Photograph Source: Daniel Oberhaus – CC BY 2.0
Is centi-billionaire Washington Post owner Jeff Bezos now writing the paper’s editorials himself? Of course not. But the Post editorial board’s recent rant, Meta’s stock plunge shows the right – and wrong – way to tax wealth, could make the objective reader wonder otherwise.
It’s not that the Post’s arguments against current proposals to tax the rich so obviously would favor Bezos. Editorial board members shouldn’t abstain from opining on an issue simply because Bezos may have a stake in the outcome. So, logically, if they’re acting objectively, they’ll take his side on occasion.
That said, if the editorial board’s opinion should line up with Bezos’ financial interest — in this case to the tune of literally billions in tax dollars — the board has an ethical obligation to base its conclusions on logic not the least bit flimsy or, worse yet, contrived. On that front, the board has failed miserably with its latest reflections on taxing wealth.
The Post editorial writers contend that the recent nosedive of Meta founder Mark Zuckerberg’s personal fortune — a 73 percent decline from its September 2021 peak — demonstrates the “folly” of current proposals to impose taxes on the ultra-rich based on their wealth or their unrealized gains. Under either of those approaches, Bezos would be coughing up billions in tax. Under the current system, as ProPublica has reported, he’s enjoying close to a free ride. But Zuckerberg’s losses, the Post editorial board believes, confirm the “wisdom” of this current system.
If an unrealized gain amounts to income that should be taxed, the Post logic goes, then an unrealized loss would be deductible. In Zuckerberg’s case, the deduction likely would “wipe out his entire income tax liability.” The editorial leaves that point dangling, as if the reader should obviously agree that the Post has uncovered a gaping flaw in current wealth tax proposals. Except that the Post has uncovered no such thing. The pending proposals to tax unrealized gains all take the potential for unrealized losses into account.
Why the Post editorial writers see this point as problematic remains a mystery. Business owners, after all, may recognize substantial losses after seeing large profits. And investors routinely recognize both gains and losses. Indeed, had Zuckerberg sold Meta shares at their peak and reinvested the proceeds poorly, resulting in substantial losses, he would have recognized gains followed by losses. The Post fails to explain why this result under current law rates as acceptable but the identical result under proposals to tax unrealized gains would not be.
