June 15, 2021
Last week, the nonprofit, public-interest journalism site ProPublica published a bombshell report on the financial lives of some of our wealthiest citizens.
The “Secret IRS files” leaked story aimed to raise questions on the fairness of the U.S. tax system, insinuating that there is one tax system for the rich and another for everyone else.
But acclaimed author and RealClearMarkets editor John Tamny proposes a different take on the issue…
A Tax on Jeff Bezos Is a Cruel Tax on All of Us
“It turns out many of the very richest Americans pay almost nothing in taxes.” Those are the words of Ryan Cooper, a journalist for The Week. As readers can doubtless imagine, Cooper’s assertion came after private tax records were illegally leaked from the IRS to the Lefty media nonprofit, ProPublica.
Cooper’s analysis missed in a variety of ways… Indeed, it’s useful to point out that as opposed to “almost nothing,” Jeff Bezos paid more than $4 billion in taxes in the years Cooper contends he largely avoided them.
Which is the point… Bezos is way overtaxed. Really, what about 4 billion is “almost nothing”?
Regarding what you’re about to read, there’s already voluminous commentary along with correctives about how most of the mega-billionaires in our midst don’t take in a lot of income… that their wealth is largely equity-based, that they can’t be taxed unless a capital gain is realized, that they paid the taxes that the law requires them to pay. It all sounds very defensive. It implies that the rich, just because they’re rich, would and should pay more in taxes but for a tax code that favors them, and that creates ways for them to avoid paying their “fair share.”
But such a view is offensive. The Right must stop hiding behind a tax code as the legal “reason” why the rich don’t pay more. They should also cease “modeling” ways for the Treasury to take in more tax dollars by virtue of lowering the rate of taxation. If they’re for limited government, they should live up to their rhetoric by fighting endlessly for lower federal tax collections. Period.
As for members of the Left, their belief that the rich don’t pay enough in taxes is rather contradictory. Lest we forget, this is a Left-wing that spends its days and nights seeking to end discrimination of all kinds. It seems the ideology’s virtuousness only extends so far. If you have the temerity to be rich, the expectation is that you should be treated very differently by elected officials… Some would call that discrimination.
The only proper indictment of the U.S. tax code is that Bezos has billions legally taxed away from him.
The wealth gap in America has never been wider — we’ve still never fully recovered from the Great Recession of 2008, and it’s only going to get worse from here. But the effects of the Big Con are going to devastate those who don’t take action. So do something now while you still can.
A Taxing Con
Really, why should Bezos be forced to cough up so much in taxes relative to, for instance, journalist Ryan Cooper? But wait, you say, there aren’t enough zeros to calculate the wealth gap between Bezos and Cooper… And that’s true enough. And why is that? Might the wealth disparity between the two have something to do with how frustrating life would be if Bezos were to suddenly shut down the source of his world-leading net worth? Conversely, would anyone notice if Cooper stops writing (short of his parents, perhaps a spouse)? But that misses the point…
The point is, a tax code that penalizes some people to the tune of billions plainly violates the very American belief in equal protection before the law. In this case, some are plucked lightly or not at all, while the productive have to hand over wealth in the ten figures.
To which some will screech, “They earned more, so they should pay more. It’s only fair!” Except that such a response vandalizes reason… and not just because there’s nothing fair about a tax code that takes specific aim at achievement.
What’s most unfair about people like Bezos paying more taxes is that we all suffer the more that Bezos pays. There’s no escaping the burden of excessive taxes foisted on the Seattle centi-billionaire. Think about it…
Every dollar that Bezos sends to the U.S. Treasury is an extra dollar of control that Nancy Pelosi, Kevin McCarthy, Chuck Schumer, Mitch McConnell, and Joe Biden have over the U.S. economy. We know from the 20th century that political control of economic resources fails in an impoverishing, brutal fashion. What fails in total also fails in limited fashion. Politicians quite simply can’t allocate precious resources.
It’s not a Democrat or Republican thing, and it’s really not even a story of politicians lacking the skills to invest… More realistically, even Warren Buffett would be a tragically bad investor if he were Senator Buffett and charged with doling out trillions every year. Politicians can’t invest effectively simply because every dollar spent by politicians attracts a constituency reliant on the monies spent, at which point, it’s exceedingly difficult to mothball that which stops making sense.
While in the private sector our investment darlings that fail are routinely killed off (Silicon Valley startups die to the tune of 90%-plus), in the public sector bad ideas generally live forever… forever consuming precious resources. The more that Bezos hands over to the Treasury, the more bad investments and programs will be given life, seemingly in perpetuity. What lives in perpetuity on our dime ensures less in the way of intrepid, market-informed investment in the real economy. The private economy has in recent decades produced Amazon, Google, and a revived Apple… while Congress has thrown billions more at what personifies irritation like Amtrak, the Passport Office, and the U.S. Postal Service. Get it? And the burden of government doesn’t stop with taxes paid now.
I’m not sure if you remember books, America, but it’s what people used to sink their faces into to avoid dealing with family and strangers. Our editor-in-chief, P.J. O’Rourke, has written a few in his time, and he’s re-releasing his bestselling Eat the Rich, complete with a new chapter to take on the absurdity of 2021 economics. And as an American Consequences subscriber, you can have access to the newly released edition for free. Claim Your Copy!
Any entity known to have substantial legal access to the wealth created by others soon enough has substantial borrowing power. Translated for those who need it – the billions Bezos sends to Washington empowers the U.S. Treasury to borrow in copious amounts against future billions that Bezos will inevitably pay in taxes. Real-time tax collection enables the cruel tax that is government spending, and it also enables a multiple of the spending tax as investors price in future taxes to be paid by the rich.
Members of the Left should put away their pitchforks, while folks on the Right should mothball their revenue models. As evidenced by the economy-sapping size of the federal government in the here and now, a tax on Jeff Bezos is a tax on us all.
John Tamny is vice president at FreedomWorks, editor of RealClearMarkets, and author of When Politicians Panicked: The New Coronavirus, Expert Opinion, and a Tragic Lapse of Reason.
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Managing Editor, American Consequences
With Editorial Staff
June 15, 2021