Modest Tax on Billionaires Could Erase Budget Shortfalls of Every Single US State
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David Rockefeller, Sr., the only surviving grandchild of America’s first billionaire, has achieved still another distinction. At age 95, he currently rates as the oldest billionaire on the new Forbes magazine annual list of America’s 400 richest.
David Rockefeller, on this year’s list, has plenty of billionaire company. Every single one of the 400 deep pockets on that list holds an individual fortune worth at least $1 billion. In 1982, the first year the annual Forbes 400 list appeared, only 13 Americans could claim billionaire status.
Back then, nearly three decades ago, the Forbes 400 held a combined fortune of just $91.8 billion, the equivalent of about $208 billion in today’s dollars. The current top 400, Forbes reported last week, hold over a trillion dollars more in wealth. Their current combined fortune: $1.37 trillion.
The ten richest Americans on the new Forbes list carry, all by themselves, a combined net worth of $270 billion, more than the inflation-adjusted net worth of the entire initial Forbes list back in 1982.
How much of an impact on our troubled nation could these staggeringly massive accumulations of wealth have if modestly shared -- or taxed?
One quick answer: A 15 percent “wealth tax” on all personal assets over $1 billion would this year raise $145.5 billion, more than enough to cover the entire $140 billion budget shortfall America’s 50 states are facing in the current fiscal year.
The 400 billionaires on the new Forbes list, after paying that tax, would still average $2.4 billion in personal net worth, over 37,000 times the $65,400 net worth that NYU economist Edward Wolff earlier this year calculated for the typical American family.
But the Forbes billionaires aren’t exactly rushing to do much sharing. The most politically active of them are rushing in the opposite direction. They’re bankrolling candidates and causes dedicated to cutting taxes on America’s wealthiest -- and erasing regulations on the corporations that make these wealthy wealthy.
One sign of our billionaire times: Former Bush White House political chief Karl Rove is now pouring millions of dollars into attack ads against tax-the-rich candidates on this November’s ballot. American Crossroads, the group that Rove has directing this operation, is grabbing most all its funding -- 91 percent, in the mostly recent Federal Election Commission filing period -- from billionaires.
Another example: In California, oil and gas billionaires Charles and David Koch -- who both now sit in the Forbes 400 top ten -- have joined to help bankroll a ballot initiative designed to kill the landmark clean energy legislation that state lawmakers passed into law four years ago.
The billionaire brothers, as a powerful New Yorker magazine profile detailed last month, have also been generously underwriting the “grassroots” Tea Party drive.
Fans of great fortune don’t dwell of this sort of billionaire politicking. They talk up instead the generosity of billionaire philanthropists. Last week, these cheerleaders for wealth concentration were exalting Facebook billionaire Mark Zuckerberg -- whose net worth tripled last year to $6.6 billion -- after he announced plans to endow a $100 million fund for school reform.
But billionaire public policy initiatives, in school reform and every other field, almost always come with ideological strings. In education, billionaire philanthropy is pushing schools toward incentive-based, test-driven “reform” approaches that education researchers have shown to be largely ineffective.
In the meantime, notes Wisconsin teacher Bob Peterson, an editor at a top progressive education journal, reforms that do show promise -- like providing poor kids ready access to books -- go neglected and underfunded.