“The billionaire class no longer sees itself as part of American society,” said Sanders, a Vermont socialist and winner of the 2020 California Democratic presidential primary by 8 percentage points over eventual nominee and president Joe Biden. “They see themselves as something separate and apart, like the oligarchs of the 18th century, the kings and the queens and the czars, they believe they have the divine right to rule and are no longer subject to democratic governance.”
There’s that Sanders oligarchy fixation again. He’s been fighting the plutocrats since the early 1990s.
Credit Sanders for consistency, though. To his thinking, billionaires shouldn’t exist, so maybe his non-violent way to eliminate them, even when he’s shared the stage with one at a debate among Democratic presidential hopefuls, is to eventually tax them until they no longer qualify for the title. Or to bend a Ronald Reagan quip a bit, until they no longer move. That will show the oligarchs who’s boss.
No matter where Sanders is from, no matter how zealous he is about battling the oligarchy, the fact remains that the proposed billionaire tax is not what the state needs. Even Democratic Gov. Gavin Newsom says so.
“There’s impact as it relates to the flow of capital, the impacts on the market, which are not inconsequential,” the governor has said.
Newsom has also acknowledged the tax would be “really damaging to the state.”
“The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long term-commitments, medium-term.”
From a dry analytical standpoint, the tax simply doesn’t add up, due to some “unpleasant arithmetic.”
One problem, says PRI senior fellow Wayne Winegarden, is that because the tax has the potential to chase away California’s 200 or so billionaires, the state could “lose $30 billion in annual personal income tax revenues.” At the same time, the billionaire tax “would also limit the annual expenditures from the one-time wealth tax to $25 billion each fiscal year.”
So, “In other words, the state is risking a recurring $30 billion loss in personal income tax revenue for the hope of getting a $25 billion revenue boost.”
Some have argued that the tax is unconstitutional, but Columbia University legal scholar Philip Hamburger says “the legal arguments against it have remained elusive.” For that reason, he says, it’s “important to recognize that this tax is an uncompensated taking or at least a deprivation of property without due process, contrary to the Fifth and 14th amendments.”
Is it possible that revenue is not the primary goal but punishing the wealthy is? Is the objective to tax entirely out of that income bracket or until they become fed up and leave?
Yes, it is.
One wishes that were not the case, though. Billionaires make an economy hum and California needs them — much more than it needs Bernie Sanders’ input.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
