There are about 127.59 million households in the US.
And, the proposed wealth taxes would affect 180,000 households using Senator Sanders’ plan and only 70,000 households using Senator Warren’s plan. Or 0.141% of all US households.
Using Warren’s plan, that amounts to 1 family per 1,822 households. Or one family out of 708 families using Sanders’ plan.
Making The Numbers Real
Okay, we’ve got the actual number of households figured out. So how would the actual amounts of wealth look in terms we can really understand? Let’s take a village of 1,822 households, or one of 708. Either one, you pick. What these taxes are targeting is the one (1) family in those villages who have *rooms full of money* compared to all the average families who live in those villages. Because, unlike some deceptively named pieces of legislation, these tax plans -are- only aimed at the ultra wealthy; the few families that have more money than mere mortals could -ever- imagine how to spend in a single lifetime.
Let me back this up with some facts.
According to an article reprinted on Marketwatch.com1 (which, btw, is not exactly a pro Communist Manifesto type website), the median net worth of American households ends up at right around $97,300. Using the median means 50% of US households have more than that, and 50% have less. Using the median number (in this instance) would correct a skew that happens when we use the average net worth of households -a skew that is directly produced by the obscene amounts of wealth of the 1% (or more accurately, the .141 percent of US households that these plans would affect).
Alternate Relevant Facts
Alas, a few will undoubtedly protest that we really should use the overall averages of what households are worth, not the 50% cut off point. Fair enough (although in reality, it’s not). Let’s do it.
So, the average net worth of an American household in 2016 was $692,000- which includes the obscenely wealthy (and the reality based among us will no doubt already be thinking “Uhhhh, wait, I don’t think that “average” households have that much net worth”…which you will recall was my point about using the median in this instance, but no matter, we’ll stick with this “fair” number).
Imagine A Village
Using these numbers we need to somehow imagine that there’s a village of 1822 families where $692,000 of net worth per family is dead average. Once we do that, we then need to imagine that the single richest household in this village (and the only household subject to this tax) has at least 72 times what the average family has. (The math is: 50 million divided by 692,000, and is based on the 50 million dollars (for marrieds) as the low end of the “ultra rich” households which would be subject to this tax).
To spell it out further, let’s try to really visualize this village: If we can imagine the huge majority of the 1,821 families each having somewhere around one 10 x 10 room which contains the bulk of their $692,000 of net worth, we’ll have to now imagine the one (1) richest family (and again, the ONLY family that would be affected by this tax) would need… at least 71 more 10 x 10 rooms -just- to hold their wealth. Yeah, 71 extra rooms -just for the extra money. And the tax we are talking about would affect the assets on only one of those rooms. Seriously.
Okay, and for full disclosure, (and to explain the differences in village sizes) Sanders’ plan also taxes those households with a tax payer filing as single (or married, filing separately) with 35 million dollars of NET worth, or 51 rooms. Full. Of wealth. With exactly one of them taxed at a higher rate. (see footnote 2). Keep those pictures in mind.
As an average household in this village, a 10x 10 room full of wealth gives you a good amount of resources- and really, you should be able to feel (and be) secure and safe in your home and free of hunger. This could easily change however, if a big storm comes along and destroys your property or affects your livelihood, or if someone in your family becomes seriously ill and you have large medical bills to pay. If misfortune befalls your household, then the community (due to previous agreements about taxation) -will- help you out, but more often than not you’ll need to first use up the vast majority of your entire room full of money before you can -start- getting that help. (After all, federally funded support programs are often restricted to those with assets less than a few thousand dollars-as in under 10k).
Oppression of Multi Millionaires
Now imagine that the one neighbor (with 72 rooms full of wealth) gets testy anytime a suggestion is made that maybe they could contribute a little more to the general fund- from one of their 72 rooms full of wealth.. Or, more accurately, I should have written “Imagine that one neighbor sends his lawyers and personal lobbyists (who earn their room full of wealth from doing his bidding) out into the community to communicate passionately about how unfair it is that he should give a little more to a general village fund that is designed to protect and benefit everyone in the community”. Did I mention this is a community that was expressly created to allow its members to pursue life, liberty, and happiness? It was. Please do factor that in. How would you react? He’s upset about one of his 72 rooms being taxed at a higher rate. Actually, I’m already good and pissed off -at him. And I think the average villager would be, too. But you may not be. Fair enough.
Incredibly, It Gets Worse
Really, we can work with your higher tolerance towards inequity. But do me the favor of venturing back into reality with me while we do so. Because back in reality, Bill Gates has an estimated net worth of 86 billion dollars -or 1,720 times as much money as that (measly!) 50 million dollars. Yeah, really. Go ahead and do the math, and fact check his estimated wealth, I’ll wait.
In other words, Mr Gates’ household has a net worth of 124,277 times more than an average family. And that’s again, an “average” household net worth of $692,000.
So that means we’re now talking about a village of 1822 households where each family has an average of one room full of money, and where his is 1) the only household subject to this extra tax, and 2) it has a mind boggling 124,277 rooms. Full. Of… Money. Yeah, seriously. Again, go ahead, no, please do the math. It is incredibly difficult to wrap our heads around this much inequity, but it is the reality of our villages in the 21st century. If you don’t think Mr. Gates could or should spare a few of those rooms for the greater good, then you are simply nuts. Even he thinks he should!
Objections To These Plans
Criticisms of these plans have strained the limits of credibility, to say the least. The ones I’ve read have focused myopically on two items. First, the “devastating” effect of “almost halving” the net worths of these super rich families, and second, the speculation on what that -might- do to the larger economy. Allright, let’s take a look at both of those things.
They’d Notice A Small Dent
Let’s start with that measly 50 million dollars. And imagine that this horrible tax -actually did – cut these poor multimillionaires net worth to half of what they currently have. I’m not at all convinced this tax would have anywhere near that amount of impact, but let’s pretend it does (because assuming it would IS one of the main anti tax arguments going on out there).
So a married couple would work their poor little fingers to the bone and only amass a total of thirty five (35) rooms, or the single would only have twenty five (25) rooms. Full. Of wealth. While the average family has one room. Which they do just fine with. Seriously. Do the math.
I personally see absolutely no problem with this. Full stop.
Also, please remember that despite the dire projections of certain “news” articles, the extra amount taxed is only on the rooms full of wealth that are over 50 or 71.
Maybe It Is About the Economy?
And the speculation about the effect on the economy? Puleeeeze. You tell me what kind of effect it has on an economy when one family owns 10 out of the 12 stores in a community, and pretty much all of the news outlets. What does that really do to the playing fields for the 707 or 1,821 other families in the community? It actually doesn’t take an economist to figure out that if one person amasses a huge slice of the pie, there is simply less to go around for everyone else. More on that in a minute.
Monopoly On Opportunity
A (negative) skewing of opportunity for the vast majority of people is exactly what -actually- happens (and is, in fact, happening) when you have that much wealth concentrated into one household.
Let’s venture back into real life to see if this actually is a bit of a current problem. In America today: Full time workers at Wal___ (insert the name of any big chain store) in many communities still qualify for (or come damned to close qualifying for) food stamps because they aren’t making living wages. The vast majority of people who work at shi**y jobs like these do so, not because they are lazy, or because they like dull, menial work, but because other realistic economic opportunities are not there. In reality, the odds of creating and sustaining their own businesses without a boatload of start up capital are simply not good. And even with boatloads of capital, we’ve all heard the “most small businesses fail” warnings.
Who in their right mind would gamble on 70/30 odds? Only those with safety nets, that’s who. And I feel compelled to note here that safety nets are quite expensive to obtain legally if you weren’t born with one. So the reality is the vast majority of workers decide they simply can’t afford to pursue their dreams (a.k.a life, liberty and the reasonable ability to pursue their own versions of happiness) because we live in communities where the public playing fields that currently exist are seriously muddied, uneven, slippery and quite frankly, dangerous. So they play it safer and work for peanuts. And the wealthy get wealthier. That is our current reality. I’ll spell it out in more detail below. But first, let’s define average.
What Is Average, Really?
Back to the “average” question. If I believed “average families” actually had 692,000 dollars of net worth, I probably wouldn’t have bothered to write this article, really. In fact, I may have instead been part of the organizing committee for the victory parade to celebrate this “average” achievement. And in that alternate version of reality, we’d all have the freedom and means to attend the parade on a work day!
But, with the “official” poverty rate of American at 11.8 % or about 38 million people (see footnote 3), it’s not much of a stretch to imagine that we are being a bit overly generous in using $692,000 of net worth as an “average” for our villagers.
If we instead used the (depressingly low) median number of 97,300 dollars (which, I feel compelled to remind you, would still be heaven on earth to every last one of the 38 million people officially living in poverty), we find that the math is worse. Much worse. It would take 883,864 median net worth households (comprised of around 2.3 real people, who live, work, raise families and pay bills right here in the US) to have a net worth equal to Mr. Gates’ one household. Seriously. Do the math. It’s an obscene reality, there are no other words for it. Yet it is our reality.
What Is Freedom, Really?
Once we get over the shock of the words above, let’s throw some airy fairy words like freedom around. After all, it’s supposed to be a free country!
Okay, let’s do it. Let’s use a rose colored glasses scenario for ANY village where a billionaire lives: and, we’ll use a billionaire who has only amassed 1 billion dollars. We’ve got a village of 1822 families, most having more or less one room full of wealth where their average net worth is $692,000 (wouldn’t that be nice?). The lowly single digit billionaire’s storage problem for his wealth is immense. He needs a house with about 1445 rooms for his wealth, or almost one extra room for every household in the entire village. A typical pie chart full of resources shows about 99.8% of the village splitting roughly half of the pie (into 1821 separate pieces of pie) and one family amassing the other half of the pie. Seriously, do the math. Have your kids make the chart, see what they think. Let’s shade it in with pink for the billionaires, orange for the average folks. Don’t forget the 1821 thin black lines for the orange side of the pie.
What effect does that have on my life though, and how on earth can I shove the word freedom into the heading above?
Am I really “free” to pursue my dreams or happiness in this village if the billionaire owns most of the businesses, employs a good number of my neighbors, buys up all the farm land, controls the banks (for him to buy a small bank would only cost him 3-7 rooms worth of wealth on a good day, and he’s got 1445 of them to work with). What if he likes his gas stations and decides he doesn’t want villagers to know much about electric cars or solar energy. Will his car dealerships sell electric cars?
And, in this rose colored glasses scenario, let’s say I do something to piss off the billionaire. Suppose I decide to drink from a public water fountain that he thought was his, or sit at a diner counter he designated for his friends. Let’s say two days later I try to get a business permit to start a new store that directly competes with that same billionaire. Knowing how humans have acted over the years, am I really free in this village? Seriously.
Can I even freely speak about the unfair advantages the billionaire has when everyone in the village knows this billionaire could stop me at any time if he wanted? Or do I (back in reality) pick and choose between a few paint by numbers options that won’t piss off the billionaire further?
Even in this -best case- scenario, it is not hard to see how, on a whim, the billionaire could make life miserable for any and everyone.
How About A (Micro Sized) Slice Of Pie?
Let’s try that other average figure on for size now. How about when the village billionaire (again, with “only” 1 billion dollars) -actually- has more than 10,277 rooms to the average family’s one room. Yes, 10,277; do the math. $97,300 of average household net worth x 10,277= about 1 billion dollars. Let’s see if your kids can make a pie chart for that village! They will only need one color for this chart- they’ll need to make 82 percent of it pink for the 2.4 people who live in the billionaire’s home. The 18 percent would be orange, of course, but no one will ever see the orange because of having to slice that orange part into 1821 tiny, tiny little pieces!
But, that’s assuming all the rest of the villagers are average. They are not. In reality, 11 percent of our fellow villagers are officially living in poverty and are very desperate, so many of them will do just about anything for any scraps of money – including any nasty things the billionaire wants them to do. Are ANY of the people in this village truly free in any real sense of the word?
Are We A Pro Feudalism Country?
This is what folks on the left are yammering about when they categorize these vast amounts of inequity as dangerous to democracy. In these imaginary villages (which are ironically enough, the only places where we can begin to get a more accurate idea of what this immense amount of wealth really looks like), it is easier to see the vast implications of one family having this much wealth. When looked at honestly, there is really no significant difference between these villages and feudalism. Just a thicker veil of politeness that saves the peasant from physical abuse- in most cases. Not all.
I’m with Bernie on this one, I do not think billionaires should exist. That amount of inequity makes true freedom impossible; nothing but a pipe dream for everyone else.
Free Markets And Equal Opportunities
Elizabeth Warren has said she’s okay with billionaires existing. In other words she can still tolerate one family having 1445 times as much wealth as “average” Americans; she just wants people taxed a bit on amounts over 50 million dollars. And yet……she is (incredibly) being labelled as “too progressive” by some “pundits” in 2019 on this issue.
I call bullshit on that. And I do think most average folks (left, right, centrists) would agree that ANY way ya slice it, the growing amount of wealth inequity is obscene, and a small wealth tax on the worst of the excesses on these Neo Feudal Lords and Ladies is a small step in a better direction. And yet in November of 2019, one of their kind, another multi-billionaire has entered the 2020 presidential race after it has become clear that the current crop of “corporate” picks are tanking. Could it really be that the uber wealthy are greatly threatened by the two main candidates uttering the phrase “wealth tax”? Kinda looks like it.
2. Sanders’ plan does tax those filing as single or separately who are worth more than 35 million dollars (and please remember that’s NET worth, not gross), so you can quibble with that if you feel the need to do so. In fact, using the scenarios I provide in the rest of the article, I’d like – no, I’d love- to see a strong argument against this small tax for households with net worths of “only” 35,000,000 dollars or more- I dare ya!