Must Our Billionaires Remain Politically Immortal?

We haven’t seen the last of billionaire Sheldon Adelson. Or, to put the matter a bit more exactly, we haven’t seen the last of Sheldon Adelson’s fortune.

The great roulette wheel in the sky has most certainly stopped turning for casino king Adelson. He expired earlier this week at age 87. But Adelson’s $33-billion fortune will live on — and distort our nation’s political life for years to come.

How many years? We can’t, of course, see the future. But we can see how the past impacts our present. Consider, for instance, the current impactful political presence of Timothy Mellon.

The 78-year-old Mellon ranks today as one of America’s biggest political donors. In the 2020 federal election cycle, he donated just over $70 million to right-wing political groupings. Overall, only two political donors in the country, reports the Center for Responsive Politics, gave more to outside spending groups than Mellon. The number-one giver: Sheldon Adelson.

Timothy Mellon bears the surname of one of America’s all-time wealthiest. His grandfather, banker and industrialist Andrew Mellon, ranked as one of the nation’s three richest men back in the 1920s. The elder Mellon, notes historian Arthur Mann, cut quite a figure. He “dressed expensively, dined expensively, drank expensively.”

And contributed extensively, Mann could have added, to the massive GOP campaign war chest that helped smooth Republican Warren Harding’s 1920 ride into the White House.

Mellon the mogul had ample incentive to work for Harding’s election. Over the 20th century’s first two decades, American progressives had scored resounding victories on the tax front. America had entered the new century with a comfortably plutocratic tax code. The nation’s wealthy faced no taxes whatsoever on their incomes in 1900. By 1913, a federal tax on high incomes had become law. By the end of World War I, the wealthy faced a 77 percent tax on income over $1 million.

The 1918 tax act that established this stunning 77 percent rate still remained on the books when Warren Harding took office in March 1921. Under the act’s provisions, the top federal tax rate had by then only dipped slightly, to 73 percent. Businesses also faced an excess profits tax, and the heirs of the wealthy faced an estate tax that subjected bequests over $10 million to a 25 percent levy.

Mellon went to work to change all that, and he had — after Harding appointed him secretary of the treasury — all the political levers he needed to make that change happen. Over the course of the 1920s, Mellon’s efforts would shield the nation’s richest from any serious inconvenience at tax time.

“The social necessity for breaking up large fortunes in this country,” Mellon pronounced at one point, “does not exist.”

Most of the country disagreed. Collier’s, a top mass-circulation magazine, pointed out that Britain’s super rich, in the early 19th century, had banished the Highland Scots from their moors and mountains to make way for private hunting preserves. America’s two wealthiest families, Collier’s observed, held enough wealth to buy up all the farmland in New England and create their own preserve!

But Mellon and his conservative allies adeptly neutralized this distaste for grand private fortune. They built a national network of “tax clubs” that barraged Congress with petitions that labeled high tax rates on the nation’s highest incomes a “national emergency.” Local small-town bankers flocked to these tax clubs. The bankers personally didn’t make enough to benefit from the cuts in tax rates on the super rich that Mellon was proposing. But they worried that rich bank depositors facing high tax rates would yank out their deposits and put their money in tax-exempt government bonds instead.

Mellon’s most shameless tax giveaway to the rich would sweep through Congress in 1926, by a whopping 390-25 margin. The fiery New York GOP progressive, Fiorello LaGuardia, found himself in that lonely twenty-five. With the Mellon plan in effect, LaGuardia argued in vain, the income tax would no longer have the capacity “to prevent the accumulation of enormous fortunes, and the control of industry and commerce that goes with such large fortunes.”

The final legislation that Congress deposited on President Calvin Coolidge’s desk gave Mellon most everything he wanted: a cut in the top income tax rate down to 25 percent, the repeal of the gift tax, and a halving of the estate tax rate. For Mellon personally, the savings would be munificent. Estimates would put his net worth, just over $80 million in 1923, as high as $600 million — over $9 billion in today’s dollars — six years later.

The repeal of the federal gift tax, meanwhile, would enable Mellon to end-run what remained of the estate tax — and start shifting his fortune to his heirs, grandson Timothy Mellon eventually among them.

This 21st-century Mellon would go on to do his grandpa proud. Timothy Mellon began feeling his plutocratic oats in the Reagan years. President Reagan, Mellon would later write in a self-published autobiography, “understood that people did best for themselves when shackled with the least amount of governmental constraints.” Americans, Mellon believes, have become too dependent on the government for help and schools too beholden to teacher unions.

“Black Studies, Women’s Studies, LGBT Studies, they have all cluttered Higher Education with a mishmash of meaningless tripe designed to brainwash gullible young adults into going along with the Dependency Syndrome,” he has angrily fumed.

Timothy Mellon made his initial big-time foray into political cash just over a decade ago, as the top donor defending an Arizona law that essentially required police to racially profile locals who looked like they might be in the country illegally. He first became a player nationally in 2018, with a $10 million outlay to a super PAC supporting House Republicans.

Mellon’s most recent dip into the political waters: a $5 million donation earlier this month to the two Republicans in the Georgia Senate run-offs. That contribution alone will put Mellon in the upper reaches of this year’s political donor class top 1 percent. But Andrew Mellon’s grandson still remains nowhere near Sheldon Adelson’s giving level.

In the 2020 election cycle, Adelson and his wife Miriam poured over $215 million into right-wing political spending groups, making him the nation’s top political donor. The pair first won that number-one ranking in the 2012 election cycle, the initial set of elections after the Supreme Court’s 2010 Citizens United ruling. That decision essentially killed off meaningful limits on campaign spending.

No billionaire took more advantage of the resulting anything-goes atmosphere than Adelson. His household would rank eighth in political contributions for the 2014 cycle and second in 2016, before regaining the number-one slot in both 2018 and 2020.

Adelson’s influence within Republican Party ranks would, amid all this cash, become legendary. By early 2014, GOP presidential hopefuls were shuttling to Las Vegas, notesthe New York Times, “for what critics called an audition before the Republican Party’s most coveted and fearsome moneyman.”

In the 2020 election, reports Politico, Adelson’s campaign contributions “accounted for more than one-quarter of all Republican outside spending on President Donald Trump’s behalf.” Over the last five years, his dollars supplied over a third of the funding for the prime super PAC serving Republican candidates for the House of Representatives and a quarter of the funding for Senate Republicans.

His total outlay for right-wing electioneering: over half a billion dollars since 2010.

But Adelson did more to shape American politics than write checks to candidates and political committees. In 2015, the casino magnate secretly bought up Nevada’s most influential communications outlet, the Las Vegas Review-Journal. The paper would later become the first major daily paper in the country to endorse Donald J. Trump for president.

Sheldon Adelson, in the end, amassed a personal fortune many times larger than the stash that Andrew Mellon extracted from the economy of his time. Adelson’s heirs will likely now wield an influence considerably more potent than Mellon’s heirs, and that would be going some. Timothy Mellon hardly stands alone. His cousin, Richard Mellon Scaife, bankrolled the rise of the Heritage Foundation, the ideological mothership of modern right-wing orthodoxy.

So Adelson — through his immense fortune — could remain a powerful force in American life for generations to come. Or not. The rest of us do have an option. We can restore limits on what men — and women — of means can “invest” in the political process. We can, even more crucially, put in place taxes stiff and lasting enough to shear grand private fortunes down to something approximating democratic size.

Sheldon Adelman, in other words, need not be immortal.

Sam Pizzigati writes on inequality for the Institute for Policy Studies. His latest book: The Case for a Maximum Wage (Polity). Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970  (Seven Stories Press).