From March 18 to May 14, 2020, more than 36 million US workers lost their jobs, while the wealth of US billionaires increased by more than $368 billion, an increase of 12.5 percent. The net worth of eight of these billionaires has increased by more than a billion dollars each. [Note: These eight billionaires, identified by Inequality.org as “pandemic profiteers,” are Jeff Bezos (Amazon), MacKenzie Bezos (Amazon), Eric Yuan (Zoom), Steve Ballmer (Microsoft), John Albert Sobrato (Silicon Valley real estate), Elon Musk (Tesla and SpaceX), Joshua Harris (Apollo Global Management), and Rocco Commisso (Mediacom). See Chuck Collins, Omar Ocampo, and Sophia Paslaski, “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers,” Institute for Policy Studies, April 23, 2020, https://ips-dc.org/billionaire-bonanza-2020/.]
An Institute for Policy Studies report, “Billionaire Bonanza 2020,” recommended the establishment of a pandemic profiteering oversight committee, passage of a corporate transparency act to discourage wealth hiding, an emergency 10 percent millionaire income tax, and a wealth tax. Acknowledging that enacting a new tax regime on assets would be “challenging in the short term,” the report proposed an emergency 10 percent surtax on taxpayers with incomes of more than $2 million—that is, the richest 0.2 percent of Americans—which would apply not only to income from wages and salaries but also from investment returns. The proposed surtax would raise $635 billion over ten years, the Institute for Policy Studies estimated.
The UK government could raise “up to £174bn [roughly $213 billion] a year to help cope with the Covid-19 crisis if it taxed wealth at the same rate as income,” the Guardian reported in April 2020. Richard Murphy, a professor of political economy at City, University of London, determined that between 2011 and 2018, the United Kingdom taxed income at an average of just 29.4 percent, while wealth—accrued through increased housing prices and personal pensions—had been taxed at just 3.4 percent, making UK taxes highly regressive: When income and wealth are combined, the effective tax rate for the wealthiest 10 percent of the population, the Guardian reported, was 18 percent, much less than the 42 percent effective tax rate for the poorest 10 percent.
Murphy told the Guardian he was not campaigning for a wealth tax as such, but that the UK government could begin to cover some of the coronavirus crisis bill by picking “low-hanging fruit,” such as equalizing the tax rates on income and capital gains, reducing the annual capital gains tax allowance, and abolishing higher-rate tax reliefs for pension contributions.
In the United States, John R. Talbott reported for Truthout that at least one prominent Wall Street figure, Peter Fahey, a retired Goldman Sachs partner, supports a wealth tax to address the pandemic’s toll on the economy. Fahey called on “a core group of thoughtful, patriotic billionaires to step forward” to subject themselves to “the equivalent of a substantial wealth tax to address the Federal budget crisis that will emerge from the COVID-19 crisis.” Talbott himself advocated a “one-time 3 percent wealth tax on the top 10 percent of the wealthiest people in the world” to provide nine trillion dollars in global emergency relief funds.
Wealth tax proposals have received mixed news coverage in the corporate media. Before the pandemic, establishment news outlets, including the New York Times and Washington Post, reported on proposals made by Bernie Sanders and Elizabeth Warren in the context of the 2020 Democratic primary elections. As the COVID-19 crisis has developed, additional outlets, including HuffPost, Bloomberg, ABC News, and the New York Times have also covered wealth tax proposals made in response to the pandemic. The pandemic is “the perfect opportunity for billionaires to justify their existence,” HuffPost reported, but two months into the coronavirus outbreak “America is still waiting for billionaire philanthropists to deliver.” Bloomberg published an opinion piece by a former member of the Financial Times’s editorial board, opposing a wealth tax. ABC News broadcast a report on the topic, featuring French economist Thomas Piketty, author of the book Capital in the Twenty-First Century. After Piketty responded to questions about how much tax he had paid on royalties from his surprise bestseller, he told ABC that the coronavirus crisis “illustrates a virulent inequality” that could lead to the kind of wealth taxes he has advocated. In search of journalistic balance, ABC News also quoted from a Fox Business Network interview in which Larry Kudlow, President Trump’s top economic advisor, asked, “Why do we have to raise taxes? . . . Let’s let people keep their own money.” In April 2020 the New York Times published an editorial by Daniel Markovits, a professor at Yale Law School, advocating a 5 percent tax on the richest 5 percent of households as a means to raise up to $2 trillion in pandemic relief funds.
Larry Elliott, “Wealth Tax Rise Could Raise £174bn to Tackle COVID-19, Expert Says,” The Guardian, April 22, 2020, https://www.theguardian.com/politics/2020/apr/22/wealth-tax-rise-could-raise-174bn-tackle-covid-19-expert-says.
John R. Talbott, “To Confront Coronavirus, We Need an Emergency Wealth Tax,” Truthout, March 25, 2020, https://truthout.org/articles/to-confront-coronavirus-we-need-an-emergency-wealth-tax.
Student Researcher: Weston Pollock (San Francisco State University)
Faculty Evaluator: Kenn Burrows (San Francisco State University)