Even before the Covid pandemic supercharged economic inequality, Vermont Senator Bernie Sanders announced as a 2020 presidential candidate that “billionaires should not exist.” That was a perfectly reasonable argument from a contender to lead a country that in the 1950s maintained a top marginal tax rate of 92 percent. But, as with so many of the senator’s proposals, the notion of taxing the rich down to size proved to be a bit too bold for both parties—and for the pundit class that polices the political discourse to ensure that things don’t get too interesting.
So let me offer a more modest proposal: Let’s tax billionaires—and übermillionaires—back to where they stood when the pandemic surged in March 2020. With authorization from Congress, Internal Revenue Service auditors can calculate the excess profits of the billionaire class and then collect the cash in the spirit of shared sacrifice.
Two years ago, working-class Americans masked up and marched into hospital wards and meatpacking plants to do what they understood was essential work. Their level of sacrifice was immense: Thousands of nurses, hundreds of transit workers, and an untold number of employees in factories and warehouses died from Covid-19. Millions of workers got sick, lost jobs, and faced the threat of eviction and hunger.
It was different for the rich. They decamped to country homes and waterfront villas, where they toted up their winnings from a game that, as Naomi Klein has reminded us, is rigged to reward disaster capitalists.
“America’s billionaires have grown $2.1 trillion richer during the pandemic, their collective fortune skyrocketing by 70 percent—from just short of $3 trillion at the start of the COVID crisis on March 18, 2020, to over $5 trillion on October 15, 2021,” noted a groundbreaking report from the Institute for Policy Studies and Americans for Tax Fairness in the fall of 2021. During the same period, the billionaire class expanded from 614 to 745 members.
The $5 trillion in wealth that was locked up by those 745 billionaires “is two-thirds more than the $3 trillion in wealth held by the bottom 50 percent of US households,” noted the IPS’s Chuck Collins. “The great good fortune of these billionaires over the past 19 months is even starker when contrasted with the devastating impact of the coronavirus on working people. Almost 89 million Americans have lost jobs, over 44.9 million have been sickened by the virus, and over 724,000 have died from it.”
The number of deaths has grown since last fall. So, too, has the inequality. We live in a surreal moment when there is open speculation about whether Jeff Bezos or Elon Musk will be the first trillionaire. One CNBC report suggested Bezos could cross the line as soon as 2026.
Unless, of course, we impose a little pandemic-era shared sacrifice on those who sacrificed nothing at all.
In my new book, Coronavirus Criminals and Pandemic Profiteers, I argue that politicians, Big Pharma CEOs, and billionaires who exploited the pandemic to their advantage must be held to account. There’s much to be said for criminal, civil, and congressional action. But taxing the rich offers a double benefit. It reduces inequality while collecting resources to cover health care, housing, and child care costs for essential workers who have already done their part.
A new study from the IPS, Oxfam, the Fight Inequality Alliance, and Patriotic Millionaires proposes a global “Taxing Extreme Wealth” regime, with graduated rates of 2 percent on wealth starting at $5 million, 3 percent on wealth over $50 million, and 5 percent on wealth over $1 billion. “In the US, roughly 750 billionaires have seen their wealth increase over $2 trillion since March 2020, for a combined wealth of over $5 trillion,” Collins said. “And there are over 63,500 individuals with wealth over $50 million, with combined assets of $12.8 trillion, according to the new report, ‘Taxing Extreme Wealth.’ An annual wealth tax would raise $928 billion a year—enough to eliminate half of household out-of-pocket health expenses in the US.”
That’s a good start. But why stop there? At the height of the pandemic, Sanders proposed the Make Billionaires Pay Act, which would have imposed a 60 percent tax on wealth gains made by billionaires between March 18, 2020, and January 1, 2021. “At a time of enormous economic pain and suffering, we have a fundamental choice to make,” Sanders explained. “We can continue to allow the very rich to get much richer while everyone else gets poorer and poorer. Or we can tax the winnings a handful of billionaires made during the pandemic to improve the health and well-being of tens of millions of Americans.”
Yes! Let’s tax them, but with one proviso. Sanders is too conservative. Let’s borrow a page from the Eisenhower era and claim 92 percent.