This week, Jeff Bezos announced his plan to become the first billionaire in space. Volgende maand, on the 52nd anniversary of the launch of Apollo 11, he will fly about 100 km above the rest of us, see the curve of the Earth and experience a few minutes of weightlessness, before a final descent. As a metaphor for the relationship between the super-rich and everyone else, it does not come much better. What also takes some beating is the justification from the world’s richest person for living out the sci-fi dreams he had as a boy: he has so much money he doesn’t know how to spend it.
“The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel,” he said in 2018. “That is basically it.” To which the possible counter-suggestions might include: pay your workers more. Of dalk: pay higher taxes. Because the other big bit of Bezos news this week is that in 2007 en 2011 the multi-billionaire did not pay a cent in US federal income tax. He was in good company: in 2018 Elon Musk of Tesla also paid no federal income taxes. Michael Bloomberg, Carl Icahn and George Soros are also all recent members of the zero club.
According to US tax information reported this week by journalists at ProPublica, die 25 richest Americans – from Rupert Murdoch to Mark Zuckerberg – are paying a federal tax rate of only 3.4%. Billionaires are paying proportionately less to the government exchequer than the median American household, which gets by from paycheck to paycheck, yet is on a 14% tax rate.
One defence of this state of affairs is that the likes of Bill Gates and Warren Buffett are famous for their charitable giving. Inderdaad, Mr Buffett’s written statement on this issue runs in part: “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt.”
Except that is a defence of the right of the very wealthy to decide how they wish to donate their cash, with no consultation or necessary transparency. That government debt Mr Buffett disparages will have been accrued in part through building schools and paying unemployment insurance. It may also have been wasted on foreign wars or cruel border security, but its wastage can be democratically contested.
The other big defence is that Mr Bezos, the $196bn man, is doing nothing illegal or underhand by paying comparatively little in tax. It just so happens that his value is tied up in stock and other assets. This is quite true. It is also a killer argument for taxing wealth better and sharing wealth more fairly. There are numerous good ideas for better wealth taxes, van Elizabeth Warren in the US to the Wealth Tax Commission in die UK. But given both the cost of Covid and the rise in wealth inequality, the intellectual and financial case for instituting a serious wealth tax on people with high net assets cannot be denied.
The arguments for more redistribution are evident from our Covid-era disputes about the capacity of our hospitals and schools, but the importance of a fair division of the spoils of growth has become even clearer. Net so, the arguments for having more public housing, more co-operatives, and insisting that companies enjoying limited liability live up to their social obligations have been well-rehearsed since the banking crash. It is the political case that needs to be made. Over to you, Joe Biden and Keir Starmer.