Let’s run a hypothetical. Just an imaginary argument that can never, ever happen. We live in a parallel universe, a bit like The Watchmen but without the raining squids and police in masks. Instead, in this alternate universe, since 1982, Eilizabeth Warren or Bernie Sander’s “wealth tax” has been in effect. After 27 years of this new wealth tax, what would America look like? Would the billionaires survive?
Could they actually make a living and grow? That question has haunted billionaires around the country, causing them to toss in their sleep: what would happen to me if suddenly I paid taxes commensurate to the services I use from the government. My company puts trucks on the highway, using them up, our stores require police to help protect our product. I use the patent and copyright laws. I depend on the accountability of the government for stock transactions and to bail me out if things go wrong.
This nightmare scenario is played out in the pages of Business Insider, and in this alternate world, where billionaires pay a different tax rate, the results — well, it makes you realize you might not be able to afford that 8th house.
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Business Insider gives some comparisons. Jeff Bezos, the Amazon head honcho, is valued at $160 Billion dollars. But if Elizabeth Warren and Bernie Sanders plan was in effect since 1982, his valuation would look much different.
Net worth under revised Warren wealth tax: $48.8 billion
Net worth under Sanders wealth tax: $43 billion
Bill Gates would have been paying the billionaire level taxes far longer, and it would impact him more, of course. His current value may be $97 Billion, but if he were paying a wealth tax since 1982:
Net worth under revised Warren wealth tax: $13.9 billion
Net worth under Sanders wealth tax: $9.9 billion
Billionaires seeing these numbers must be terrified. How on earth can you manage to survive on $13B or $10B dollars? Assuming you invested back into your own company and workers — which of course would help you offset your tax responsibilities, you would still reduce your overall net worth, though your employees might appreciate you giving them more, as you couldn’t horde it away from taxes.
But let’s be serious, people. If you had a choice between having $160 Billion dollars and $48 Billion dollars in your bank accounts, you would know the difference. In one, you can swim Scrooge McDuck style through a river of gold coins. In the other, well, maybe you -can- buy a few private islands and have more money than some governments, but is that ever really enough?
The panic is very real. Could you survive on $10 BILLION dollars? Fortunately for all of these billionaires, the tax can never be retroactive to 1982, so their money will be safe. Still, just the thought of it — what if they had actually paid commensurate taxes — and were left with only $10 BILLION dollars.
It can keep you awake at night.