Current Affairs

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The Wall Street Journal Makes The Case For Expropriating Billionaires

The paper says redistributing the wealth of the 735 richest people would “only” give every single person $14,000. But that would be amazing.

The Wall Street Journal has a new editorial that makes a very compelling argument that we should seize the wealth of America’s billionaires and give it to the poor. 

Of course, this is not what the WSJ thinks it is arguing. The editors are ostensibly making an argument that billionaires should be allowed to keep their wealth and that expropriation would be a very silly and useless idea. The article is called “Eat the Rich? They’re Not Even Filling.” The editors’ argument is that all of the wealth of all of the billionaires, if seized and used for more socially beneficial purposes than vanity space travel, would not pay for “what progressives want.” They point out that the U.S. has 735 billionaires, with combined assets of $4.7 trillion. (This sum is growing constantly, of course—Bezos alone accumulates over $200 million a day.) Then they show that $4.7 trillion is insufficient to fund certain large government programs: 

What could the U.S. buy for $4.7 trillion? To start, it’s barely enough to cover the Build Back Better agenda that Mr. Biden pitched last year. The BBB bill tried to game Congress’s budget rules by phasing out programs early to lower the price. But if everything were made permanent, as Democrats intended, the cost would be $4.6 trillion over 10 years, according to an estimate by the Penn Wharton Budget Model. Don’t even consider Medicare for All, which analysts have pegged at something like $33 trillion over a decade. What about paying down the national debt, which West Virginia Sen. Joe Manchin worries about? As of last Monday the Treasury said debt held by the public is $23,877,671,033,998.57. In other words, all the assets of all American billionaires could pay off less than 20%. This also doesn’t include the unfunded liabilities for promised benefits under Medicare and Social Security.

But what if, they ask, we simply “take everything the billionaires own and divvy it up”? That would give every American “about $14,000.” The WSJ comments “if that sounds lower than you hoped, it’s because very large numbers are hard for humans to grasp intuitively.”

In fact, personally, I think $14,000 sounds like quite a large sum of money for literally every American from ages 0-100+ to get, especially when considering that it comes from only seven hundred and thirty five people, that is, a group approximately ¼ the size of the population of North Pole, Alaska. You’re saying that every one of us could have $14,000 overnight from just the assets of this tiny group of people? 

Perhaps $14,000 is a pittance to the Wall Street Journal—this is, after all, the paper that once posed the question “Is $30,000 a Month Too Much to Spend on Wine?” and whose Friday edition comes with a grotesque real-estate section literally called “Mansion.” But for about ¼ of the country (83 million people), that’s more than their entire net worth. That is to say, with just the assets of this tiny group of people, you could radically transform tens of millions of human lives. People could get out from under the burden of debt, they could avoid eviction, they could afford to go to the doctor. We could do even more for people if we gave the billionaires’ money only to the poor, and could probably give everyone in the bottom 30 percent or so a sum large enough to make a down payment on a house and never have to fork over rent to the landlord again. I’m glad the Wall Street Journal has raised the possibility of just seizing all of these 735 people’s assets and giving them out to the rest of us, because they have inadvertently shown that the social benefits of this would be colossal. (When you consider that a small amount of money has much greater utility to someone with no money than someone with a lot, from a purely utilitarian standpoint the policy is a no-brainer.)

But what about the WSJ’s point that this money would not fund Medicare For All? The editorial board is trying to show the limits of what billionaires’ wealth can buy in order to show that a robust welfare state is in fact extremely expensive, and “a Scandinavian welfare state can’t be funded by raiding Elon Musk, Jeff Bezos, and pals.” As we’ve seen, that doesn’t mean we shouldn’t raid Musk and Bezos, because the Journal’s own hypothetical shows us that we should. But it does mean that the WSJ is right when it says that taxing the super-rich alone will not pay for Medicare For All. The Journal says that “Democrats say they only want to tax the rich, but progressives would be back soon enough for the doctors, lawyers, small-business owners, and everyone else.”

Now I, for one, am perfectly fine with taxing wealthy lawyers and doctors, even if they aren’t billionaires. But more importantly, the Journal here is pushing the classic right-wing insinuation that Medicare For All just takes your money, without giving you anything in return. In fact, understanding Medicare For All as imposing a big new tax on you is deeply misleading. M4A is better thought of as paying the government for health insurance rather than paying a for-profit employer. The “price tag” matters much less than how much people are spending on healthcare. (A detailed explanation of how to think more sensibly about financing M4A is here.)

It doesn’t matter that you can’t fund M4A without taxing the middle class, because the tax is a replacement for their insurance premiums. It’s designed to save them money. You, too, will learn to love taxes when you see how taxes that fund good services can actually leave you with more money at the end of the day than you would have had otherwise. The WSJ draws attention, as usual, to the high taxes paid in Scandinavian countries without discussing the other side of the balance sheet: what the residents of those countries get for their money. In doing so, like all other right-wing ideologues, the WSJ misleads people into thinking about the issue irrationally, hiding the benefits and looking only at the costs. (Interestingly, when it comes to issues like chopping down rainforests, the right are all about “cost-benefit analysis.”) 

The one important point for Democrats to come from the WSJ editorial, however, is that they need to not act as if the only new taxes they will ever impose will be on billionaires. Instead, they need to be honest about the fact that good social programs use tax money but then repay it through the benefits they give people. To say we’re only going to tax the rich is to implicitly adopt the right-wing stance that taxes on the middle class and working class are inherently unfair and parasitic, when in fact they are actually just a way of routing payments for services through the (democratically elected) state rather than for-profit corporations that eat your money and are incentivized to give you as little for it as possible. 

So: The Wall Street Journal is correct that a welfare state requires more than mere expropriation of billionaires; it requires routing ordinary people’s payments for certain services through the state, via taxes, rather than through private bureaucracies. The Journal is also right to observe, however, that if we did expropriate America’s 735 billionaires, we could lift a staggering number of people out of poverty and transform their lives forever. We could also reduce the absurd concentration of power that has accumulated in the hands of billionaires, and thereby make our country vastly more democratic. Let us be grateful to the paper’s editors for putting this proposal on the table and showing us the good it could do. 

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