Bernie Against the Billionaires
Bernie Sanders is right to want to hike the estate tax — there’s no reason for billionaires to exist, and there’s definitely no reason to allow their failsons to inherit their fortunes.
Republican senators Mitch McConnell, Chuck Grassley, and John Thune introduced legislation early last week to repeal the estate tax, the tax on large inheritances that currently applies to only 1,700 American families per year. Their bill would provide up to $63 billion in tax breaks for the Walton family, which owns Walmart, and $39 billion for the Koch brothers’ brood.
That money could go toward universal health care, tuition-free public college, housing the homeless, paying public school teachers a living wage, or solving any number of social problems faced by the American working-class majority. Instead, Republicans want to put it toward the strengthening of modern dynasties.
Vermont senator Bernie Sanders isn’t just trying to stop them. He’s gone a step further and introduced his own bill to beef up the estate tax. As he unveiled his proposal, Sanders said:
Instead of repealing the estate tax, we should substantially increase this tax on the multi-millionaires and billionaires of this country, and in doing that not only come up with much-needed revenue to address the needs of working families, but also to reduce wealth inequality in America. And that is why this week I will be introducing legislation for an estate tax bill that would do exactly the opposite of what my Republican colleagues propose to do.
Under Sanders’s bill, inherited estates worth more than $3.5 million will be taxed 45 percent or more. The scale is steeply progressive, culminating in a 77 percent tax on inheritances over a billion dollars — nearly double the current rate.
Conservatives will react to Sanders’s bill in a few predictable ways. First, they’ll probably try to trick people into believing he wants to impose a massive tax on all inheritances, not just those beginning at a multimillion-dollar threshold. This is the same maneuver they pulled in response to New York representative Alexandria Ocasio-Cortez’s proposed 70 percent top marginal tax rate, and something they’ve tried with rhetoric about the “death tax” before.
And second, they will tell us that rich people earned their money and should get to keep it as a reward for their hard work. For an example, take a look at this op-ed calling Sanders’s bill an “inherently immoral” attempt to “penalize innovators.”
To this, there are two responses. First, we’re talking about dead people here, and dead people’s children. Did Wyatt Koch, the Koch heir who designs money-themed patterned shirts when he’s not partying at Mar-A-Lago, lift a finger to build his father’s and uncles’ fortunes? No, he did not. In fact, Wyatt has never needed to work at all — the shirt thing is just a hobby, sort of like the cosmetics line of Peter and Harry Brant, the “dandy teenage boulevardiers of New York society” who can be spotted at charity galas in “ensembles that would have made Little Lord Fauntleroy blush.” What exactly do these kids “deserve,” and why? They haven’t done anything but be born into rich families.
Second, it’s impossible for anyone to earn a billion dollars. An individual can acquire a billion dollars, but that fortune is not proportional to difficulty of work or value added to society. A recent viral tweet shows why:
Do you know how rich a billionaire is? Let’s say you earn $50k/year & save every. single. penny. After 20 years, you’d have saved $1 million. After 200 years, you’d be dead, but would have saved $10 million. Only after 20,000 years(!!!), would you have saved $1 billion.
People do not receive a billion dollars in exchange for work. They receive a billion dollars in exchange for owning enormous companies that employ tens of thousands of people, whose labor makes the entire enterprise possible. Conservatives argue that if a billionaire boss built his company or keeps it running, he’s entitled to the perks of ownership. But which is a company like Amazon or Walmart more likely to survive: two weeks of radio silence from its CEO, or two weeks of its workers going on strike? The answer tells you who really builds a company and keeps it running.
All corporations function by paying workers only a portion of the value that their labor produces. The leftover value is taken by bosses as profit. The stuff we need doesn’t have to be manufactured and distributed through operations like this — workers can own companies in common and divide the fruits of their labor among themselves.
“You do not need the capitalist,” the socialist Eugene Debs told a gathering of workers in 1905. “He could not exist an instant without you. You do everything and he has everything; and some of you imagine that if it were not for him you would have no work. As a matter of fact, he does not employ you at all; you employ him to take from you what you produce, and he faithfully sticks to his task.” This is the idea behind socialism in a nutshell.
The ultimate utility of bosses aside, there’s no reason for billionaires to exist, and there’s definitely no reason to allow their children to inherit the bulk of their fortune, perpetuating this obscene inequality across generations.
“From a moral, from an economic perspective,” said Sanders, “our nation will not thrive when so few people have so much wealth and power, and so many people have so little wealth and power. This wealth and income inequality is not only unjust and unfair, the truth is it is a real threat to our economy and to our democracy.”
Jeff Bezos makes the equivalent of the median US income every twelve seconds. Meanwhile, 40 percent of Americans don’t have $400 on hand in case of an emergency. A steep estate tax will only begin to address the extent of the problem — but it’s a great start.