Why It’s So Hard to Tax Billionaires

Photograph by Nathaniel St. Clair

A recent NPR story attempted to explain why it is so hard to tax billionaires. The expert NPR interviewed for the story ticked off the usual ways the 1 percent avoids paying its fair share of taxes:

Billionaires have the best accountants who know all the loopholes. Their wealth isn’t in income, but in assets. They often move to states (like Texas) that don’t have a state income tax, and move their money to offshore tax havens. They live off tax free loans. Legislation to tax billionaires goes nowhere because wealthy coal barons like Democratic Senator Joe Manchin don’t believe in taxing the “job creators,” a notion that has been debunked again and again. (Basically a thriving middle class creates jobs, while billionaires invest their profits in real estate.)

What NPR didn’t say, and what the corporate and corporate-sponsored media never say, is that it is hard to tax billionaires because billionaires rule America and they don’t want to be taxed.

“We live in a nation owned and controlled by a small number of multi-billionaires,” says U.S. Sen. Bernie Sanders.

Our political system is now “an oligarchy with unlimited political bribery,” says former President Jimmy Carter.

Americans like to think they live in a democracy, but a peek behind the curtain shows the real power lies not with the people, but the super rich. This fact seems obvious, but in the corporate media and corporate-sponsored media, this basic truth is still considered a radical notion fit only for magazines like, well, this one.

Thomas Picketty and other left-leaning thinkers have long maintained that the billionaire ruling class is hostile toward democracy because true democracy means sharing power with the masses. While a few prominent billionaires (Bill Gates, George Soros, Tom Steyer, Michael Bloomberg) like to portray themselves as pro-democracy and socially responsible, the overwhelming majority are anti-democratic and ultra-conservative, especially on economic issues. As Benjamin Page, Jason Seawright, and Matthew Lacombe wrote recently in The Guardian, “Most of the wealthiest US billionaires – who are much less visible and less reported on – more closely resemble Charles Koch…Obsessed with cutting taxes, especially estate taxes – which apply only to the wealthiest Americans.”

These conservative billionaires don’t talk publicly about their politics because the self-interested economic policies they work to implement are highly unpopular with American people. Take the wealth tax, a recent poll found that two-thirds of voters approve of it. You would think then that a wealth tax would be a slam dunk.

Not so much.

This billionaire class runs the country stealthily (through dark money groups, campaign contributions, owning the media, etc.), because doing so outright would make Americans wake up to the fact that their democracy has been hijacked by oligarchs.

Instead we find shadowy billionaire-funded groups like Americans for Prosperity spending millions to get their hand-picked candidates into elected office, candidates who have agreed to promote the billionaires’ agenda—like no wealth tax.

Recently, however, this reluctance to speak out has begun to fade. More and more, today’s super rich don’t even try to hide their disdain for paying their fair share. Elon Musk recently whined that U.S. Sen. Ron Wyden’s call for higher taxes on billionaires was targeting people like himself. “Eventually, they run out of other people’s money and then they come for you.” New York supermarket magnate John Casimatidids said politicians who are peddling a wealth tax—Wyden, Bernie Sanders and Elizabeth Warren— “are just nuts. They’re trying to change our way of life, and it’s not going to happen. If they don’t like the United States the way it is, I’m buying them a one-way ticket to Venezuela.”

Hedge fund manager Leon Cooperman recently complained that paying his fair share of taxes would be unfair. “The idea of vilifying wealthy people is so bogus,” he said.

Catsimatidis and Home Depot co-founder Bernard Marcus penned a recent piece in the Wall Street Journaltitled, naturally, “Making Money is a Patriotic Act.” “[W]e have nothing to apologize for, and we don’t think the government should have more of our profits,” they wrote.

That more and more billionaires are speaking out publicly shows how little concerned today’s real ruling class is about public opinion.