TechDigits

Tech news
Friday, Apr 26, 2024

A global tax on millionaires would benefit the wealthy as well as the poor

A global tax on millionaires would benefit the wealthy as well as the poor

An open letter was recently published that was signed by more than 100 millionaires and billionaires, pleading to their class brethren – particularly those participating in the World Economic Forum’s recent online Davos summit – to adopt a fairer international tax system.
“To put it simply, restoring trust requires taxing the rich. The world – every country in it – must demand the rich pay their fair share,” the letter states. “Tax us, the rich, and tax us now.” In its conclusion, the letter adds a pretty astute assessment of the situation we face around the world. This is not a group of self-hating rich folk but rational-minded people looking to protect their own self-interest, as convoluted as that might sound.

“History paints a pretty bleak picture of what the endgame of extremely unequal societies looks like. For all our well-being – rich and poor alike – it’s time to confront inequality and choose to tax the rich. Show the people of the world that you deserve their trust,” the letter continues. “If you don’t, then all the private talks won’t change what’s coming – it’s taxes or pitchforks. Let’s listen to history and choose wisely.”

What the signatories are talking about is the fact that global capitalism has ratcheted up inequality, its primary contradiction, to a point that it is unlikely to be able to sustain itself much longer. This was already a huge problem prior to 1Covid1-19, but it has only got worse.

As Oxfam found in a report published earlier this month, the 10 richest men in the world have doubled their cumulative fortune from $700 billion to $1.5 trillion since the start of the pandemic. A new billionaire was created once every 26 hours from March 2020 to November 2021, it found.

But, on the flip side, according to Oxfam, more than 160 million people are so far estimated to have slipped beneath the poverty line. This egregious inequality, the report says, is responsible for more than 21,000 deaths per day.

Separately, the World Bank said in a report in September last year that the incomes of the bottom 40% globally fell by 6.7% compared to pre-pandemic projections. Inflation is surely eating away at wages even more at this point.

A major driver of this inequality has been the tax system. For example, in the United States, former President Donald Trump’s signature tax cuts to the wealthy and corporations created fertile ground for the pandemic hand-up. The Trump tax cuts lowered the corporate tax rate by 40% and, in its first year, doubled the number of companies paying zero taxes from 30 to 60. This included major firms such as Amazon.com Inc., Netflix Inc., Chevron Corp., Eli Lilly and Co., and Deere & Co., some of which have faced heavy criticism over working conditions.

The Trump estate tax cut – essentially a giveaway to the ultra-rich – triggered a 50% nosedive in IRS revenue from wealthy individuals, according to a Bloomberg report. This figure went from around $20 billion to just over $9 billion in 2020.

So, what can be done? Well, there’s already been talk about a global minimum tax. Late last year, the Organisation for Economic Co-operation and Development put forward a “two-pillar” solution, following an agreement by G20 countries in October 2021. This will establish a 15% minimum global tax by 2023 – however, analysis from Reuters found that there are glaring, billion-dollar loopholes such as “profit shifting” across countries – a strategy now widely used by major tech companies.

Fortunately, a detailed report by Oxfam, the Fighting Inequality Alliance, the Institute for Policy Studies, and the Patriotic Millionaires has found that a simple wealth tax on the global ultra-rich could raise over $2.5 trillion each year. This would have a graduated rate structure, with a 2% tax on wealth over $5 million, 3% on wealth over $50 million, and 5% on wealth over $1 billion.

The bottom line? This would be enough money to lift 2.3 billion people out of poverty, vaccinate everyone in the world, and ensure the likes of universal healthcare and a social safety net for everyone in low- and lower-middle-income countries, which covers about 3.6 billion people.

This seems a pretty easy fix to save capitalism from itself.

However, the discussion deserves further reflection, given that it wouldn’t be just poorer people who would benefit, but everyone – including the ultra-wealthy. First of all, it’s important to realize that ultra-wealth is not actually cash in hand, in many cases. The world’s richest man, Elon Musk, derives his fortune from stock holdings, namely Tesla, the company he acts as CEO for, and has admitted in court filings that he has debt against this stock.

In his own words, people like him are just in charge of huge “capital allocation” – and that is a responsibility, which no doubt induces massive stress, that no one person should have.

Second of all, there’s a reason why most billionaires live much of their lives in secrecy. They’re not the most popular individuals – and rightfully so, since their wealth often comes from exploitation. Maybe this is why people such as Musk and Jeff Bezos want to escape to another planet, Mark Zuckerberg is trying to create an alternative reality, Bill Gates spends a fortune in the media to make people like him, and Jack Dorsey is delving into ancient meditation practices.

Even your average, everyday millionaires – which actually works out to be quite a lot of older folks, at least in the US – have persistent stress and anxiety. The tension in society is omnipresent.

But, finally, the thing is that even if these guys weren’t in these roles, someone else would be. You can take that to the bank, since their stock-dependent wealth means they are bound by shareholders to juice profits by any means.

In the end, we are not talking about a moral failing of individuals, but a systemic issue that requires a systemic response, namely redistributive policies – otherwise, bring on those pitchforks.

Hats off to the signatories of that open letter who have the wherewithal to see the proverbial writing on the wall.
Newsletter

Related Articles

TechDigits
0:00
0:00
Close
FTX's Bankman-Fried headed for jail after judge revokes bail
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Musk announces Twitter name and logo change to X.com
The future of sports
TikTok Takes On Spotify And Apple, Launches Own Music Service
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
Melinda French Gates Advocates for Increased Female Representation in AI to Prevent Bias
Snapchat+ gains 4 million paying subscribers in its first year
Apple Makes History as the First Public Company Valued at $3 Trillion
Elon Musk Implements Twitter Limits to Tackle Data Scraping, but Faces Criticism for Technical Misunderstanding
EU and UK's Slow Electric Vehicle Adoption Raises Questions About the Transition to Green Mobility
Top Companies Express Concerns Over Europe's Proposed AI Law, Citing Competitiveness and Investment Risks
Meta Unveils Insights on AI Usage in Facebook and Instagram, Amid Growing Calls for Transparency
Crypto Scams Against Seniors Soar by 78% in 2022, Experts Urge Vigilance
The End of an Era: National Geographic Dismisses Last of Its Staff Writers
Shield Your Wallet: The Perils of Wireless Credit Card Theft
Harvard Scientist Who Studies Honesty Accused Of Data Fraud, Put On Leave
Putting an End to the Subscription Snare: The Battle Against Unwitting Commitments
The Legal Perils of AI: Lawyer Faces Sanctions for Relying on Fictional Cases Generated by Chatbot
ChatGPT’s "Grandma Exploit": Ingenious Hack Exposes Loophole in AI, Generates Free Software Codes
The Disney Downturn: A Near Billion-Dollar Box Office Blow for the House of Mouse
A Digital Showdown: Canada Challenges Tech Giants with The Online News Act, Meta Strikes Back
Distress in the Depths: Submersible and Passengers Missing in Titanic Wreckage Expedition
Mark Zuckerberg stealing another idea: Twitter
European Union's AI Regulations Risk Self-Sabotage, Cautions smart and brave Venture Capitalist Joe Lonsdale
Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in
Chinese car exports surge
Reddit Blackout: Thousands of Communities Protest "Ludicrous" Pricing Changes
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
×