Of course, the first comment on the comic is this BS:
Nobody gets to be a billionaire without creating something that millions, even billions, of people want and pay for. If you don’t like billionaires, then trying living your life without everything they’ve made possible for you.
Reassuringly, that commenter will never be a billionaire, because he fundamentally misunderstands how one becomes a billionaire. It’s not by creating something, but by figuring out how to profit off the labor of others.
Yeah, Romney sure created a lot of stuff, didn’t he. Well, hollowed-out companies, that’s what he created.
Swoop in, vulturize what other people with actual talent create, exploit it until it’s a drained husk, cut it loose, use the profits to repeat. That’s how you become a billionaire.
A comment somewhere that I particularly liked was that “somehow, 1% of the humans have figured out how to get the other 99% to work for them while they do nothing.”
How to become a millionaire ,persuade a million people to give you a £ .
Enough of filthy lucre ,just been to a cat rescue place and re-homed a mother and her kitten .
They are both acting like J D Salinger at the moment ,they might come out when they are hungry .
Exactly like J D Salinger in fact .
Being born into it certainly helps. Do you think that Trump would have become a so-called billionaire if he couldn’t have grifted off of his father’s success, with the news believing he owned buildings that his father did? How about the $1.4 billion that he got from his dad? He wouldn’t have even been able to become a middling grifter. Ivanka and Don Jr. would be additional nobodies, as would Jared Kushner. Same deal with the infamous Koch brothers.
Fair enough, but it doesn’t have any merit as an actual cartoon.
If my calculations are correct a wealth tax of 2.5% would – if the fortune didn’t grow at all – reduce a fortune of a billion dollars to a fortune of fifty million dollars in 120 years. The fortune would likely be growing, and quite possibly at a higher rate than 2.5%, and fifty million dollars is still rich by any relevant definition. I very much believe that in return for being allowed to exist billionaires should be willing to pay an annual tax of 2.5% on their accumulated wealth (exempting the first fifty million, we don’t want to be punitive after all). And 5% doesn’t feel unreasonable to me….
No billionaire can own a single Rolls Royce or a single yacht without the people who clean toilets or remove garbage from offices and factories. Almost the entirety of the billionaires’ happiness depends on the people who they treat like shit.
What was Rockefeller’s big innovation that led him to acquire almost complete control of the oil industry? New mining method? No. New Processing method? No.
Bribes to the railroads that delivered all the oil so that they would refuse to ship his competitors oil, bankrupting them and allowing him to buy them up at fire sale prices? Bingo!
The comment is half right. We all pay for the billionaires. We just don’t necessarily want to.
profpedant@6, Whilist I don’t disagree — I haven’t checked the calculations — it immediately strikes me there are two inputs which are being overlooked (in no particular order): (1) Inflation; and (2) What consitutes “Wealth”?
To wit: The calculated 120 years appears to presume the agreed valuation of a unit of currency doesn’t change. That is not currently the case; the value deflates, so more units are needed to obtain the same whatever (ignoring efficiency gains and so on).
And: Suppose I have a stock profilio which, if sold in its entirely at the current valuation, is, say, 10$ million (total revenue before tax, which is not the same as profit, but I digress). Two-ish months ago, before the current crash, the valuation would have been, say, 35$ million (total revenue before tax). (ALL figures here are hypothetical!) So is my “Wealth” 35$m, 10$m, or the cash I currently have in hand (physically and in my bank account(s), and, for convenience, presuming it’s all in US$), say, 0.5$m?
Here in France, there is a “Wealth tax”. Details at Process and place for declaring wealth tax (English), but the abridged summary is: “Impôt de solidarité sur la fortune (ISF) […] is an annual progressive tax, with rates from 0.5% to 1.5%, and liability is triggered when your net personal wealth is greater than €1.3m, when it is then applied on net assets above €800,000″ (from French Wealth Tax). As that link notes, the tax has been tweaked and is now even harder to qualify for (to pay), but still tends to equate “Wealth” to “assessed real estate value”. A thing to note, of course, is the (top-end) rate isn’t too different from the suggestion in @6.
I myself would suggest — and this is orthogonal (independent) of a “Wealth” tax — a Finnish-style scheme where, broadly speaking, tax returns are public, available to all.
you know I’m beginning to think it is not about the money in the end.
Sure 50 million is rich and it would be real hard to spend it all on personal things like food and shelter and cloths and travel and playing around, that much a year is way more then you could spend on “living expenses” .
If there was a wealth tax as has been suggested it would not be the money that is threatened it is the political power and control that is threatened.
That is what the threat is as seen from those who have the wealth, They do not see themselves as equal they completely by into to class structures and demand it and think they deserve it. That is what they get so upset about and why they go all class warfare, they are right it is why they as demonstrated by their actions dislike and distrust democracy and have done so from the very beginning of the U.S..
Threaten the money and you threaten class and the power, without that level of wealth they are just one among many, there nothing wrong or dangerous about that but they do not want that, they want to be special they want to tell other people what to do they want people to kiss their asses, and that is what their wealth gives them.
no kings or lords or billionaires
uncle frogy
blf@10 I would certainly go for all tax returns being public. My reflexive approach to valuation of variable things like stocks would be their value at the end of the year the tax is being paid for (expect an annual dip in the stock market at the end of the year). Art and Real Estate and other ‘hard to value’ stuff would have a declared value (with ‘this is the price I paid for it’ being considered a pretty good declaration) – but with the twist that if the government believes the value you declared it was worth was too egregiously low the government would be able to buy it at the declared price. As for inflation, one could have a section of the law adjusting for inflation, so that once the value of the $50 million that you do not pay a wealth tax on has dropped to perhaps ‘$10 million constant dollars’ the exemption is recalibrated to be ‘$50 million constant dollars’ once again.
Shipping and handling. Or stores. That seems to be how most of these billionaires make their money. Get stuff in and sell it and ship it out. Walmart has its own trucking company to keep stores stocked. That and real estate. Building malls, Amazon is a store. Walmart is a mega-chain. Microsoft and Apple can at least be argued that they have product they make themselves, but even there it is a) debatable and b) 99% marketing, and delivery, ie. you buy it because you can get it. Starbucks is the same.
By comparison, it’s not too hard to become a millionaire. Beer, candy, pizza. Make it, sell it, make a few million and sell the company for millions more to someone who wants to be a billionaire. Just get out before the rot sets in or you start thinking why be honest and make a million when I can be scum and make ten million?
The problem isn’t really the disgustingly rich as much as the desperately poor. I used to think, taxing the rich is attractive but they aren’t that rich. Of course, that was a long time ago and now they are that rich. So there’s that. Still, the whole system needs to change.
The
Kaiser report says Biden’s going to bring back Larry Summers.
jack16
What do people think of some of the following near-(half)billionaires?
Enya
Bruce Springsteen
Roger Federer
J. K. Rowling
Stephen King
Michael Jordan
I go, yes they are rich very rich and successful but everyone of them would be just as successful and influential without much of the money their abilities earned them. the money has nothing to do with Michael Jordan’s ability to play basketball at championship level , ” The Boss” would still be “The Boss” with much less money. same with all the others, the money is what happens in this system. High taxes would not change what they do or what people think of it, which is how they got the money in the first place. it was their abilities that gave them importance with people not their wealth.
uncle frogy
All of them overpaid. Even if I quite like some of their work.
There are many musicians and writers and athletes who are just as talented, and who will languish in poverty. Just to pick on one, Rowling got lucky — she wrote something lots of people liked, for which she probably deserves a life of security and relative ease, but not something as extravagant as what she got.
Whenever someone leaves that “billionaires create things” comment, ask them what George Soros created. :)
An argument against tax returns being public is that People’s’ self esteem is tied up in how much money they make. People want their income to be private.
PZ, you hit upon some of what I was getting at. Those people all went viral, for some reason or another. But they certainly are not there because of the sorts of awful, exploitive behavior (e.g., Romney) that people usually bring up to dump on billionaires (or multi-millionaires). In fact, most of them worked way harder and/or overcame much more difficult obstacles than the billionaires/multi-millionaires we love to hate.
That said, I agree that they all could be equally comfortable with a lot less and that a “proper” tax system would even that out.
@5 Yes, it is a very odd little cartoon, more like an undeveloped idea for a cartoon. The sentiment is correct, as best as I can tell, but it isn’t clear. To this old man anyway.
But what is it about Americans and their love of billionaires? Surely 300 million people don’t really believe that one day they can all be billionaires? Has the mythology been so powerful?
@profpedant, I think the wealth tax should be more progressive than your example, so that billion-aires pay a lower rate than ten-billion-aires. Also I think everyone could pay something, even if they only have a few thousand dollars in the bank, if only a token amount, so that everyone’s invested. I do agree that all property should be included, and I kind of like your idea that something valuated low could be potentially bought for that value. Anyway, I think the annual wealth tax bill could be pretty simple, like say
tax = (wealth ^ 1.4) * 0.00007
where ^ mean exponentiation and * means multiplication. That would apply for anyone with 10.5 billion or less, and for anyone with over 10.5 billion would pay all but 3 billion, which is plenty to keep. A thousand-aire would pay about a dollar. Of course, it isn’t that simple, as there could be a minimum wealth for security deducted, inflation to account for, debt to subtract, valuations re-analyzed, and other details, but it would all be worth it.
P.S. I have read Piketty’s new book Capital and Ideology, and he introduces the idea of temporary ownership. You can earn lots of wealth but that does not morally mean you can keep it forever.
Even the ones who are associated with “new” things didn’t invent them: every major Microsoft product is a ripoff of some pre-existing product; Amazon is neither the first nor the best online store; regardless of whether you like Tesla or not, Musk did not actually start the business (he literally bought the title “founder” when he bought in).
@imback if every one has to pay something on their wealth then you prohibit the poor from building wealth.
Also income is an important factor. Low asset levels wont produce incomes.
Of course then you get to Adam Smiths vexatious rent seekers. Owning assets that produce income without any added value from their owner.
@DanDare, I agree with you. I said poorer people would pay a “token amount” just to be invested in their country. Also I said a “minimum wealth for security” could be deducted, by which I mean people can keep aside enough for an emergency fund. Adam Smith was similar to Thomas Piketty in that they both had no reverence for large property owners.
Almost as an aside, there was a paper discussed in Scientific American last year (I can’t remember the name offhand but may be able to look it up later) that explored a very simple economic model. Suppose you have a million people each with a thousand dollars. You choose two people at random to make a trade with one of them chosen at random winning some amount from another, with the caveat that neither could lose say more than 1% of their wealth on the trade but other than this cap the exchange is random. You then iterate with two other random people with a random winner. You do this for many iterations until you come to an equilibrium. The equilibrium you always reach is that one person has a billion dollars and the others are all broke. You can see this startling effect with just two transactions between the same two people. Say Al has $1000 and person Bo has $1020, having won earlier trades. The amount they risk is $10, i.e. the 1% cap of Al’s wealth. In scenario 1, Al wins the first trade, so has $1010 as does Bo, but then Al loses the second trade of $10.10, so has $999.90 after two trades. In scenario 2, Al loses the first trade, so has $990 with Bo having $1030, but then Al wins the second trade of $9.90, so again has $999.90 after two trades. So despite Al being just as ‘talented’ as Bo in winning half his transactions, Al lost $0.10 and may be on his way to the poorhouse while Bo may be on his to being a billionaire. The model, despite seeming fair, is tilted to those with wealth. Sound familiar? (By the way, the paper goes on to make simple modifications to the model to fit inequality curves seen in various countries. I do have to look that up now.)
Numbers in computers, pieces of paper, pieces of metal. Not people. If billionaires mess things up bad enough currency may not mean anything.
@26 that fact is often over looked.
uncle frogy
Let’s suppose, arguendo, that the billionaires contributed so much social value that they did earn their wealth. But what about their kids? How did their kids earn what they will inherit? They didn’t. Yet our society is constructed to promote inheritable wealth. Oddly, conservatives rail against welfare recipients who don’t earn their living, but genuflect toward billionaires’ kids who … don’t earn their living.
I’ve proposed this elsewhere, in my series of postings on “The Republic” over at stderr, but society could take the view that the wealthy person is rewarded for their actions during their lifetime but 100% of it is returned to the common wealth upon the earner’s death. This would result in a wealthy society that could afford to offer all children a fair starting impetus, regardless of birth.
The US’ inheritance system was arranged for and by people who expect to transfer large amounts of heritable, unearned, wealth to their children, which guarantees an oligarchy and systematic inequality. Piketty is given a lot of lip-service for figuring this out, but the wealthy figured it out and systematized it before Piketty was born.
@28 And this essentially maintains the British feudal system of the “nobles” having titles, wealth and land which is in turn passed on to offspring through the generations. America didn’t get rid of this system, as their mythology claims, but merely removed the title part.
I’m so over the deification of competition and endless struggle as the foundation of economic discourse. I think I remember a talk given by PZ (in Melbourne 2012 maybe?) where the point was made that humans’ greatest social asset was cooperation. Pity cooperation really doesn’t suit our capitalist overlords.
Wealth is NOT a marker of worth.
Billionaires – the kids that used to snatch all the toys.
When of Ayn Rand’s most destructive accomplishments was convincing a significant portion of post-WWII America that civilization is incapable of functioning without the “achievers” that “moved the engine of the world.” According to her… ahem… “philosophy” the mediocre who did the actually labor were incapable of managing business or industry, and it would fall into ruin if they tried. Nor should we count upon the “achievers” to create for the benefit of all rather than individual reward. because that would mean sacrificing their time and talent to the undeserving and, and Rand constantly put it, “man is not a sacrificial animal.” Instead, we shouldn’t burden the “great men” with taxes or regulations and let them carry on as they please, or else they have every right to take their ball and go home… or to Galt’s Gulch.
And thus, thanks in part to a lousy, sociopathic novelist, we have created tiny class of super-wealthy people for whom the government bows and kowtows before while we have an economy that exists only to serve them rather than the people.
@15
on further thought on that list of examples I asked myself where did the money come from?
I looked at the music business, all the performers demanded to be paid large sums from record companies who manufactured and sold the recordings of performances for a price as high as the market would bare for an enormous profit. the artists demanded a share of the money for their labor the money came not from the art but from marketing it by the recording companies.
Their is enormous profit in marketing sports from attendance at events but the lion’s share comes from the money paid by advertisers who use the broadcasted events to sell products of all kinds. The athletes should be well paid for what they do.
The publishing business is similar to the recording business the books are sold for as much as the market will bare and the artists should get a fair share of the profits from their labor, but the lion’s share goes to the publishers.
It looks to me that in the examples given above it is a matter of degree that it is a story of pimps and whores.
uncle frogy