This is Richard Wolff from Democracy at Work responding to another question from our Patreon
community - one of those Ask Prof Wolff questions. This one comes from 'Grave Gauss'
and refers to the billionaires we hear so much about. And asks what are these arguments about
why we can't or mustn't tax them. Can we tax them? How would we? Those are the issues 'Grave Gauss'
wants me to talk about and I'm happy to do so. First, some basics. The United States has passed
countless tax laws raising/lowering this or that, subjecting this or that to taxation. That's been
going on for the entire history of the U.S. All it takes is for the relevant legislative authorities:
the state legislatures in each of the 50 states, the city councils in the city,
and, at the federal level, the House of Representatives, the Senate, and the President,
to agree and pass the legislation. That's all. Can we tax billionaires? Of course we can.
Just like we have taxed every other group, industry, region, city, state, where the
political conditions enable the votes to be there. That's what it's about. Will the elected officials
take the steps to tax those who are the super rich (and who have become relatively much richer
in recent decades - at least relative to the 99 percent of the rest of us.)
And this is crucial. Because this allows me to explain to you very
simply why we don't tax billionaires in anything like the way that most Americans in most polls
have indicated they would prefer. The majority would prefer what the majority does not get. We
call ourselves a democracy, but something's not working here. And why? Because the super-rich,
the billionaires, the big corporations, the one percent, they've understood this situation from
day one. They know that they are outnumbered in any democratic process. Universal suffrage means
that the majority rules and the vast majority are not billionaires. And those who are at the
top are a tiny minority. Employers are a tiny minority relative to employees - billionaires,
millionaires, a tiny minority relative to the 99 percent of the rest of us.
So the rich long ago understood the smart thing to do is to take a portion of your wealth
(after all that's what you have a lot of)... take a little bit of it, because that's all you need,
to buy the political system... you make people running for office need a lot of money to do it:
to buy television time, to buy exposure, to hire expensive ad firms, to hire big staffs. You know,
all of that. You make it a system - a voting system - depending on a lot of money.
Because who has a lot of money to give to the candidates? To the parties? Yeah, the super rich.
They give. And woe to any candidate who doesn't suck up to those at the top.
Because their enemies will get what they don't see. Can sometimes a politician from below
make it by relying on the mass of people each to give a little bit? Yes. Bernie Sanders did that,
others have done that. Very hard to do, but it can be done. But in the normal run of things,
unless you've got a very stressed out system, it's the people with the money who buy the system
that makes sure they don't get taxes. It's simple smarts to spend 10 million dollars
to buy politicians who can save you billions from the taxes they agree not to put on your money.
But suppose all that changed. Suppose we, the mass majority, were politically determined
to say 'hey, hey, hey, we are the majority. If we believe something is reasonable we can pass it.'
Is that possible? Yes, our system is made to work like that. And most of the work has been done.
Since the majority - the big majority - already agrees on what it wants. And the minority has had
it's say and that hasn't changed what the majority feels is necessary, fair, just, and appropriate.
Okay, so let's go. Here are some examples. In the United States we do not tax most property.
Now, it's very important for everyone to understand this. A property tax
doesn't apply to the wealth you own in the form of stocks and bonds if that generates an income
to you - dividends on your stocks or interest on your bonds and so on. You pay an income tax on the
income the wealth generates for you. But you do not pay a tax on the value of the property.
But now let's shift to another kind of property: your home. That's the kind a lot of people have,
not just the super rich. Let's look at that. If you own a home in the United States and,
say, you rent it out, or part of it, you have to pay an income tax on the rental income you get
from your house. And here's crucial: you must pay a property tax on the value of the house
to the community where it's located every year. In other words, if you own property
in the form of a house you pay on any income a tax that it generates. And you pay on the value
of the property. But if you're rich enough to own stocks and bonds (and the richest 10 percent of us
own 80 percent of the stocks and bonds so we know exactly what the situation is)...
if you're rich enough to own stocks and bonds (and that's what the super rich rely on)
you get away with, well, it's close to murder. You are required to pay tax on the income it
generates. But you're not required to pay any property tax - neither to the federal government,
nor the state government, nor the city government, on the value of your property.
We let people who are rich enough to own stocks and bonds avoid a property tax. Whereas we make
the homeowner pay double - for the income and for the value of the property. There's no reason for
that. There's not much logic in it, either. It is a terribly unfair system favoring the super
rich who have spent a ton of money buying a ton of politicians to keep it that way.
If you raised a property tax to the same rate that is now paid by homeowners and land owners
who are required to pay a property tax... if you apply the same rate to stocks and bonds
that you do to that kind of property we would be raising vast amounts of money. That could for the
state governments, for the federal government be money that could be used to relieve the rest
of us from the tax burdens we now carry. Money that could pay for many of the social programs
we need by taxing those who've gotten away with no property tax for generations.
And that's part of how they got to be so wealthy. We would just begin to make it
up. And it would still leave the wealthy with a good bit of the wealth they have - the tax
being a relatively small percentage per year. I could go on, but I won't take more of your time.
Of course we could tax the billionaires. Many other societies do. We should have,
we could have. And the only question is if we have the courage to do it now, when the survival of
this planet and the American system depend on it. If these, and other kinds of videos making these
and parallel points are something you think can move this country (which I assure you
it can - that's why we do it) then I'm asking you now: partner with us, share, give us some support,
if you can, financially. It'll enable us to reach that many more people that much sooner.