In their 1983 classic “King of Pain,” The Police sings, “There’s a rich man sleeping on a golden bed. There is a skeleton choking on a crust of bread. The song is almost 40 years old and rings as true now as it did when Ronald Reagan was in the White House.
As millions of Californians work two or three jobs to feed their families, the collective wealth of Californian billionaires has soared to $ 960 billion in January.
Almost four decades after police put the crisis of economic inequality to music and a president pledged that the economic fallout would eradicate poverty, the problem has worsened.
Our basic social contract is broken. Free market capitalism and laissez-faire government have failed us. If they worked, Americans wouldn’t beg for food on our streets while the ultra-rich multiply the wealth they will never need. But there is a solution.
If we tax the richest in society with an extreme wealth tax, we can afford smart agendas to rebuild the middle class, while improving tax justice and reducing the concentration of wealth.
Yes, that will require the sacrifice of a small portion of very lucky people. But believe me, they can handle it.
How can I know? I am one of them.
As someone who has been fortunate enough to make a very good living as the co-founder of a successful business, I don’t want to increase my personal net worth at the expense of my fellow Californians.
I can pay more, I should pay more, and I reject the misconception that wealthy Californians are the job creators who will leave the country with our money if we are asked to pay what we owe.
This is why I support California’s extreme wealth tax, which would impose a 1% annual excise tax on “extreme wealth,” defined as more than $ 50 million per taxpayer. The measure also adds an additional 0.5% tax rate on wealth above $ 1 billion. In California, that means about 15,000 families – the richest 0.07% of our population – would be affected. The tax would bring in around $ 22.3 billion a year.
Think about what we can fund with this: better public schools, more affordable health care, and dramatically increased services for homeless Californians, to name just a few examples.
Some in my tax bracket may argue that there is already an extreme wealth tax in the form of income tax. The truth is, the rich are really good at avoiding income tax. As long as successful leaders don’t sell any of their billions of dollars in stocks, they don’t have to pay a dime in taxes on that wealth.
The wealth tax remedies this injustice by taxing all wealth, whether it has been realized in the form of income or not. With wealth tax, billionaires would be taxed whether or not they sell assets, just like the average homeowner who pays annual property taxes based on the value of their home.
And at a time when we could all use a bit of unity, it doesn’t hurt that the Wealth Tax is incredibly popular among voters from both parties – nearly 70% of voters support Californian wealth tax worth $ 100 million or more, which means they pay two cents for every dollar in their wealth portfolio.
Surprised by this majority? You shouldn’t be. Californians understand that the system is designed to benefit the rich and big business. They understand that the ultra-rich and powerful have rigged the rules so much in their favor that the richest 0.1% pay a lower effective tax rate than the poorest 99%, and the wealth of billionaires is 40% higher than before the start of the COVID crisis.
Ultimately, it is the least that the wealthiest among us can do to mend a broken economic system. If the wealth tax would help reduce the concentration of wealth – which is a good thing – it is far from a radical redistribution. Mega millionaires and billionaires typically earn returns on the value of their assets several times higher than the wealth tax rates. But it is a start.
I pledge to do my part and encourage all who find themselves in similar circumstances to stand up for our country. It is a question of human decency.
If you have $ 50 million, I assure you that your family will be taken care of for the rest of their life, whether or not they pay a little more tax.
Joe Sanberg is a progressive business leader and co-founder of the socially conscious financial company Aspiration. He founded CalEITC4Me, one of the state’s largest anti-poverty programs, which has put more than $ 4 billion back into the pockets of low-income California families.