Tags: billionaires | sanders | taxes | warren

Wealth Could Be Costly Liability in 2020

senators bernie sanders independent of vermont and elizabeth warren democrat of massachusetts

Sen. Elizabeth Warren, D-Mass. and Sen. Bernie Sanders, I-Vt., during a news conference on Capitol Hill in Washington, D.C. on Weds. Sept. 13, 2017. They were unveiling their Medicare for All legislation. (Andrew Harnik/AP)

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Monday, 28 January 2019 02:27 PM Current | Bio | Archive

Coming soon to a Democratic Party presidential debate: the question, "Is it morally appropriate for anyone to be a billionaire?"

A version of the query was raised earlier this month by the author Ta-Nehisi Coates. He was interviewing a new Democratic congresswoman from New York, the self-described socialist Alexandra Ocasio-Cortez, about, among other things, her plan to raise top marginal income tax rates as high as 70 percent.

Talking about the tax rate, which would nearly double the current top federal marginal rate of 37 percent , Ocasio-Cortez replied, "It’s an economic question but it’s also a moral question.  . . . It’s saying, where do we draw the line in excess?  . . . Maybe this idea of idealizing this outcome, of maybe one day you too can be a billionaire and own more than millions of families combined, is not an aspirational or good thing."

Coates followed up, "I hate to personalize this, but do you think it is moral for individuals to, for instance — Do we live in a moral world that allows for billionaires? Is that a moral outcome?"

The answer from the congresswoman was emphatic and came without any hesitation. "No, it’s not. It’s not. It’s not. And I think it’s important to say that."

She cautioned, "I don’t think that necessarily means that all billionaires are immoral. It is not to say that someone like Bill Gates for example or Warren Buffett are immoral people, I do not believe that.  . . . but I do think a system that allows billionaires to exist, when there are parts of Alabama where people are still getting ringworm because they don’t have access to public health, is wrong."

The factcheckers pounced to point out that the public health problem in Alabama is hookworm, not ringworm. But the larger point looms nonetheless.

It won’t be the last time the issue comes up, at least if the congresswoman and her team have anything to say about it. Her policy aide, Dan Riffle, has a Twitter account named, "Every Billionaire Is a Policy Failure."

Riffle responded on Twitter to the Coates interview, which was at a Riverside Church event marking Martin Luther King Jr. Day, "My goal for this year is to get a moderator to ask 'Is it morally appropriate for anyone to be a billionaire?' at one of the Dem primary debates."

It’d be a particularly interesting question on which to hear from a variety of the other presidential candidates, both actual and potential.

Senator Bernie Sanders, like Ocasio-Cortez a self-described socialist, got impressive traction but not the nomination in the 2016 primary in part by talking incessantly about "billionaires."

Sen. Elizabeth Warren, D-Mass., rejects the socialist label but, campaigning in Puerto Rico recently, complained, "the rich and powerful are taking so much for themselves and leaving so little for everyone else."

Warren proposes a 3 percent annual wealth tax on those with assets of $1 billion or more.

And then there is Michael Bloomberg, who could have retired comfortably at 40 on his $10 million Salomon Brothers severance, but chose instead to work hard and risk his own capital on a financial technology startup, crawling under desks on weekends on floors littered with old McDonald’s hamburger wrappers and mouse droppings to run computer cables for clients.

Another billionaire, longtime Starbucks coffee CEO Howard Schultz, says he is considering a presidential run as an independent. Schultz grew up in public housing in Brooklyn and was the first in his immediate family to attend college.

Republicans, including President Trump, who has his own fortune, often have trouble finding the right language to defend wealth.

Maria Bartiromo of Fox News Channel and Fox Business Network offered a hint some directions Republicans are likely to go in when she, on Fox News, described the remarks by Ocasio-Cortez as "quite naïve." She pointed out that rich people already pay a large share of federal income taxes.

She defended the billionaires in part by talking about their philanthropy, speaking of Kenneth Langone’s support for New York University’s medical school, Hank Greenberg’s support of New York-Presbyterian Hospital, and Stephen Schwarzman’s support for the New York Public Library. Such philanthropy sometimes strikes leftists as undemocratic; they’d rather this money be allocated by Washington politicians elected by the general public than by the people who earned it.

Bartiromo also warned that confiscatory tax rates could hurt productivity, "Are you gonna work really hard, if you know that at a point, you will have to give it all to the government? I don’t think so." This is a point not only about economic productivity at the national level, but about cultivating the individual virtue of hard work — "industry," as Benjamin Franklin called it.

Bret Stephens made a pragmatic and utilitarian case in the New York Times over the weekend, in a column about Venezuela, "All of this used to be obvious enough, but in the age of Alexandria Ocasio-Cortez it has to be explained all over again. Why does socialism never work? Because, as Margaret Thatcher explained, 'eventually you run out of other people’s money.'"

Is the Democratic fixation with the billionaires (problem) and taxes (solution) much different from the Trump fixation on immigrants and the border wall? It’d sure be nice to have a moderator ask, and the candidates answer, some of those questions, too, in the 2020 presidential debates.

Unless some politician or thinker can come up with a better answer to the moral question, voters may be tempted to conduct a practical experiment on the matter using the American economy as a test case.

My own sense is that the best moral defense of billionaires requires putting the socialists on the defensive by answering the billionaire question with some other questions.

Would it be moral for politicians in Washington to change the laws so that becoming a billionaire in America would be impossible, no matter how much value an entrepreneur creates for customers and shareholders and society as a result of the entrepreneur’s hard work, genius, and risk-raking?

What would that proposed alternative system do to the American dream and to its traditions of strong property rights?

Why scapegoat and demonize a few billionaires for public health problems in Alabama that they have nothing to do with?

Won’t we be more likely to make progress against poverty and disease if we avoid divisively linking those problems to the existence of a few rich people who aren’t actually at fault for them?

Is it a "moral world" where politicians can motivate millions of voters to blame a country’s problem on a handful of wealthy individuals, and to suggest, without evidence, that long-term and intractable problems can be quickly solved if only tax rates were dramatically increased?

Is the Democratic fixation with the billionaires (problem) and taxes (solution) much different from the Trump fixation on immigrants and the border wall?

It’d sure be nice to have a moderator ask, and the candidates answer, some of those questions, too, in the 2020 presidential debates.

Ira Stoll is author of "J.F.K. Conservative," and "Samuel Adams: A Life." Read more reports from Ira Stoll — Click Here Now.

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One might ask, skeptically, whether people will really stop working as hard, and if the supermarket shelves will really go bare, if the financial rewards of capitalist success were to top out at $900 million rather than $1 billion or $100 billion.
billionaires, sanders, taxes, warren
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2019-27-28
Monday, 28 January 2019 02:27 PM
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