June 24, 2019; New York Times
An open letter addressed to the 2020 presidential candidates published this Monday argues strongly in favor of a wealth tax.
“A wealth tax,” the letter writers explain, “could help address the climate crisis, improve the economy, improve health outcomes, fairly create opportunity, and strengthen our democratic freedoms. Instituting a wealth tax is in the interest of our republic.”
The letter itself is not surprising. As Patricia Cohen notes in the New York Times, Senator Elizabeth Warren (D-MA) and Senator Bernie Sanders of Vermont have both advocated wealth taxes, and the idea has attracted broad support. A poll conducted in February found 61 percent of surveyed voters supported Warren’s proposal (versus 20 percent opposed and 19 percent undecided). Warren has proposed an annual tax of two percent on household wealth more than $50 million and a three percent levy on wealth in excess of $1 billion, a tax which she estimates would affect 75,000 families and raise $2.75 trillion over 10 years.
What is more unusual, however, explains Cohen, are the letter’s authors, who include “self-made billionaires like the financier George Soros and Chris Hughes, a Facebook co-founder, as well as heirs to dynastic riches like the filmmaker Abigail Disney and Liesel Pritzker Simmons and Ian Simmons, co-founders of the Blue Haven Initiative, an impact investment organization.”
It is not unheard of for wealthy individuals to oppose tax cuts—back in the 2000s, for example, a number of wealthy individuals, including Bill Gates Sr., opposed cuts in the estate tax. And at times, some, such as Warren Buffett, have indicated that taxes on the wealthy are too low; Buffett famously said it was wrong that he paid a lower income tax rate than his secretary. But a direct call by wealthy individuals to raise taxes that would only fall on themselves? That’s new.
“The letter came together in the last two weeks,” Cohen explains. “Eighteen individuals, spread among 11 families, added their names.”
In the letter, they write, “The top one tenth of one percent of households now have almost as much wealth as all Americans in the bottom 90 percent. Those of signing this letter enjoy uncommon fortunes, but each of us wants to live in an America that solves the biggest challenges of our common future.”
Motivating the call, too, notes Cohen, is recent Federal Reserve data that confirms a remarkable shift of wealth toward the top (with the top one percent having a mean net worth of $9.23 million) even as the bottom fifty percent of the US population has an average net worth of roughly $7,000—a number that falls below zero if consumer durables like cars are excluded.
Why does the nation need a wealth tax? The signers identify six principal reasons:
- Climate Crisis: “A wealth tax asks those of us who have benefitted most from our economic system to help fix one of its most devastating and fatal flaws. “
- Economic Benefit: “America needs a revenue source for… aging infrastructure, child care, and education.” The writers add that using the tax to reduce student debt would “boost entrepreneurship and homeownership rates.”
- Health: The tax would finance improvements in “public health outcomes and extend life expectancies.”
- Fairness: “A wealth tax would help close the large gap in effective tax rates between very rich families and everyone else … This imbalance creates resentment and makes it harder for working-class Americans to achieve social mobility.”
- Democracy: A wealth tax “would slow the growing concentration of wealth that undermines the stability and integrity of our republic.”
- Patriotism: “Those of us in the richest one tenth of the richest one percent should be proud to pay a bit more of our fortune forward to America’s future. We’ll be fine—taking on this tax is the least we can do to strengthen the country we love.”
Among the signers, notes Cohen, in addition to those named above, are Seth Eldridge, husband of Chris Hughes; Seattle entrepreneur Nick Hanauer; attorney Molly Munger, whose father is vice chairman of Berkshire Hathaway; Munger’s husband, Stephen English; Stephen Silberstein, cofounder of Innovative Interfaces; philanthropist and arts patron Agnes Gund and her daughter Catherine Gund; the founding director of Aubin Pictures; Arnold Hiatt, chairman of Stride Rite Charitable Foundation; Justin Rosenstein, a cofounder of Asana; Robert Bowditch Jr., founder of MB Associates, a real estate developer firm and his wife, Louise; and Alexander Soros, deputy chair of the Open Society Foundations. One signer chose to remain anonymous.
The signers conclude with a final call:
Those of us who have signed this letter believe it is our duty to step up and support a wealth tax that taxes us. It is a key to both addressing our climate crisis, and a more competitive, stronger economy that would better serve millions of Americans. It would make America healthier. It is a fair way of creating opportunity. And it strengthens American freedom and democracy. It is not in our interest to advocate for this tax, if our interests are quite narrowly understood. But the wealth tax is in our interest as Americans.