By Adam Malev
In the past month, there has been a lot of talk about “abolishing billionaires.” Representative Alexandria Ocasio-Cortez made headlines by proposing a 70% tax on income over $10 million and by saying that a society with billionaires is not moral.
The Huffington Post and the New York Times each published articles defending Ocasio-Cortez’s stance and advocating higher marginal tax rates, luxury taxes, and maintaining that a society with billionaires is immoral. While their arguments appeal to many, they fail to highlight the advantages of a society with billionaires.
First, I want to say that a society with billionaires is anything but immoral. In fact, a society where a person can go from rags to riches, from working class to top .1%, from broke to billionaire is a society we all should want to live in. This is a society that allows anyone with great ideas and a great work ethic to grow and thrive. Billionaires like Oprah, Howard Schultz, or Do Wan Chang all started out at the bottom. Oprah worked her way to the top of the entertainment business, Howard Schultz grew up in affordable housing and started Starbucks, and Do Wan Chang came to the United States from China early in his life and went on to start Forever 21. The possibility of becoming a billionaire inspires average Americans to work hard and pursue their passions and ideas.
Next I want to establish that billionaires are accountable to the public and the government and because of these checks on their wealth, their fortunes are only temporary. Higher taxes, revolutions, and poor decision making can drain the fortunes of even the richest Americans. If the general public become angry enough with the inequality between them and these billionaires, they will have a revolt, as evident in France in the late 18th century and in various other countries with poor standards of living for the working class citizens. As long as the people
are content with their lives and feel they and their children have equal opportunities to succeed and achieve happiness, the rich have nothing to worry about. But if the poor can’t even afford basic necessities like food or shelter, the rich will not keep their
riches very long.
In most countries with billionaires, especially those with the most billionaires, including the United States and China, the standards of living for the poorest citizens increase, as more and more billionaires come about. There is a strong correlation between countries with more billionaires and higher standards of living. This is no coincidence. The same countries who are so immoral in allowing billionaires to thrive, have higher standards of living for their poorest citizens.
The freedom to accumulate huge amounts of wealth is not as immoral as many Democratic-Socialists will have you believe. When private individuals can accumulate billions of dollars themselves, they can use this money for the public good. Billionaires can donate massive amounts of money to organizations
they are passionate about that may not receive such large donations otherwise. A billionaire who is particularly passionate about an organization will be able to donate much more money to that organization than an average donor and benefit specific small charities whether they are medical research organizations, public safety groups, or colleges. This is why Bloomberg’s alma mater, Johns Hopkins University, will be able to provide financial aid and research funding for decades, as the former NYC mayor donated over $2 billion to the school.
Hundreds of billionaires and top .1% individuals have signed the Giving Pledge to give away half their wealth to charity. Many of these billionaires have promised to give away even more than this with Bill Gates and Mark Zuckerberg promising to give away 99% of their wealth by the time they die. This ensures that charities will not have to entirely rely on many small donors or federal grants. Private donations allow these billionaires to give away their money to the organizations they choose.
Additionally, the over 500 billionaires in the U.S. provide an additional source of tax dollars in case the government needs to increase revenue during a recession, war, or larger budget. But we should not raise taxes on the richest Americans unnecessarily or their wealth will not be used for what is most important. If we do increase taxes on the rich to 70% marginal rates for the $10 millionth dollar, or we impose a 2% luxury or estate or whatever euphemism you want to give for a “SuperRichCitizenExtraTax," we should only impose new taxes if absolutely necessary. Instead of raising taxes so quickly, our elected officials should work to cut government spending on unnecessary programs and change around impractical existing ones. Some ideas include raising the retirement and social security age to 75, cutting military spending in half, and cutting the bureaucracy by not hiring new people to replace the jobs of retiring bureaucrats for several years.
We should realize that a society with billions is not immoral, as it shows that a country has good economic conditions that allow for billionaires to emerge, correlates with a higher standard of living, inspires hard working citizens to pursue their ideas to succeed, and allows private citizens to accumulate huge sums of wealth which they can use to donate to charities that would not otherwise receive the donations they do from wealthy passionate donors.