The scale of wealth inequality in America is so vast it can sometimes be difficult to comprehend.
Three billionaires control more wealth than the 160 million poorest combined and the richest member of this tiny, gilded club — Amazon CEO Jeff Bezos — acquires more money every sixty seconds than a typical household does in eighteen months.
Given what the average person lives on, fathoming a billion dollars — let alone the more than $100 billion reportedly held by Bezos as of 2018 — proves a mind-bending task: visualized as a stack of $100 dollar bills, $1 million is already a shopping cart’s worth of money. A billion dollars, on the other hand, could quite literally fill an entire room. Alternatively, imagine saving $50,000 every year: even at this rate, it would still take twenty years to save $1 million and you’d be long dead before ever reaching $10 million — which would take another 180 years. A billion dollars, on the other hand, would take ten times that length: requiring $50,000 in savings every single year for a full 20,000 years — considerably more time than has passed since the end of the last Ice Age.
Wealth inequality has always existed in America, but the collected wealth of the billionaire class is now at levels so stratospheric that it constitutes a new Gilded Age. Since 1989, the total net worth of the richest 1 percent has increased by $21 trillion while the bottom half of Americans have seen their collective net worth drop by a staggering $900 billion.
This state of affairs didn’t come about by accident or as the result of different people’s respective merits or social contributions. It’s not the product of a natural order or the lamentable outcome of an otherwise defensible economic system. Allowing such obscene inequality to exist is a political choice like any other, and it’s one that has long been enabled by the majority of the American political class.
For years, if indeed they’ve even talked about inequality at all, it’s been the practice of most Democrats to whisper in hushed tones that we should ask the rich to pay a little more. Yesterday, Vermont Senator Bernie Sanders put the case a bit more strongly, declaring outright: “I don’t think that billionaires should exist” and “I hope the day comes when they don’t.”
Under Sanders’s newly proposed wealth tax, households worth more than $32 million would be taxed on an ascending scale with fortunes worth more than $10 billion paying an 8 percent net rate. In summary:
Sanders wants to levy a 1 percent tax on wealth above $32 million, for married couples, and then slowly increase the tax for wealthier households: a 2 percent for wealth between $50 to $250 million; 3 percent for wealth from $250 to $500 million; 4 percent from $500 million to $1 billion, 5 percent from $1 to $2.5 billion, 6 percent from $2.5 to $5 billion, 7 percent from $5 to $10 billion, and 8 percent on wealth over $10 billion. Same thing goes for super rich single people, except the wealth thresholds are cut in half. In other words, an unmarried person with $16.5 million in wealth would pay a $5,000 tax, as would a married couple with $32.5 million in net worth.
According to economists Gabriel Zucman and Emmanuel Saez, who advised Sanders during its development, the plan would cut the collective net worth of America’s billionaire class in half in just fifteen years — closing the existing gap in wealth growth between billionaires and the average American family and raising $4.35 trillion over the next decade in the process. As Sanders advisor Warren Gunnels noted, the Walton Family alone would owe the IRS nearly $15 billion more this year if a wealth tax designed along these lines was part of the federal tax code.
By stating the case in such unqualified terms, Sanders is not only offering a remedy to decades of upwards redistribution enabled by both parties — he’s laying the groundwork for a sweeping transformation of American society.
As individuals, billionaires hoard unfathomable wealth — even as some Americans are forced to ration insulin and sleep on the streets. As a class, they collectively exert tremendous political power — using it to preserve and deepen their personal fortunes and the unearned privileges these guarantee, the exploitation of workers and the survival of the planet be damned.
There is simply no path to a more just and democratic society, in other words, that doesn’t involve confronting and reclaiming the obscene wealth and power currently held by billionaires — and with his latest proposal, Bernie Sanders has made clear he intends to do exactly that.