“This billionaire NFL owner just paid $100M for a ‘superyacht’ with its own iMax theater,” the tweet began.
Teaser for the reboot of “MTV Cribs”? Not quite.
“I’m pretty sure he can pay my new #UltraMillionaireTax to help the millions of yacht-less Americans struggling with student loan debt,” Sen. Elizabeth Warren (D-Mass.) concluded.
Warren’s rhetoric has grown more pointed as she preps for a 2020 presidential run. (This was just one in a series of tweets calling out tone-deaf billionaires.) But a broader willingness by Democrats to question extreme wealth is the most exciting new development in the political scene.
On Thursday, Sen. Bernie Sanders (I-Vt.) unveiled his “For the 99.8 Percent Act,” a plan that would restore the 77 percent tax on billionaires’ estates and create several new, higher levies for lesser moguls. And Rep. Alexandria Ocasio-Cortez (D-N.Y.), of course, flung wide the doors of debate by floating the idea of a 70 percent marginal tax rate in a “60 Minutes” interview last month.
The pushback has been predictable. Conservatives recoiled at Warren’s tweet and its implied disapproval of capitalism’s spoils. Murmurs of communism follow Sanders wherever he goes. Billionaire Howard Schultz, prepping for his own 2020 run, shrilly denounced Ocasio-Cortez’s ideas as un-American.
He was right, sort of. He’s also right to be more than a little concerned.
The United States has a long tradition of economic optimism, paired with an abiding faith in our own bootstraps. As a people, we’ve spent decades convincing ourselves that we’re a meritocracy (we’re not — look at the average wealth of a Harvard University graduating class), that ours is a classless system (it isn’t — ask economist Raj Chetty, whose research has shown that intergenerational mobility is basically flat), and that the millionaires and billionaires among us deserve their riches because they have invented something novel and necessary and are creating jobs along the way (questionable, at best — how much value has algorithmic stock-shorting really added to our economy? Does it count as job creation if a robot is doing the job?)
Still, as Canadian author Ronald Wright shrewdly observed, “in America . . . the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” A major component of the American dream is the assumption that every citizen is just steps away from grasping wealth with their own two hands. Even the obviously disadvantaged tend to defend the millionaires and billionaires across the way — because, why, that yacht owner could be them in just a few years!
Yet signs indicate that this consensus is beginning to crumble.
According to a 2017 Pew Research poll, only 37 percent of Americans believe that today’s children will grow up to be better off financially than their parents. Gallup found that 61 percent still think that children will have a better life than their parents, but that’s down 10 percent from 1999. And a poll last year by the Associated Press and MTV suggested that the older generations are more optimistic than those coming up to take their place.
It makes sense. Millennials who came of age during a disillusioning recession are retaining a healthy skepticism as adults. And the recent government shutdown was one of several tutorials in how quickly a family might go from middle-class comfort to poverty’s edge, and how out of touch many of the truly wealthy are to their plight (how do grocery stores work, again?).
Despite these facts, the past decade’s political conversation has been a rehashing of old tropes: cutting even more taxes on the right and protecting existing programs on the left. In contrast, the radical questioning of the privileges of the wealthy crackles with energy. The phrase “every billionaire is a policy failure” has entered common parlance. Warren’s, Sanders’s and Ocasio-Cortez’s proposals all emerged within the past 30 days, and the conversation has already moved from “should we?” to “how?”
It remains to be seen how much further these ideas will go. Proposing a World War II-era wealth tax is one thing, but implementing it — within a markedly different economic and cultural environment — is another.
Even so, the billionaires should watch out: Things are beginning to change.