Billionaires Are Panicking Over the Growing Popularity of a Wealth Tax

Billionaires Are Panicking Over the Growing Popularity of a Wealth Tax

The billionaires are mad. They’re issuing expletive-filled quotes to reporters and scaremongering about market crashes because they don’t like what they see in the presidential primary. These ultra-wealthy men are used to being heard when they so very loudly complain. But they’re now facing a presidential primary where one of the items up for debate is just how much we should tax their wealth. Instead of a public viewing them as model citizens to emulate, they’re being mocked. Behind their bluster and anger, the panic of these billionaires is beginning to show.

In October, billionaire hedge fund managers Paul Tudor Jones and Leon Cooperman both warned of a 25 percent drop in the stock market should Sen. Elizabeth Warren or Sen. Bernie Sanders be elected. Cooperman cried on CNBC about the “vilification” of billionaires, was thoroughly roasted by “The Daily Show” for it, and has now ended up in a campaign ad for Warren. In response to reporting about the ad, Cooperman ranted to CNBC reporter Brian Schwartz, “She doesn’t know who the f— she’s tweeting. I gave away more in the year than she has in her whole f—-ing lifetime.” Former Goldman Sachs CEO Lloyd Blankfein, who also ended up in Warren’s ad, took to Twitter to complain about it complete with a racist joke, and got promptly ratioed.

The charitableness that billionaires like Cooperman enjoy touting ends abruptly when the idea of a wealth tax is introduced. They are very proud of their own philanthropy — which they choose and which benefits them with good will and good press. But the idea that they’d give 2 percent, 6 percent or 8 percent of their wealth through a democratic process — where elected representatives of our government vote on how to allocate resources — is “called Venezuela,” according to Michael Bloomberg, or a disincentive to form companies, according to Bill Gates.

Facebook CEO and billionaire Mark Zuckerberg told a town hall that his philanthropy funded research the government doesn’t, and “the alternative would be the government chooses all of the funding for all of the stuff.” Someone should tell Zuckerberg that this is a feature, not a bug, of democracy. Unlike a billionaire like Zuckerberg, who could get bored of a project and move on to the next shiny thing on a whim, the government is elected, and has multiple avenues for oversight and transparency, and employs millions of workers with extensive expertise. And the government is expected to consider time horizons longer than a single lifetime, avoiding the ego-centric desire of wealthy people to see a “return on investment” for their philanthropy.

Because the very wealthy are also so used to being fawned over — be it on their private jets or in their treatment by pundits — they have no emotional resiliency to tackle even the most modest challenges. After Sanders said “billionaires should not exist,” CNBC host Jim Cramer called Sanders’s wealth tax “just wholesale redistribution.” Billionaire Starbucks founder Howard Schultz called a wealth tax “ridiculous” and whined, “You can’t just attack these things in a punitive way by punishing people.” And Bloomberg seems to think the rules that apply to others should not apply to him.

As the mayor of New York, Bloomberg fought hard (and successfully) to change the rules so he could have a third term, but then fought hard to change the rules back so that no one other than him could have a third term. Bloomberg showed animosity toward protesters during Occupy Wall Street, overseeing countless New York Police Department abuses and the eventual eviction of protesters from Zuccotti park. But even before Occupy, a different weeks-long encampment named “Bloombergville” decried the mayor’s opposition to taxing the wealthy, as Bloomberg instead proposed budget cuts for teachers.

Billionaires also like to pretend their philanthropy is a selfless, no-strings-attached gift. But they receive much in return for it: accolades, a good reputation — and things to complain about on CNBC when a candidate wants to tax you. A favored argument of billionaires and their defenders like Jim Cramer is that a wealth tax is essentially “confiscating wealth.” But none of these mass fortunes were created in a vacuum and without the benefit of public goods and the structures of government. Bloomberg’s major clients are Wall Street banks, who all benefit in times both bad and good from an implicit government backstop. Gates has the legal system to thank for enforcing Microsoft’s patents. Every tech billionaire has government-funded research to thank for the creation of the internet, and all billionaires that employ workers can thank the government for an educated workforce.

Wealth is often culturally viewed as evidence of hard work, grit and smarts, without any consideration of whether luck, grifting, corruption or illegal acts may have also played a role. In her new ad, Warren points out some of the more questionable parts of her billionaire critic’s past: the Securities and Exchange Commission charged Cooperman with insider trading. He’s hardly the first billionaire whose wealth may have accumulated due to lax enforcement. Jeff Bezos, the second-richest man in the world (being recently surpassed by Bill Gates), may have the government’s failure to pursue an antitrust case against Amazon to thank for his billions.

Perhaps what has these billionaires scared the most is the massively popularity of a wealth tax. A New York Times/SurveyMonkey poll from July showed that 66 percent of adults support a 2 percent wealth tax, as do 58 percent of Republicans age 35-54. Wealthy people aren’t waiting around to find out if this remains true; they’re already looking for ways to hide their money in advance of the election.

In addition to preemptively hoarding money, billionaires are expressing their class solidarity in the election. Bezos encouraged Bloomberg to run, and Cooperman has said he’ll support Bloomberg now that he has officially filed. To his credit, there is one billionaire running for president who’s bucking the trend: Tom Steyer, though his proposal of taxing wealth above $32 million at 1 percent is more modest than Warren’s 6 percent tax over $1 billion (she raised it from 3 percent to 6 percent in her Medicare for All financing plan), or Sanders’s 8 percent tax on wealth over $10 billion. Steyer has also said, “If you want to represent the Democratic Party, you’ve got to be dealing with … incredible income and wealth disparities,” and called on Bloomberg to support a wealth tax.

For too long, the opinion of the very wealthy has been treated as worthy of air time. Every time a billionaire does complain, the media obligingly reports it. Elected officials are just as deferential: When Jamie Dimon (who is merely a multimillionaire) testified in Washington, D.C., about a massive trading fiasco, Democratic Sen. Michael Bennet used part of his time, not to conduct oversight after a giant trading loss but to ask Dimon his opinion on the country’s fiscal state.

We used to have divine right of kings; now some in the media and the upper echelons of wealth would have us think there’s a divine right of billionaires. But that view seems to have little sway in non-billionaire circles, as candidates like Sanders and Warren see their tweets criticizing billionaires and their defenders go viral. The Warren campaign has even started selling a much-requested item: a mug labeled “billionaire tears.” In Seattle’s recent city council election, Amazon poured in a staggering $1.5 million, only to see it backfire. Perhaps the billionaire critics of the wealth tax will soon learn that their side is a losing one.