On February 7th, I wrote a post titled America’s Mood: Eat the Rich. I really appreciated the conversation and comments on that post. It’s only been a four months, but it seems like this “mood” is only intensifying. I realize my social feeds may just be showing me this stuff because the AI can tell I’m interested, but here’s some of what I’ve seen lately:
-On Saturday night, Elizabeth Warren held a Town Hall meeting here in Oakland (pictured above). They first had it scheduled in a small auditorium, but there was so much interest they moved it to a baseball field at Laney College (one of our local community colleges — Ralph takes classes there). It was a free event. We arrived about 30 mins before the event was supposed to start and the line was over a mile long! There were over 6500 people! The Warren team wanted to make sure everyone had a chance to get on the field, so the event started late — but it was worth the wait.
She covered a variety of topics, giving overviews of her many (thorough!) plans, and she also talked about how she would fund the initiatives: a two-cent tax on the ultra wealthy. Here’s how she explained it would work: For every dollar over $50 million, so starting with the fifty million and first dollar ($50,000,001), the tax would be 2 cents, and 2 cents for every dollar over that. She said it would be like a homeowner’s property tax, but “include the diamonds, the stock portfolios, the Rembrandts, and the yachts.”
Her justification for the tax is that every company who has made it big, did so because of programs funded by all of us — like public schools, and our bridges and roads. She said, “You make it big? Good for you! That’s great. Fabulous that you made it big. But pitch in two cents so everybody else gets a chance to make it in this country.”
This two cent tax on the ultra wealthy would provide enough funds to pay for universal childcare, universal pre-k, free college, student loan forgiveness, and a whole bunch of other good stuff.
As you can imagine, the crowd in attendance thought this sounded really good, and very fair.
-Abigail Disney, the granddaughter of Disney co-founder said that the compensation of current Disney CEO, Bob Iger, is insane. She likes Bob Iger and thinks he’s a good CEO, but his compensation is 1,424 times that of the median Disney employee, and she thinks that is ultimately harmful.
-After that article came out, she wrote a Twitter thread on the subject and it’s really good. She goes into bonuses, what a living wage means, and why offering educational opportunities for employees isn’t as good as it sounds. Definitely worth a read.
-Abigail Disney is not alone in her thinking. Forbes agrees with herthat when CEOs earn so much more than their employees that it can have a corrosive effect.
-Related fun fact I read in this New Times article: A half-century ago, a top automobile executive named George Romney — yes, Mitt’s father — turned down several big annual bonuses. He did so, he told his company’s board, because he believed that no executive should make more than $225,000 a year (which translates into almost $2 million today).
-The Current Affairs Editor in Chief debunked the myth that global capitalism lifts all boats.
–This tweet + source article. IBM got a $342 million dollar tax refund. Amazon got $129 million. All because of the new tax plan that lowered corporate tax rates. $4.3 BILLION went to corporate tax refunds. (But we need to cut social security and not raise minimum wages?)
–A response to the above tweet. It’s been said before: the rich want socialism for big business and big finance, and capitalism for everyone else.
-Welcome to southwest Connecticut, where the gap between rich and poor is wider than anywhere else in the country. This separation is by design.
-A 2015 address of Elizabeth Warren talking about housing as a means to build wealth and how this helped build America’s middle class, but an entire legal system was built to ensure Black people were excluded. There’s video and transcript — if you watch the video it starts getting into it around minute 16.
-“You judge me for having children, for needing assistance. You hate me for wanting the stability you take for granted. You force me to perform to prove my worth. Then you still deny me access to fair, affordable housing.”
-Tariffs have cost the average household about $419 per year. Not great when you consider this study saying much of American’s middle class can’t handle a $400 surprise expense.
-Maybe only tangentially related, but I can feel the frustration from people who suspect that the way their taxes are being allocated is corrupt, when I read articles like this: The architect of GOP gerrymandering also engineered the strategy for a citizenship question the current administration is trying to put on the census, in order to rig it and manipulate where spending goes.
Your turn. What do you think of the Romney quote about limiting a CEOs income? What are your thoughts when I suggest that the current American mood is “eat the rich”? Do you feel like you’ve witnessed a similar sentiment?
Do you think the idea of a two-cent-per-dollar tax on income over $50 million is unfair? Or do you feel the ultra wealthy are currently under-taxed compared to the rest of the population, so that a two-cent tax would just mean that the ultra wealthy are simply paying their fair share?
36 thoughts on “America’s Mood: Eat the Rich – Part Two”
This was also a really interesting look at why it can be hard to tax the wealthy, because they effectively hide so much of their wealth (and also because of policies that make that both possible and effective).
I appreciate the link, Laura. Thank you!
I think Warren has a really sound, well thought out plan. I didn’t know that about George Romney, but sounds quite reasonable and fair
I really like that Romney quote. I agree that it sounds reasonable and fair.
I think it’s really sad that Mittens couldn’t have ended up more like his father, and instead talked about “makers and takers”.
Back when Mitt Romney ran against Obama, I didn’t mind him. I voted for Obama, but I felt like Romney was a legitimate candidate. But these days, I keep wanting him to be openly and boldly anti-Trump, and I’ve come to the conclusion that he’s just not going to do it.
Hi Gabby, i appreciate your writing and views. While some might view as “eat the rich” atmosphere, I don’t. “Eat the ..,” implies animalistic behavior. I see the current climate as very human. It reflects a call for accountability. I believe, like many others, that humanity is in a crisis like we’ve not faced before because of how we’re changing climate. We need to be accountable to one another. We’re all in this together. I have much experience, as you know, in a society where there is little to no accountability. In Haiti, a tiny tiny group of people live in world class wealth and the luxury that goes with it while the poor masses (millions) live in squalor. Thus, I believe a population that is calling for accountability among those who have been amassed enormous wealth is a healthy endeavor. I believe that working toward a world where everyone matters is a pathway to more joy, meaning and fulfillment for all. Thanks for inviting our ideas on the topic.
I love hearing your thoughts, John. And I hear you on the “animalistic behavior” and a preferred focus on accountability among those who have amassed enormous wealth, versus an “eat the rich” mentality.
Over here in a “red” state (Phoenix, AZ), I don’t see much of that mood at all. Taxes on the wealthy are seen as unfair, and the main reasoning seems to be that since they earned that money, it’s not fair to make them pay more than anyone else. I hear this from my high school students, but also see it from our politicians at the state level who are busy passing tax cut after tax cut. Other than the Red for Ed teacher movement of last year (which is trying to stay alive, but not nearly as powerful), I don’t see a lot of support at all for taxes on the rich. In fact, a proposal to make up the school budget shortfall by a special tax on state millionaires was defeated resoundingly last year. I personally am in support of more taxes and responsibility for the wealthy, but I don’t see it reflected in my state. I wonder if what you’re seeing, Gabby, is influenced by both your social media and the “blue” area of California where you are. It really shows the giant differences of opinion between areas of our country. :-(
“a proposal to make up the school budget shortfall by a special tax on state millionaires was defeated resoundingly last year.”
That’s such a bummer!
This has been on my mind a lot lately. The latest statistic from Deutsche Bank said that 70% of the wealth in our country is owned by 10% of the richest in our country. That is wrong on so many levels. I have no problem with being wealthy or successful, I have a problem with greed and the system being rigged to help the wealthy and hurt the poor and the middle class.
“I have no problem with being wealthy or successful, I have a problem with greed and the system being rigged to help the wealthy and hurt the poor and the middle class.”
Okay…but if I’m following correctly, essentially what you’re saying is, the tax system is rigged, it doesn’t work, so therefore increase taxes.
Come on now. I answered you respectfully and you don’t like my answer so now you’re just being a brat?
The intention is clearly to get the ultra wealthy in our country to pay their fair share of taxes. Why is that objectionable?
I don’t mean to be a ‘brat.’ That was not my intention. I don’t usually do this. Of all the spaces on the internet to really get into important discussions, I know this is a safe space. I would never want to take it too far. I am learning.
Got it. I thought your comment was an example of intentionally trying to misunderstand. I apologize I misread your tone.
Deciding on a specific amount of money that suddenly is considered wealthy is very arbitrary. I have read many of your posts and it is clear that you, yourself, have plenty of money. The same principles that apply to those with more money than you also apply to you. Most people in the world don’t have close to what you have. Are you okay with people deciding how much of your money is yours and what is theirs? This is a slippery slope and it won’t stop with only the billionaires.
I’m curious about what about this process seems arbitrary. Economics is an evidence-based science. “Wealthy” might seem like a subjective term, but the government has to draw lines around fuzzy terms all the time. Government sets the minimum wage, decides at what income level people are eligible for services, defines retirement age, etc. Our ideas might differ about at what income level we would consider ourselves poor, but the federal government still sets a poverty threshold every year. Why not set a wealth threshold too?
I can’t speak for Gabby, but if this movement doesn’t stop with billionaires and eventually leads to small tax increases for millionaires, and even thousandaires like me, I would be fine with that. If Warren proposed an extra 2% tax on all annual income over $100k in exchange for universal childcare, pre-k, free college? I know that some would feel differently, but I would be more than happy to make that trade.
We’d like to believe that it’s evidence-based science but as we look around, it’s obvious that it isn’t. Human nature plays into economics more than anything else. At the end of the day, as long as one person has more than someone else, there will be an outcry, rebellions, revolutions.
You say that you’d be happy to have an extra 2% tax on all annual income for $100k, but as soon as there is universal childcare, pre-k, free college, we will be moving on to the next thing. There are millions of people who would say as long as you have access to clean running water and a roof over your head, you have enough. We are already past that point, and people are demanding more. Don’t you see that? It’s a slippery slope. Now anything else is up for grabs. What if there are many, many more people who believe that 2% isn’t close enough. Would you be okay with giving 10%?
This is definitely not evidence-based science. This is human nature we’re talking about. The world will only improve when people give because they want to, when we take care of one another because we care about each other. Leave the government out of it.
If people are so anxious to improve the quality of life for others, why wait for the government to do something about it? It’s a very hands-off, comfortable way to look like we want to change the world without actually doing anything about it.
Find someone who is struggling financially and give them your money directly. If you truly believe that people “should” be giving of their money to those who have less, then you don’t actually need the government.
“The world will only improve when people give because they want to, when we take care of one another because we care about each other. Leave the government out of it.”
Candace, you can believe this if you want, but it’s not true, and there is a lot of data to support that this is not true. It’s wishful thinking.
How will “find[ing] someone who is struggling financially and giv[ing] them [my] money” help fix crumbling bridges, broken down public transportation systems, or public schools? People give where they want to, and it’s often to help themselves or those they personally are interested in – that’s why the public schools in rich Northwest DC have PTAs with budgets in the millions to pay for all sorts of playground renewals, after school programs and enrichment teachers, while PTAs for public schools in struggling Southeast DC have almost nothing. Governments, when they work, are there to look out for those inequities and make sure the money flows where it is needed. Though I will concede that many U.S. governments – local, state and national – have prioritized issues based on where their donations come from. But the influence of corporate money in politics is another, important, aspect of wealth inequality because I don’t believe government money will be distributed in the most efficient, fair way despite higher taxes as long as Citizens United is good law.
“There are millions of people who would say as long as you have access to clean running water and a roof over your head, you have enough. We are already past that point, and people are demanding more.”
No we’re NOT past that point. Flint?? Increasing homeless populations, especially among families and veterans?? YOU, and I, and Gabby, may be past that point, but as a nation we ARE NOT.
It’s true, Candace. We are not millionaires, but we are middle class and have enough money. (In case you are curious, based on this calculator by Pew Research, we are right in the middle of middle class — not upper or lower.)
We are middle class, and we also pay our share of taxes. We have no money that we hide. We have no overseas accounts. There are no loopholes we use to avoid taxes. We have no unearned income that we get taxed at a lower rate. As self-employed people, we actually have a relatively high tax rate, with zero paid employment benefits (like a matched retirement account or a healthcare plan).
I’m not interested in overtaxing the ultra-wealthy, I just want everyone to pay their fair share. Why is that objectionable?
If you think the ultra-wealthy are already paying their fair share, I encourage you to read up on how the progressive tax rates were supposed to work, and how they’ve been eroded so that currently, many multi-millionaires and billionaires pay a lower tax rate than average American families. Just because the ultra-wealthy aren’t necessarily breaking tax laws, doesn’t mean they are paying their fair share.
P.S. — I have no fear of a slippery slope on taxes. As a middle class family, I would gladly support something like a 2-cent tax rate increase on any dollar we earn over the middle class average, in order to support programs like paid childcare and universal pre-k. We no longer need those services, but know they would improve our communities, and our country as a whole, which would in turn benefit all citizens, not just those with small children.
I would love to pay a much, much higher tax rate if it meant that my family didn’t have to bear the massive individual burden of childcare, healthcare, and transportation. In France, the tax rate is drastically higher than the U.S., but it covers daycare, preschool, public school, college, subsidizing public transit for everyone, and healthcare. You don’t go bankrupt there if you get cancer.
In the U.S., you feel like you’re on your own. For now, I have a great income. But I also still owe $30,000 beyond what my health insurance covered for my daughter’s birth last year. Her birth was complicated, and in the immediate aftermath I wasn’t sure if I would be able to go back to work at all (so, goodbye health insurance, and house, and retirement savings…). So I can both have a high income and feel economically insecure.
I think this kind of economic insecurity makes us all feel more stingy and territorial. How can I think about helping others when I am consumed with worry about meeting my family’s needs, today and in an uncertain future? I don’t think “socialism” sounds so bad if it means spreading the risk and spreading the prosperity so we’re all more prepared to weather hardship. As it stands, a working professional in American can realistically plunge into poverty because her child is born with an unexpected disability that requires the parent’s full-time care. No amount of financial prudence between college graduation and the baby’s birth 5 or 10 years later can be enough to prepare for that risk singlehandedly. And I don’t think the answer is to push childbearing back until after first reaching “financial security,” nor leaving childbearing only to the rich.
You should check out this article. For those who don’t want to click on the link, an important point they make is that a typical American earns an income 10 times the income received by the typical person in the world. So, maybe the middle class allow themselves to believe that they are not in the spotlight, but you’re looking at the world in a very narrow view. Why should the money stay in the US? Why not share it with the rest of the world? Surely your country has taken advantage of others to get where you are today. Isn’t this finger-pointing at the ‘very wealthy’ a microcosm of what’s actually happening on a global basis?
You also pointed out that you don’t think it’s fair for rich CEO’s children to get their money or tax benefits. Why stop at tax benefits? Do you really think it’s fair that your children get a superior education from the wealth that you made- not them?
America is well-known to be the richest country in the world, and the 10x income stat is not news to me (though it may be news to some).
It feels like you are starting a new topic of conversation, and I’m not sure what your aim is, but I’ll respond anyway.
You ask: Why should the money stay in the US?
My response: It shouldn’t. At least not all of it. As the richest country in the world, we should be hugely generous with countries who need assistance. Some years we have been better than others, but since Trump became President our global assistance is down. This bums me out.
A world without poverty and hunger would be a much more stable world, with much less warfare and strife. Working to eliminate poverty benefits everyone on Earth — not just those who are in need. This is something that’s really important to me — in fact, I’ve lobbied in Washington with ONE.org to encourage continued funding of USAID. If the bulk of our military spending went to helping reduce poverty worldwide, I would be delighted. And our country would be safer.
You ask: Do you really think it’s fair that your children get a superior education from the wealth that you made- not them?
I’m not sure what you’re referring to here. I’m a huge proponent of public education. We use public schools for elementary, middle, and high school. We use public schools for university and community college too. I don’t think our earnings have necessarily affected the education of my children — by that I mean, there are people across the entire socio-economic scale at the schools my kids attend; a family doesn’t need to be middle class to access the education my kids access.
I actually have a similar question, though I’m coming from a much less skeptical perspective re taxation, I think.
I feel like I have a lot of money. My income is not high (exactly average for my state) but for various reasons my expenses are low, and I graduated from college with no debt. Plus, when my parents die, I will probably inherit a couple thousand dollars.
At what point should I start feeling bad about myself? I feel bad about the billionaires. It seems like so much extra money, but I do suppose there are people who say the very same thing about me–and who aren’t wrong! I genuinely don’t know how many non-essentials I should allow myself (or what counts as essential) while there are people in my country who don’t have healthcare, or how hard I should push for my own taxes to go up. For these purposes, the definition of “wealth” does seem arbitrary. (I realize that the government does establish arbitrary definitions, but when they do they must consider a whole bunch of constraints that I need not consider in my personal life. What I’m wondering is how on a personal level we should be defining wealth so that we are not stuck in the same ethical muck as those who are obviously stuck there–only less obviously.)
My worries about this have been heightened lately as I’ve realized how much wealth my partner has. We aren’t married (and who knows if our relationship will go that direction ultimately). But considering going forward and trying to build an honorable life together, how should I approach it? Should I ask him to sell his boat and take fewer out-of-state vacations? Sell his overly large house and move into something more modest? Insist on sending any children we might have to public school?
Or more generally, as someone who sympathizes with the “eat the rich” sensibility, am I being inconsistent by being in a relationship with someone who has things like a boat and a big house and a second home?
This may all be very weird and too small a scale for it to matter, but I genuinely want to know how to be consistently ethical, and I’m having a hard time what that means in light of the fact that there is an important sense in which wealth *is* arbitrary. I’m really hopeful that you have a perspective on this, Gabby, or that some of your readership does!
Interesting questions, Sam. I don’t think there’s any point where you “need to feel bad about yourself.” My advice: Learn about the structural issues that cause poverty. Then use your vote and voice to support programs that reduce poverty, promote equality, and fight injustice; encourage your fellow citizens to do the same. Then pay your taxes so those programs can be paid for.
Of course, we could also approach your questions from a more philosophical angle. What do we owe our fellow human beings? Should anyone own anything? Why or why not? At what point does wealth become unethical? I love discussing stuff like that — though I don’t pretend to have easy answers.
This is a place maybe religion can help? For example, Mormons are taught that 10% of everything you earn “belongs to God” — and it’s not unusual for Mormons to be quite generous with donations to all sorts of causes. In fact, I remember when Romney shared his tax returns, he had a much higher rate of charitable giving than any other presidential candidate — giving 29.4% of his income to charity.
Hi Sam–on the slim chance you see this, you might consider reading “Your Money or Your Life”. It’s a great finance book that walks you through finding YOUR financial priorities so that your spending reflects your values. I found it immensely helpful as an individual in your situation who ‘married up’ and struggled with it initially.
I grew up in Westport, CT, the town that is profiled in the article about rich/poor gap in SW CT. The article perfectly captures what I remember: mostly nice, kind people who ‘just didn’t want the riffraff to get in’. (We definitely felt like riffraff!)
At one of the first playdates I had after we moved (I was in 2nd grade), the very wealthy parents (think Mike and Nancy’s parents in Stranger Things!) welcomed my parents to the town and said, “We think it’s wonderful there’s a place like Westport for people to move up to.” My parents (non-profit/education types) were horrified.
In high school Westport kids went over to the next town, Norwalk, to buy pot. Norwalk was virtually all black, right across the town line, and it was virtually all white on our side. When we played Norwalk in sports, it was the white kids vs the black kids.
It was a difficult place to grow up (although a very, very pretty town, and many very wonderful people; I think all the kids were struggling with the wealth expectations, even the wealthy ones), and everyone in my family was unhappy living there. We were bohemian and laid back and not rich, and we all felt out of place. I don’t understand why people don’t get that diversity (racial, economic, political) is a good thing for everyone.
Your comment reminds me of the article I linked to on my Friday list about how schools are becoming even more segregated instead of less segregated. So discouraging.
All good points, and I recognize that for no good reason was I born into a white middle class family and we are living in a (small) home in the Bay Area, which I count as lucky. I grew up in a family where I had to pay my way for everything, and not just the extras, but the necessities too. It feels luxurious to be able to afford dental care now b/c that was iffy at sometimes! But I do feel threatened when, as it happened last weekend, I walked out of a small co-op grocery store in SF and, when I didn’t give money to the guy with the sign by the entrance (and for the record, often we do), he yells at me, “ENJOY YOUR PRIVILEDGE!” I’m still trying to make sense of that…
Oh man. I hear you. And is there anything more maddening than the fact that the Bay Area has seemingly made zero progress in helping our homeless population find housing and jobs and healthcare? We’re told we have the brightest minds working in Silicon Valley. Clearly there’s a massive amount of wealth created by companies like Apple and Google and Facebook. How is it possible that we haven’t put all that brain power + money to work solving homelessness? The Bay Area should be a full-on Utopia by now, right?
Ha! She is prescribing the Islamic wealth tax, zakat. 2,5% on all assets, shares, jewels, camels, the whole caboodle above a certain threshold.
I agree that this is America’s mood, but the GOP and CEOs are doing a fantastic job of playing “don’t look at the man behind the curtain” and redirecting Americans to be angry at the middle class, rather than the corporate greed/tax breaks and the ultra wealthy. Our tax structure considers a household to have wealth indicative of a massive tax rate (including both Fed and State taxes) when that household earns just $250,000. That might make sense in an incredibly rural and poor area, but for much of the areas of our country where the majority of money is earned (nearer to small and large cities), $250,000 is the low end of middle class. Our tax structure needs to start looking at the top-down, not the bottom-up. We need to consider flat taxes with absolutely no breaks, loopholes, or refunds. If we skip flat-tax and retain brackets, we must base those brackets off regional averages, not national averages. While a family of 4 can live very comfortably in rural Ohio on $80k/yr, that’s hardly enough to cover housing costs for a family of 2 in the NYC metro area, but both are being placed in the same tax bracket and taxed at the same rate. There is so much broken about in our system and it will never be fixed by politicians who fall entirely in the upper echelons of earners and arrange laws to benefit only themselves and the corporations who pay their dividends.
Here’s the problem I have with constantly increasing taxes on the ultra rich. There are actually two types of ultra-rich:
1. Those who hide their wealth and don’t pay their fair share.
2. Those who don’t hide their wealth and do pay their fair share.
If you don’t hide your wealth, most ultra-rich people are paying about 40 – 60% in taxes (depending on state).
When lawmakers talk about new taxes on the rich, the new taxes are not going to reach the people in category 1. They are cheating the system already and will not hesitate to avoid the new tax.
All you do when you add new wealth taxes is give a bigger incentive for people in the second category to move to the first. It simply becomes a reason to start hiding money.