Let’s Steal My Neighbor’s Yacht
I still remember the day my college girlfriend told me her dad’s stock portfolio was worth $110,000.
I was floored. Between that, a good job, and a nice house on Long Island— the guy was rich!
Twenty years later, it would take a little bit more to get my attention.
I tell you, as modestly as possible, that my current home is worth eleven times as much as that $110,000 stock portfolio. My investments, cash accounts, and other assets are worth many times that amount as well.
So yeah, life has been pretty good to this kid who grew up in a Pennsylvania coal mining town.
Yet I’m also aware that even my current wealth is merely a drop in the bucket to loads of other people.
Heck, I’ve hung out with men and women worth tens of millions … some worth hundreds of millions … maybe even a billionaire or two. Everyone from third-generation trust funders to self-made Internet entrepreneurs.
I’m relaying all this to explain why I’m troubled by Bernie Sanders’ recent proposal to tax billionaires, a group of people he says “shouldn’t exist.”
Bye Bye Billionaires
In a nutshell, Sanders says we should implement a “wealth tax” – as high as 8% — on the richest people in America.
About 180,000 households would pay some form of the tax.
It would start applying to individuals with a net worth of $16 million or married couples with $32 million. They’d pay 1% a year.
The top group – married couples worth at least $10 billion – would pay 8% a year.
Now, I’ll admit. There’s a small part of me that wants to agree with this idea of taking a couple percent from our country’s billionaires.
Do they seriously need that extra several million?
Of course not.
Would it be awesome to just take some of that money and create a universal income plan … raise Social Security benefits for millions of Baby Boomers … or give everyone free healthcare?
There’s just one problem …
It would also be theft.
Consider the following.
Here I am in my million-dollar shack – and it really is just a simple home – albeit with a great view, staring out at the Pacific.
Meanwhile, right on the bluff above the ocean, are a row of houses worth many times as much as mine.
I know a few of the people who live in those houses, including a guy who has a lobster yacht docked down at the marina. His boat is also worth more than my house.
He doesn’t really need that boat. I’m pretty sure he could just go out and buy another one if it disappeared. Heck, he might not even miss it all that much on a day-to-day basis!
Does that mean I can go down there and take it out to the Channel Islands whenever I feel like it?
Or that someone getting evicted from their apartment can go down and live on it for a while?
Or that he should be forced to sell it and donate the money to charity?
Well, Bernie’s plan is basically this very thing writ large.
It’s an asset seizure based on people’s relative wealth … just like me going down to the harbor and taking my friend’s lobster yacht simply because he has a lot more money.
Moreover, Bernie’s plan uses definitions of “too much wealth” that are arbitrary – and subject to change – just as my own have been over time.
And it feeds upon our own greed, self-righteousness, and jealousy to justify taking someone else’s stuff.
It isn’t taking some of what they’re earning, like our current income tax.
Nor is it taking some of their stuff once they die, like our current estate tax.
It’s a third layer of taxation that takes existing stuff from people every living year as long as they continue to have “too much wealth.”
Again, it’s easy to look the other way and dismiss the actual proposal because it only applies to the Zuckerbergs of the world.
Indeed, you’ll hear a lot of people say they don’t understand why more low-income Americans – particularly poor, rural Republican voters – can’t support this kind of policy.
Well, it isn’t because they’re all stupid.
Nor is just because they’re aspirational.
It’s because they know that no matter how much anyone else has, it’s simply wrong to steal from them.
And just so you don’t think I’m only picking on Bernie, other presidential candidates have proposed similar plans that are just as morally flawed.
So as appealing as it may seem to drain a little bit of wealth from the people who “won’t notice it” at the top of the ladder, at the end of the day, you have to face the facts. No matter what you want to call it, it’s theft, and stealing from people is not a great way of writing government policy, no matter who you are.
To a richer life,