I’m seeing quite a few opinion pieces calling for billionaires to be “abolished” (in the NYT and The Nation just to name two). I wonder how they intend to go about it. Back in the 1960s when the highest marginal personal income tax rate was 90%, there were still very rich people (Joe Kennedy’s net worth was about $500,000,000, well over a billion in today’s dollars) so pretty clearly it can’t be taxed away.
I’m completely in favor of ending subsidies to billionaires but it’s hard to drum up any interest in that.
Its actually not hard, its just not what people are getting at.
Redenominate the dollar. Using the price of gold as a benchmark; in 1911 1oz of gold was $20; today 1oz is $1600 (and reached $1900 this year). So the dollar has lost about 99% of its value over a century, which tracks closely to the 97% as measured by CPI.
Let’s redenominate the dollar so a new “$1” is equal to 100 current “$1” — so roughly the value it had a century ago. There would only be 4 US billionaires left in new dollars.
If you redenominate the dollar by 1:200 — there wouldn’t be a billionaire left at all.
I don’t think that would make the proponents happy.
The post stimulated some research.
Rockefeller was the first US billionaire in dollars in 1916. The US population was 101 million. Today, the population is 332 million.
Adjusted on a per capita basis and inflation; if the wealth inequality in 1916 was projected to today, you would expect approximately 3-4 people with more then $100 billion. The actual figure is 4.
Nothing is new under the sun.
You are both right.
Envy masquerading as social conscience didn’t start yesterday.
There’s no way to do it except by taxing wealth. But it’s a lot easier and more popular to hand-wave and pontificate about abolishing billionaires than it is to propose a wealth tax that would actually attempt to accomplish that.
So IMO, it’s just the usual rhetorical and virtue-signaling BS that isn’t very serious.
Dont want to abolish them but do wish they would go back to making money and not trying to directly dominate politics and the public sphere. Now they just directly run for office.
Steve
It is impossible with the existing system. You could alter the system to reduce the number of ultra-rich, but that has downsides. In a financialized economy, wealth inequality cannot be overcome. You cannot “tax away” financialized wealth without decreasing the economy.
First, most wealth is not realized wealth. Mark Zuckerberg is worth what a small number of people are willing to pay for Facebook stock on a single day. Except for that small amount of shares bought, Facebook stock is actually worth $0.00. There is not enough liquidity in the system to to realize the wealth.
Liquidity is the issue, and those who produce that liquidity will become the wealthiest. In a financialized economy, liquidity is a product, and like any physical product, it is manufactured. The product and manufacturing facility are not physical, but nonetheless, they are real.
Since not enough actual products are produced in a financialized economy, they must be imported, and since nobody is donating goods to Americans, something must be traded for those imported goods. It is how a financialized economy works.
In the end, making the ultra-rich less wealthy will result in the not-rich having less money, and giving tax-money to them will make the ultra-rich wealthier. I suspect it is not a linear relation, and therefore, the poor become poorer faster than the ultra-rich become poorer.
Changing banking and finance regulations will de-financialize the economy, but the economy will need to be re-industrialized. Good luck with that.
NOTE: A financialized economy is not about consumer debt. Most products the financial industry manufactures are not consumer products. Most of these products are inputs into other products.
Giving away tax-dollars is like giving away rubber. It will eventually increase the wealth of the tire maker more than the initial recipient, and taking away the tire maker’s wealth to give out more rubber will eventually increase the tire maker’s wealth.
(Money supply, monetary policy, fiscal policy, and inflation are affected by a similar dynamic.)