Ownership of AI matters. If it's used to make the very few even impossibly wealthier then we've missed an opportunity to utilise what is a new public good for the benefit of all.
Great article Ellen. Thanks for the flying the flag!
Won't the capitalists just exit? In the past, there may have been bigger advantages to being physically located in the US or UK, but many will now choose to simply take their capital and jobs somewhere they receive more favorable treatment and actually feel welcomed. This is already happening in the UK, with record numbers of millionaires leaving after the non-dom tax changes. (https://www.imidaily.com/europe/uk-lost-10800-millionaires-in-2024-as-non-dom-changes-spark-record-exodus/)
Additionally, I think this conversation is missing a key cause of all of the issues you bring up (which are certainly problems): the US dollar's default in 1971, when it became irredeemable in gold and we transitioned to a fully fiat currency system. I highly recommend taking a look at https://wtfhappenedin1971.com/ for further reading.
I don't think it's super easy to take capital and jobs elsewhere. Or super beneficial. If that were so, nearly every American company would move to Asia where they wouldn't have to deal with labor laws, unions, or minimum wages. That really only works for some companies—like cruise lines—but most still see a huge benefit to being an American company.
And you're right—there are so many factors that all converged on that 1970-1980 era, the currency being one of them!
So what? As made clear in the title, billionaires did not build the future. If they want to leave, let them leave. Even if they do, that doesn’t absolve them of all tax obligations. The US taxes global income, not just residential income. Even when living abroad, I filed IRS returns and paid US taxes (minus any foreign tax credits; notably this means if I move to a low tax country, the irs will claim the difference). The only way out of that is to renounce citizenship and then not invest in US companies. I find that unlikely, but if that’s what they want to do, I am honestly okay with that. Foreigners can’t lobby Congress, donate to super PACs, or manipulate politics. As for gold, this has been a red herring / scape goat for bad government policy since the Reagan admin. The size of the world economy has long exceeded what gold or precious metals alone can back. Not to mention that backing the economy off the market dynamics of a single industry is foolish. Observe the market manipulation in the silver market or in crypto currencies to see what that looks like. History has plenty of good examples too (the Spanish empire comes to mind, currency warfare during the 30 years war is another). Any attempt to return to the gold standard would be deflationary (read: recession). I have many misgivings with the Fed and how it works, but saying it is the root cause of wealth inequality is woefully misguided.
I like to think of this way: there is a social contract implicit in the market economy. In exchange for wealth inequality, markets are meant to steer resources to the most productive / necessary areas of the economy. This on balance benefits everyone and makes up for the wealth inequality. So the question now is… have America’s billionaires truly improved productivity and addressed such desperately unfulfilled market needs to justify their disproportionate wealth?
You know my views on these things, Elle, so I can only say I very much enjoyed reading this! Appreciate you including so many numbers so people can see the disparities clearly.
One might also argue -- and present plenty of evidence -- that the 1950s, when top tax rates remained in the 90-91 percent range, represented an even bigger "boom" for the American economy. One way or the other, the years since Reagan and "trickle-down" have clearly ushered in a very different type of "growth": the growth of the billionaire class at the expense of the middle class and the poor.
What's interesting is why that was the case. Why didn't the government earn more money when we taxed the rich? Because the rich reduced their income so they didn't have to pay it—by investing more in their companies and employees which allowed their companies to be better funded and more innovative than if the money had just been paid out to the execs.
I think the ethos was different in the 50s. We'd just been the leading force for good against evil in WWII, and selfish entitlement was so very much not in vogue. Investing in ideals was. Democracy, the ideal, had won, so investing in what that made possible was inspiring. When Reagan, who was a tool by the way, and in more ways than on--he was a tool of GE and other corporate interests--he represented the interests of all the weirdos like Paul Wolfowitz, who didn't have a war to run their profiteering through, so they went to war on the middle class with Reagan as the Deregulator. That Wolfowitz went over to the World Bank is telling about a lot of things, and none of them trustworthy.
Thanks for a thought-provoking article. I don't know anything about Augustus Doricko, but from that one quote it doesn't sound like he disagrees with you. His prescription is for rich people to "[p]roactively ensure everyone in the nation reaps a portion of the reward of [their] labor..." I imagine y'all disagree about methodology, but aren't you aligned on the principal?
We're agreed on the problem, and I don't think he necessarily disagrees with my solution. I replied to his tweet with these thoughts and he replied positively. https://x.com/ADoricko/status/1967253861703536671
He's definitely being reasonable. Where we differ is that I don't think founders can work hard and donate public works and expect that to be enough, they also have to pay workers more.
I suppose it sounded to me like he wasn't opposed to paying workers more, but we don't need to argue over what a third-party is thinking LOL. I'm in alignment with you on most things, and I hope that by engaging collaboratively with folks like Mr. Doricko that they can help bring more and more people under the big tent of this vision. -^)
i agree it’s only because founders want more money and power for themselves - and it’s not spun that way. there is a propaganda machine made to fear monger and convince people it’s in their best interest to feed the rich.
Interesting article, but here are a few dissenting thoughts from this position. This article seems to presume a government of the people, by the people, that works FOR the people, etc. and I do not believe we have that. Personally, I am more concerned about the ruling class with six-figure salaries who have net worths of nine-figures+ that have insider information the rest of us don't have and create rules that the rest of us need to legally abide by and who become lighting rods for lobbyist influence than I am of billionaires who have earned their wealth through the creation of a publicly traded and shared company that has generated immense wealth for the GDP as a whole. It seems to take a serious thought leader, someone more rare than 1 in 20 people, to really synthesize information and grasp what needs to be done to drive a company from sapling to great oak status in business and if a CEO can only make 20x the lowest worker, I don't believe this is fairly accounted for. To extend that to equity seems almost offensive. Ownership of shares is necessary for a controlling stake in a company- why should a founder not have a controlling stake in his or her company? An obvious example, Elon is not a 1 in 20 individual. There aren't 10 Elons in a graduation class of 200. He's not 1 in 100, not 1 in 1000, and so while I agree that the stratification of wealth has been growing and growing (back in the Occupy Wall Street era the slogan was down with the 1%, and now it seems to be the 0.1% with the gulf ever widening) I also do not feel like this article offers a good way out of this situation. To say 'stop pretending billionaires built the future' is semantic -- you would not have Apple or Pixar or Tesla et al. without the driving, creative thought leaders at their helm, or their workers to drive progress forward. Further, to advocate that a corrupt government be in charge of collecting more money from billionaires seems to miss a large part of the equation. We printed an incredible amount of money during the COVID era and that is largely what has driven inflation, coupled with a lack of fiscal responsibility in government spending. All around me there are roads in need of repair, bridges in need of repair, infrastructure and train lines in need of repair, etc. The government spends money on the wrong things, and it doesn't seem obvious or intuitive to me that if we "tax billionaires so the highest paid worker only makes 20x the lowest paid worker" that the government will then use those tax dollars more responsibly for the benefit of all of us.
Whether we have a good government or bad government, we have to lay the groundwork at individual companies and in individual states. Pay people more at those two levels and we can raise the bar federally when we have an opportunity.
And I'm curious what you think founders should earn for all that they do? There are plenty of camps here and i'm not sure the best one. But some options on the table include: Tax the wealthy (they still earn all that money, but some of it goes to the societal good), force a minimum floor (they are forced to pay workers more so they necessarily earn less), or other ideas?
We need to get this message out in sound bites that the masses will embrace. Then we replace all of Congress- both sides- with people willing to serve the nation.
We must FIRST overturn or simply throw out two rulings from the Extreme Court: (1) Citizens United and (2) McCutcheon. Until we can get big money out of politics, we'll go nowhere.
It is human nature to want to innovate. Economic incentives are important but I agree that a higher tax rate is not gong to stop an entrepreneur with a great idea. And the history you cite proves that.
Yes, Elle. Agreed. But this is a values issue, and we can't legislate values. The rich don't value anything other than, essentially as you describe, themselves. We now have a leader who reinforces that. What is the timeline on this?
https://link.sbstck.com/redirect/1ecff596-cb63-4df9-a52f-e896193313fd?j=eyJ1IjoiNmFleGR1In0.xGgraWYPZgZXOoTlHnBmf0WXRCMQ6rJKHwQv5Hmx7N0
Ownership of AI matters. If it's used to make the very few even impossibly wealthier then we've missed an opportunity to utilise what is a new public good for the benefit of all.
Great article Ellen. Thanks for the flying the flag!
Won't the capitalists just exit? In the past, there may have been bigger advantages to being physically located in the US or UK, but many will now choose to simply take their capital and jobs somewhere they receive more favorable treatment and actually feel welcomed. This is already happening in the UK, with record numbers of millionaires leaving after the non-dom tax changes. (https://www.imidaily.com/europe/uk-lost-10800-millionaires-in-2024-as-non-dom-changes-spark-record-exodus/)
Additionally, I think this conversation is missing a key cause of all of the issues you bring up (which are certainly problems): the US dollar's default in 1971, when it became irredeemable in gold and we transitioned to a fully fiat currency system. I highly recommend taking a look at https://wtfhappenedin1971.com/ for further reading.
I don't think it's super easy to take capital and jobs elsewhere. Or super beneficial. If that were so, nearly every American company would move to Asia where they wouldn't have to deal with labor laws, unions, or minimum wages. That really only works for some companies—like cruise lines—but most still see a huge benefit to being an American company.
And you're right—there are so many factors that all converged on that 1970-1980 era, the currency being one of them!
So what? As made clear in the title, billionaires did not build the future. If they want to leave, let them leave. Even if they do, that doesn’t absolve them of all tax obligations. The US taxes global income, not just residential income. Even when living abroad, I filed IRS returns and paid US taxes (minus any foreign tax credits; notably this means if I move to a low tax country, the irs will claim the difference). The only way out of that is to renounce citizenship and then not invest in US companies. I find that unlikely, but if that’s what they want to do, I am honestly okay with that. Foreigners can’t lobby Congress, donate to super PACs, or manipulate politics. As for gold, this has been a red herring / scape goat for bad government policy since the Reagan admin. The size of the world economy has long exceeded what gold or precious metals alone can back. Not to mention that backing the economy off the market dynamics of a single industry is foolish. Observe the market manipulation in the silver market or in crypto currencies to see what that looks like. History has plenty of good examples too (the Spanish empire comes to mind, currency warfare during the 30 years war is another). Any attempt to return to the gold standard would be deflationary (read: recession). I have many misgivings with the Fed and how it works, but saying it is the root cause of wealth inequality is woefully misguided.
I like to think of this way: there is a social contract implicit in the market economy. In exchange for wealth inequality, markets are meant to steer resources to the most productive / necessary areas of the economy. This on balance benefits everyone and makes up for the wealth inequality. So the question now is… have America’s billionaires truly improved productivity and addressed such desperately unfulfilled market needs to justify their disproportionate wealth?
You know my views on these things, Elle, so I can only say I very much enjoyed reading this! Appreciate you including so many numbers so people can see the disparities clearly.
Oh so good to hear from you Antonia! I'm so glad you liked it 🥰
Incisive reporting and analysis! Thank you Elle & team for setting the record straight.
I like your point.
But,also, the higher the marginal rate the craftier the innovations to avoid taxes
Probably so, but they do that now with it at the lowest rate ever. Bezos paid something like $30 in taxes last year. Thirty, as in only one zero.
He gets a pass cuz he's so classy
Is he now?
Definitely! Jeff Bezos and even more so, Laura Sanchez are the very model of humility, modesty, grace and natural beauty.
If I was ever so fortunate to meet that royalty in person, I would bow down and kiss the ground they walked on.
Ha!
yer funny
May I have your permission to show your comment to some people to demonstrate that there's at least one person who appreciates me
One might also argue -- and present plenty of evidence -- that the 1950s, when top tax rates remained in the 90-91 percent range, represented an even bigger "boom" for the American economy. One way or the other, the years since Reagan and "trickle-down" have clearly ushered in a very different type of "growth": the growth of the billionaire class at the expense of the middle class and the poor.
Federal Revenue since wwii has stayed steadily between around 16-19% of national income regardless of marginal rates.
But the uber-wealthy haven't always been so ostentatiously vulgar
What's interesting is why that was the case. Why didn't the government earn more money when we taxed the rich? Because the rich reduced their income so they didn't have to pay it—by investing more in their companies and employees which allowed their companies to be better funded and more innovative than if the money had just been paid out to the execs.
I think the ethos was different in the 50s. We'd just been the leading force for good against evil in WWII, and selfish entitlement was so very much not in vogue. Investing in ideals was. Democracy, the ideal, had won, so investing in what that made possible was inspiring. When Reagan, who was a tool by the way, and in more ways than on--he was a tool of GE and other corporate interests--he represented the interests of all the weirdos like Paul Wolfowitz, who didn't have a war to run their profiteering through, so they went to war on the middle class with Reagan as the Deregulator. That Wolfowitz went over to the World Bank is telling about a lot of things, and none of them trustworthy.
Thanks for a thought-provoking article. I don't know anything about Augustus Doricko, but from that one quote it doesn't sound like he disagrees with you. His prescription is for rich people to "[p]roactively ensure everyone in the nation reaps a portion of the reward of [their] labor..." I imagine y'all disagree about methodology, but aren't you aligned on the principal?
We're agreed on the problem, and I don't think he necessarily disagrees with my solution. I replied to his tweet with these thoughts and he replied positively. https://x.com/ADoricko/status/1967253861703536671
Yep, his responses seem reasonable to me and I reckon he's taking a somewhat different path to a very similar place.
He's definitely being reasonable. Where we differ is that I don't think founders can work hard and donate public works and expect that to be enough, they also have to pay workers more.
I suppose it sounded to me like he wasn't opposed to paying workers more, but we don't need to argue over what a third-party is thinking LOL. I'm in alignment with you on most things, and I hope that by engaging collaboratively with folks like Mr. Doricko that they can help bring more and more people under the big tent of this vision. -^)
Oh totally agree!!!!
i agree it’s only because founders want more money and power for themselves - and it’s not spun that way. there is a propaganda machine made to fear monger and convince people it’s in their best interest to feed the rich.
we need to be having more of these conversations.
Interesting article, but here are a few dissenting thoughts from this position. This article seems to presume a government of the people, by the people, that works FOR the people, etc. and I do not believe we have that. Personally, I am more concerned about the ruling class with six-figure salaries who have net worths of nine-figures+ that have insider information the rest of us don't have and create rules that the rest of us need to legally abide by and who become lighting rods for lobbyist influence than I am of billionaires who have earned their wealth through the creation of a publicly traded and shared company that has generated immense wealth for the GDP as a whole. It seems to take a serious thought leader, someone more rare than 1 in 20 people, to really synthesize information and grasp what needs to be done to drive a company from sapling to great oak status in business and if a CEO can only make 20x the lowest worker, I don't believe this is fairly accounted for. To extend that to equity seems almost offensive. Ownership of shares is necessary for a controlling stake in a company- why should a founder not have a controlling stake in his or her company? An obvious example, Elon is not a 1 in 20 individual. There aren't 10 Elons in a graduation class of 200. He's not 1 in 100, not 1 in 1000, and so while I agree that the stratification of wealth has been growing and growing (back in the Occupy Wall Street era the slogan was down with the 1%, and now it seems to be the 0.1% with the gulf ever widening) I also do not feel like this article offers a good way out of this situation. To say 'stop pretending billionaires built the future' is semantic -- you would not have Apple or Pixar or Tesla et al. without the driving, creative thought leaders at their helm, or their workers to drive progress forward. Further, to advocate that a corrupt government be in charge of collecting more money from billionaires seems to miss a large part of the equation. We printed an incredible amount of money during the COVID era and that is largely what has driven inflation, coupled with a lack of fiscal responsibility in government spending. All around me there are roads in need of repair, bridges in need of repair, infrastructure and train lines in need of repair, etc. The government spends money on the wrong things, and it doesn't seem obvious or intuitive to me that if we "tax billionaires so the highest paid worker only makes 20x the lowest paid worker" that the government will then use those tax dollars more responsibly for the benefit of all of us.
Whether we have a good government or bad government, we have to lay the groundwork at individual companies and in individual states. Pay people more at those two levels and we can raise the bar federally when we have an opportunity.
And I'm curious what you think founders should earn for all that they do? There are plenty of camps here and i'm not sure the best one. But some options on the table include: Tax the wealthy (they still earn all that money, but some of it goes to the societal good), force a minimum floor (they are forced to pay workers more so they necessarily earn less), or other ideas?
Nice!
And in my mind I was hearing, softy,
If I was a rich man
And Starting dancing
You're my kind of person.
Thank you for that headline
My readers wrote it, they are much bolder than I am 😆
We need to get this message out in sound bites that the masses will embrace. Then we replace all of Congress- both sides- with people willing to serve the nation.
We must FIRST overturn or simply throw out two rulings from the Extreme Court: (1) Citizens United and (2) McCutcheon. Until we can get big money out of politics, we'll go nowhere.
It is human nature to want to innovate. Economic incentives are important but I agree that a higher tax rate is not gong to stop an entrepreneur with a great idea. And the history you cite proves that.
Exactly. People love to build stuff! They love to change the world! They don't need $200 million to do it, and they haven't in the past!
Yes, Elle. Agreed. But this is a values issue, and we can't legislate values. The rich don't value anything other than, essentially as you describe, themselves. We now have a leader who reinforces that. What is the timeline on this?
What we can do about it is dispel the myth, and build companies that pay people more. I'm about to share examples of some that do.....
Looking forward to that.