Notes On the Wealth Tax Proposal

by Alex Knepper

One of the utilities of Sens. Warren and Sanders’s proposal for a wealth tax on the ultra-wealthy, regardless of whether it comes to pass — which, frankly, it probably won’t, even if one of them is elected — is that it lays bare for all to see where we really stand with one another. Debates over economics are often full of subterranean assumptions, like: ‘If the West doesn’t privilege the super-rich, I and other wealthy people would sooner head out to China or central Asia or Russia and run my business there instead.’ The supposed fear of capital flight is really a threat: ‘Take too much money and we’ll high-tail it on out of here to some dictatorship or somewhere with still-exploitable cheap labor.’ But debates rarely get to the point where any individual wealthy person will admit this in these terms — where it becomes clear that the ultra-wealthy are consciously holding our democracy hostage to their desire for unlimited wealth.

Of course, they already are ‘flying’; the cat is already out of the bag — the super-rich are already stashing as much money as humanly possible in quasi-criminal island nations, for instance. And to the extent that moving capital around the world is more profitable to them than remaining in the United States, they are already skirting our laws and regulations to the extent that they can. And are fully conscious of the principles that drive their behavior: profit first, country fourth or fifth — or whenever it’s convenient. But they don’t like to talk about this because they know it sounds dirty and disloyal to most working people. They want to talk about this problem as if it’s a hypothetical rather than something that’s already happening.

Image result for wealth tax warren sanders

Hence they will only admit it when they are cornered by a progressive argument consistent enough to smoke it out and not surrender or make concessions to the privileges and prerogatives of the wealthy, or the need to genuflect to them as holy job creators. So when we’re arguing for the wealth tax, we’re also arguing in a way that’s designed to make it clear for all to see what the priorities of the wealthy really are. Their hysteria over a 2% tax on wealth over $50,000,000 demonstrates that they are far less disturbed by the collapse of the middle class than they are by the idea that they might become merely super-super-super rich rather than super-super-super-super-super rich.

The simple reality is that most ‘ultra-millionaires’ — and those who aspire to the status — are loyal to private profits first, and liberal democracy as long as it’s convenient. And they know that China and Russia are proving that capitalism doesn’t really require liberalism or democracy. Only when these terms are laid bare can we can start talking about fighting back with equal force. It’s only then when the totality of the situation comes to light for people. Then it becomes easier to say: ‘Oh, you want to threaten to leave and do all your business in China or Russia? Go ahead — just say bye-bye to your US passport.’ Nobody wants to surrender the privileges of American citizenship. So: call their bluff, play hardball, and stop surrendering out of the gate — these people don’t really want to give up the protections of American citizenship, and it is perfectly possible to engineer a regulatory scheme that requires American businessmen to be Americans to the same extent that they are businessmen, and not just businessmen who are accidentally American.

Of course, beyond the immediate motives of the ultra-wealthy, the reason 90% of everyday people who object to a wealth tax object to it is because they think it’s not fair; they love the fact that there are lots of billionaires and see the unfathomable wealth of our millionaires and billionaires as a crowning glory of our system; they roll their eyes at appeals to prioritize the working poor, whom they largely consider perpetually financially hopeless, and actually look forward to the day when there are trillionaires. They don’t see any injustice in the idea of there being a trillionaire while the employee of a trillionaire has to decide whether to pay for his insulin or pay for his rent. They fundamentally believe in a system of every-individual-for-herself; they do not fundamentally question the justice of the existing property arrangement.

There is no easy way to deal with this mentality; it is the result of 40 years of the assumptions of Reaganism-Thatcherism burrowing their way into our civic life. We will never reverse this trend if we aren’t ready to fight for a coherent alternative. Warren reminds us of the stark truth: we are already in a fight. American workers didn’t choose this fight. They were sold a bill of goods by people who knew better. The only way to fight back is to stop surrendering out of the gate.

SEE ALSO: The Case Against Elizabeth Warren’s Critics, which addresses the notion that a wealth tax is unworkable because European nations largely did away with them.

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