On September 24, 2019, Robert Frank writes on CNBC:
- Sen. Bernie Sanders announces a wealth tax that would hit multibillionaires like Jeff Bezos especially hard.
- Rival presidential candidate, Sen. Elizabeth Warren, has a plan that would impose a tax of 2% of wealth over $50 million and 3% on wealth over $1 billion.
- Sanders’ plan starts at a lower wealth level – taxing those worth $32 million at 1% – so his tax would hit about 180,000 families while Warren’s would affect about 75,000 households.
- The sliding scale of the Sanders plan quickly escalates for wealth over $500 million, which would be taxed at 4%.
- Here are estimates for the wealth tax bills for several billionaires under this proposal.
Amazon CEO Jeff Bezos announces Blue Moon, a lunar landing vehicle for the Moon, during a Blue Origin event in Washington, DC, May 9, 2019.Saul Loeb | AFP | Getty Images
Jeff Bezos would pay about $9 billion in taxes this year under Sen. Bernie Sanders’ proposed wealth tax.
As part of his presidential primary campaign and efforts to outflank the rise of Sen. Elizabeth Warren, Sanders announced a wealth tax that would hit multibillionaires like Bezos especially hard. The Amazon CEO would pay more in annual wealth taxes than the net worth of the 50richest Americans as listed by Forbes.
“I don’t think billionaires should exist,” Sanders told The New York Times. If his tax plan were put into effect, billionaires would lose half their wealth in 15 years, provided all other factors (like their stock prices or business values) remained constant.
While Warren’s proposal also taxes billionaires at a higher rate than multimillionaires, Sanders’ plan, announced Tuesday, is far more punitive to those at the very top — reflecting the strong support for taxing the rich among certain voters.
Warren’s plan would impose a tax of 2% of wealth over $50 million and 3% on wealth over $1 billion. Sanders’ plan starts at a lower wealth level – taxing those worth $32 million at 1% – so his tax would hit about 180,000 families versus about 75,000 households under Warren’s proposal.
The sliding scale of the Sanders plan also quickly escalates for wealth over $500 million, which would be taxed at 4%. Wealth over $10 billion would be taxed at a rate of 8% — more than four times the highest wealth-tax rates that European countries once imposed. The high rates at the top are the main reason Sanders projects his tax would raise $4.35 trillion over 10 years, compared with Warren’s, which is estimated to raise $2.6 trillion.
Here are some examples of the annual wealth tax bill that some of today’s top billionaires would pay, in addition to whatever income taxes, property taxes and payroll taxes they already pay.
2019 wealth tax bill estimates
- Jeff Bezos — $9 billion
- Bill Gates — $8.6 billion
- Warren Buffett — $6.6 billion
- Mark Zuckerberg — $5.8 billion
- Larry Page — $4.8 billion
- Charles Koch — $4.8 billion
- Larry Ellison — $4.7 billion
- Sergey Brin — $4.6 billion
- Rob Walton — $4.2 billion
- Jim Walton — $4.2 billion
Note: Estimates are based on the net worth of each individual as reported by the Bloomberg Billionaires Index.
Bernie Sanders Comments:
For too long, a handful of billionaires like Jeff Bezos have hoarded more and more wealth and rigged the rules in their favor while working Americans have fallen behind. By taxing the extreme wealth of multibillionaires like Bezos, we will raise the revenue we need to fund universal childcare and affordable housing, and help fund Medicare for All.
Gary Reber Comments:
Bernie Sanders is failing to see the solution to economic inequality that preserves the right for every person to own productive property, while putting up barriers to concentrated capital asset ownership. His proposals do not broaden wealth-creating, income-producing capital ownership, but instead are all about redistribution. We need to start addressing distribution of FUTURE formations of capital wealth.
If we understand the source of substantial wealth is the ownership of wealth-creating, income-producing capital assets it seems to me that we should be figuring out financial mechanism to empower EVERY child, woman, and man to become a productive capital owners. Yet, the idea of broadening the ownership of productive capital simultaneously with the growth of the economy is never addressed. I think we should be asking WHY NOT?
A progressive wealth tax is the most direct tool to curb runaway wealth concentration, BUT is does not solve the structural concentrated capital asset ownership problem in the United States. We need to reform the monetary and tax system to empower EVERY child, woman, and man to become owners of the future productive capital assets formed and create barriers to prevent the concentration of capital asset ownership, which is how the relatively few multi-millionaires and billionaires get wealthy.
While Sanders acknowledges the importance of workers owning the corporations that employ them, unfortunately he has yet to advocate his position openly in speeches, interviews, press conferences, debates or political ads. Nor has he expressed any understanding of how this ownership concept can be extended to empower EVERY child, woman, and man to become a productive capital asset owner along with the responsible growth of the economy.
Sanders should realize that the core reason the top 1 percent receives virtually ALL FUTURE income gains is because the top 1 percent are the very people that OWN America, with the bulk of the capital asset owneship concentrated among the top .1 percent of the American population.
What Sanders needs to do is to aggressively advocate for unrigging the system with reforms that will empower EVERY child, woman, and man to acquire personal ownership stakes in the FUTURE productive capital assets that will propel our economy’s growth. I am not referring to unproven small business or entrepreneurial endeavors, which, however would be significantly strengthened as the overall economy produces an expansion of “customers with money” to create demand. The primary focus needs to be on the already successful businesses growing our economy. I believe that if Bernie Sanders fully embraces this policy direction, as he has clearly targeted concentrated capital asset ownership and its corresponding political power as the cause of economic inequality, he will win the primaries and the presidency, while more effectively realizing the political revolution that is long overdue to put all Americans on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
Sanders does not have to stretch his thinking much farther, as he already is a strong supporter of empowering workers to become owners of the business corporations they are employed by, using the proven financial mechanism known as the Employee Stock Ownership Plan (ESOP), which provides a pre-tax pay-back mechanism to finance worker ownership (as individuals) without ANY loss of wages or benefits or requirement of past savings, and with the newly issued stock purchase-financing paid for with the full earnings of the investments in a corporation’s growth. (See http://www.cesj.org/learn/capital-homesteading/ch-vehicles/employee-stock-ownership-plans-esops/)
But we must not limit broadening capital asset ownership to employees of corporations as there are tens of millions of Americans who do not work for a for-profit business corporations, such as workers in small businesses or government positions, or who are unemployed, under-employed or unproductive, on welfare or who are senior citizens with only meager Social Security income, which effectively reduces their life to a struggle to meet day-to-day, week-to-week, and month-to-month demands.
Instead of the OWN the FUTURE or BE OWNED issue being presented, all one hears from both sides of the political spectrum is: “We will provide JOBS and put Americans back to work and raise the minimum wage!” While that sounds good, it is, in fact, terribly shortsighted. With the U.S. population continuing to climb and the rate of job-devouring automation and robotics exponentially skyrocketing, along with the job-destroying and wage-devaluation forces of globalization due to American businesses outsourcing or off-shoring their parts and finished products manufacturing, an individual’s or family’s 100 percent reliance on “JOBS” for subsistence will soon be totally outmoded. This means that your children and their children will be faced with unimaginable economic insecurity in the FUTURE, regardless of educational achievement, if the system is not reformed to empower them to become productive capital owners, and prevent those who already hoard the capital asset ownership of America from monopolizing ALL FUTURE ownership of America’s capital asset growth.
This is not to say that education, and tuition-free public colleges and universities (as Sanders advocates) is not an important mission, but except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family and purchase a home or prevent a lifestyle which is gradually being crippled by near poverty or poverty earnings. Thus, education is not the panacea, though it is critical for our future societal development to innovate and invent future technologies of production. Furthermore, younger, as well as older people, will increasingly find it harder and harder to secure a well-paying job — for most, their ONLY source of income — and will find themselves dependent on taxpayer-supported government welfare, open or disguised, or concealed.
Our visionary politicians would best serve us by devising plans that involve ownership of the capital asset producing corporations of the United States economy, in particular the large corporations responsible for producing the bulk of the goods, products, and services bought by Americans, without penalizing the wealthy class to do so. The Center for Economic and Social Justice (www.cesj.org) has solutions that make sense and which cross party lines quite easily. One of CESJ’s core policy proposals is to enact the Capital Homestead Act, also known as the Economic Democracy Act and adopt the Unite America Platform. This will empower EVERY child, woman and man to acquire personal ownershi[ stakes in the FUTURE capital asset wealth of the American economy, without the requirement of past savings or ANY reduction in wage earnings or benefits, using insured, interest-free capital credit, repayable with the FUTURE full earnings of the investments in the viable corporations growing the economy. (See http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/). Also see the Unite America Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html.
These proposals clearly demonstrate that most people are wrong to take for granted that the only way to finance new capital asset formation (not risky investment in already-owned stock speculation) — and thus widespread capital asset ownership and control — is through cutting consumption and accumulating money savings, thus assuring that ONLY the already rich can afford to finance new capital formation, and as a result the richer they will get. “Past savings” are by definition, the virtual monopoly of the rich. The solution is saving in the future to finance new capital asset formation now. In other words, we need to switch from financing with money withheld from consumption in the past, to financing with the present value of what is reasonably expected to produce in the future. That way, nothing is taken out of anyone’s pocket now, and anybody who comes up with a financially feasible project should be able to get financing for it.
We don’t need the rich to finance new capital formation. To finance new productive capital using “future savings,” it is only necessary to have a feasible capital project ready to start building. The present value of the project can be put into contract form (a “bill of exchange”) and either used directly as money to finance the new capital formation, or taken to a commercial bank and discounted, using newly created bank promissory notes as new money in the form of demand deposits (“checking accounts”). To make things less risky and ensure a uniform, stable, and elastic asset-backed reserve currency, the Federal Reserve Bank would rediscount such qualified paper, with the central bank’s promissory notes substituted for or backing the commercial bank’s promissory notes.
In other words, all that is necessary to finance new capital formation without the rich is feasible capital projects that can pay for themselves out of their own future earnings, and a banking system to provide media of exchange that are recognized as uniform and stable. Significantly, if new capital asset formation can be financed without using past savings, that means the rich are not needed in order to become an owner of productive capital…and that means that every child, woman, and man — regardless whether she, he, or it has savings now — can use “future savings” to become an owner without taking anything away from “the rich” or penalizing success, while at the same time becoming good “customers with money” to create demand for the responsible and “green” growth of the economy.
Using this method of finance is preferable to form new capital assets using the present value of the anticipated future stream of income and wealth embodied in a “bill of exchange” contract. Present value can be turned into “money” by contract, and this contract can be used to purchase new productive capital that repays its purchase price — “self-liquidating.” This will enable corporations with “feasible capital projects” (meaning they pay for themselves out of their own profits) to grow without having to retain earnings — instead, earnings can be fully paid out to the people to whom they belong: the shareholders. The new capital wealth creation, represented by new issues of stock (directly tied to ownership and control sharing) can be financed to benefit anyone (whether employed or not) without first having saved. This should be an equal opportunity right to interest-free capital credit.
The role of capital credit insurance facilitated with private insurance or a government reinsurance agency (ala the Federal Housing Administration concept) would serve as the replacement for past savings collateral to protect the commercial bank in the event of a failure of the capital project to produce the expected FUTURE earnings that would be used to pay off the capital credit loan. Thus, national capital credit insurance would replace the requirement for pledged security, allowing employees and non-employees (EVERY citizen within the system) to become new capital asset owners simultaneously with the growth of the economy, while eliminating the sole ownership of America by the few.
To win the presidency, Bernie Sanders needs to advocate for the enactment of this proposed legislation that will effectively empower EVERY citizen to become a productive capital OWNER without the requirement of past savings or ANY reduction in wage earnings or benefits.
If our politicians would, for a moment, bury their hatchets and open their minds and examine the ideas outlined by the CESJ, the voters in our country would be getting far more than just jobs and increased minimum wages, or falling into dependency on the State and whatever elites control the coercive powers of government for their economic well-being, and benefit from a long-term policy direction that will provide economic security to EVERY citizen and their heirs, as we build a FUTURE environmentally responsible economy that can support general affluence for EVERY child, woman, and man.
