all Americans; the top 0.1 percent own wealth equivalent to the bottom 85 percent.)
Masters of the Universe? As Propublica reported, “The 25 richest Americans, including Jeff Bezos, Michael Bloomberg and Elon Musk, paid relatively little — and sometimes nothing — in federal income taxes.” (https://www.nytimes.com/2021/06/08/us/politics/income-taxes-bezos-musk-buffett.html)
How? One way is that they don’t actually get paid an “income.”
Instead, they exploit tax loopholes such as taking unlimited revolving loans based on projected increases in their assets to pay for their lavish lifestyles like taking a rocket ride into space (interest on the loan is tax-deductible, too).
“Jeff Bezos is the second-richest person in the world. His net worth is nearly $195 billion dollars. But his salary is about the same as the average public school teacher in Massachusetts: $80,000. Taxing income alone won’t make him pay his fair share. It’s time for a #WealthTax,” Sen. Elizabeth Warren tweeted.
But besides being a progressive pipedream that will never be adopted into law, a wealth tax is unworkable because so much of wealth is in the first place not liquid and so transitory.
It’s hard enough to assess home values for local property tax, how would you annually assess billions worth of property? Some have said that if they pay tax on increases in wealth in one year, would they get a refund when values fall?
Would Bill Gates have to sell off a mansion or a yacht each year to pay the tax or just give title to the U.S. Treasury?
Instead, more practical approaches would be to adapt the Alternative Minimum Tax which is used against middle-class taxpayers for current reality; go after the billions that are hidden in off-shore tax havens; enable the IRS to pursue the $1 trillion in uncollected taxes; and reassess how capital gains are assessed and taxed.
Similarly, corporations are able to evade taxes – $70 billion a year by offshoring income to tax havens, alone. Biden has proposed raising corporate tax (from the absurdly low 21% when few pay more than 8 percent anyway) and has garnered support from the G-7 on a global minimum corporate tax of 15 percent.
The wealth imbalance is more than a matter of lifestyle and the ability to afford a rocket ride into space.
Billionaires and corporations through their political contributions, the lobbyists they can buy and their “philanthropy” increasingly determine policy and shape society. Increasingly, that spending goes toward voter suppression, election subversion; deregulation that endangers climate and environment, public health and consumers; and laws countering climate change, sustainable infrastructure spending, gun control; and tax policy to protect their wealth (and power) from income and inheritance taxes.
As Jane Mayer reports in “The Big Money Behind the Big Lie,” in the New Yorker, a few billionaire-supported foundations – the Bradley Foundation, Heritage Foundation and ALEC – are funding the Big Lie movement, the Arizona fraud and countless other campaigns to recount (throw out) votes in Democratic-leaning counties, voter suppression/election subversion legislation and propaganda. (www.newyorker.com/magazine/2021/08/09/the-big-money-behind-the-big-lie)
The Supreme Court’s absurdly decided Citizens United, which basically equates cash with speech (“Money talks!”), needs to be overturned.
But there also should be limits placed on how much a candidate can raise from outside their voting constituency, let’s say not more than 20 percent. Yes, that is truly radical, but elections should be fought on behalf and by actual constituents, instead of being nationalized and financed by the deepest pockets.
Here’s another change in campaign finance law: corporations, unions or foundations should not be allowed to make any political donations without getting approval of their shareholders and stakeholders (such as employees).
Such a standard should follow from the Supreme Court’s 2018 decision requiring consent to charge for union dues. Shareholders in Home Depot, for example, could see a drop in their returns as a result of the company continuing to fund Republican candidates who voted to overturn the 2020 election.
In effect, these ultra-wealthy and corporations are using taxpayer subsidies to fund their political activity.
