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THOMPSON: Time for the wealthy to pay their fair share of taxes

May 17, 2021 - 12:00 PM

 


OPINION


Billionaire. It’s hard to get your head around what it means to be a billionaire, at least it is for me. There are 2,755 billionaires around the world, according to the recent Forbes’ 35th Annual Billionaires List. All together they have a net worth of $13.2 trillion. But let’s deal with billions before considering trillions. Canada is home to 47 of those billionaires, together worth about $270 billion.

Americans certainly - and perhaps Canadians - have long admired if not loved billionaires. In the U.S., we have made them celebrities — weaving them inextricably into the fabric of American capitalism, culture — and often wrapping them in the flag patriotically.

We not only accept the opinions of billionaires on virtually every matter...we extend to them a sense of infallibility that no other mortals possess. Even though they are mere humans who acquire and accumulate money...sometimes through ingenuity, hard word and luck...and sometimes simply by birth...we anoint this noble class with super powers.

Perhaps because most of us are diligent and work long and hard...we tend to project that work ethic on the wealthy. After all, if we work 50, 60, even 70-hour weeks to earn a good living...how divinely gifted are these folks that they earn hundreds of millions...even billions in a single year?

The truth is...billionaires often don’t work harder...or even smarter than many of us. The further truth is there’s often a lot of luck involved...and a lot of other talented people...some of whom get wealthy...but with a lower case w. About 28 percent of the world’s billionaires inherited their wealth...benefiting from the riches of others by simply having the right name.

Kevin David Lehmann, whose father Guenther Lehmann gave his stake in the German drugstore chain Dm-drogerie markt with the stroke of a pen...well, probably a few strokes...at 18 years old is the 925th richest person in the world...with a net worth of $3.2 billion.

Not all of the 493 freshly minted billionaires ascended to these rarefied financial heights simply by having the right name. Some invented cryptocurrencies or leveraged good ideas into wealth through the speculation of others in traditional IPOs - initial public offerings - or newer special purpose acquisition companies...SPACs.

In case you haven’t done the math, last year the world gave birth to a new billionaire every 17 hours...more than ever before. Greed certainly is a recurring driver in how many went from middle-class to billionaire-class seemingly overnight. This...during the worst pandemic in 100 years...when half of the population was worried about having enough money to feed their families and avoid eviction.

I’ve known a few billionaires...generally folks with pretty strong egos...though often pretty affable. Not surprising, I guess...even though money doesn’t buy happiness, it tamps down a lot of misery...so the few I know definitely aren’t, well, miserable.

We need to get past the notion that billionaires are imbued with extraordinary powers. These 2,755 billionaires - mostly men - are not the world’s smartest people...not even close.
Neither are they necessarily the most honest, most industrious, most deserving nor even most philanthropic. They are risk takers.

Certainly, some are putting a great portion of their wealth toward solving worldwide problems and making the planet a better place to live. Nearly 11 years ago, “The Giving Pledge” was heralded a worthy goal of the wealthy...giving up at least 50 percent of their net worth during their lives or in their wills. Berkshire Hathaway CEO Warren Buffett and Microsoft co-founder Bill Gates and his wife Melinda Gates came up with the plan and sought pledges from billionaires...and garnered 62 commitments in the U.S.

But the truth of the matter is...51 of the 62 billionaires are unable to give their money away fast enough to satisfy their pledges...they are amassing that much wealth that quickly.

The vast majority of billionaires are using their wealth to build greater wealth...mostly for themselves...and their heirs. By the way, only 210 billionaires in 23 countries have pledged to one day give up half their fortunes.

Like corporations, most of the ultra-rich pay little income taxes...because the laws in most countries are written to protect this powerful class. As Mel Brooks said 40 years ago in the movie, “History of the World”...“It’s good to be king!”

But as I wrote earlier...it’s difficult to imagine billionaire wealth...and even giving up half of it leaves you better off financially than 99.98 percent of the people walking the planet.

The world would be a better place for all if billionaires paid their fair share of income taxes...say one percent on everything above $100 million. Such a “wealth tax” in the U.S. would yield about $4 trillion over the next decade.

Perspective: $4 trillion is more than the U.S. federal government will spend over the next decade on foster care, school lunch, school breakfast, the Children’s Health Insurance Program, food stamps, unemployment compensation, supplemental security income for the elderly, blind people and those with disabilities, and all the tax credits for working families...combined.

A one percent tax on wealth over $20 million in Canada would generate about $10 billion in revenue in its first year. With a $10 billion boost annually to public revenues, Canada could lift hundreds of thousands of people out of poverty, implement long-term increases to funding for important social programs like child care, health care and seniors care, and help pay for more ambitious climate action.

Having billionaires pay their fair share is gaining credence in the U.S. and Canada, largely because it makes sense. Put another way...the nations and the world benefits greatly...and the billionaires? Believe me, you won’t see any fewer yachts the length of a football field...or palatial homes that you could literally get lost in. The ultra-rich have a long history of doing just fine.

To twist F.  Scott Fitzgerald’s words, “Let me tell you about the very rich. They are different from you and me...”

Yes, indeed, they are very rich.

— Don Thompson, an American awaiting Canadian citizenship, lives in Vernon and in Florida. In a career that spans more than 40 years, Don has been a working journalist, a speechwriter and the CEO of an advertising and public relations firm. A passionate and compassionate man, he loves the written word as much as fine dinners with great wines.


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