At this moment, some of world’s wealthiest people are gathering at a resort in Davos, Switzerland where they decide how best to rule the world because it is an established fact that having a lot of money makes you incredibly smart about pretty much everything. I am a bit surprised why they do not also solve the problems of dark matter, the origins of life, and human consciousness while they are at it. A few panel discussions among corporate CEOs should be sufficient. Many political leaders from around the world also attend this obscene spectacle because they like to pretend that they have some role in running the world and are not just puppets of the oligarchy.
It is a measure of how much these people fear a genuine populist revolt (not the reactionary populism of Trump in the US or Bolsonaro in Brazil or Duterte in the Philippines) that Alexandria Ocasio-Cortez’s proposal for making the marginal tax rate 70% for incomes over $10 million was a major topic of discussion.
When billionaire chief executive Michael Dell was asked on Wednesday whether he would support a proposal put forth by Rep. Alexandria Ocasio-Cortez (D-N.Y.) to tax millionaires at a 70 percent tax rate on income exceeding $10 million, the audience for a Davos panel about tech and global inequality burst into laughter before he could answer.
Dell, founder and head of Dell Technologies, first responded by saying he’s more comfortable allocating significant resources through his private foundation than handing over that money to the government. But then he answered more directly.
“No, I am not supportive of that, and I don’t think it would help the growth of the U.S. economy,” he said in response to questions from The Washington Post.
When Dell was asked to explain why he thinks that, he said, “Name a country where that’s worked — ever.”
Co-panelist and MIT professor Erik Brynjolfsson jumped in to offer an answer: “the United States.”
“I don’t have a strong opinion on that proposal. The devil is in the details,” Brynjolfsson, the director of the Massachusetts Institute of Technology’s Initiative on the Digital Economy, said. “But there is actually a lot of economics that suggests that it’s not necessarily going to hurt growth, and I think we have to examine it more closely.”
Among several business leaders at the World Economic Forum, the debate about higher taxes for the super-rich seems already closed.
Ocasio-Cortez has said that America’s highest earners need to pay their fair share, but members of the elite group in Davos expressed alarm over her proposal, arguing that her plan is misguided and would harm investment and innovation.
“Seventy percent taxes definitely bothers me,” said Scott Minerd, chief investment officer of Guggenheim Partners. “It affects the people that have the most money, and they will start allocating capital in a way that is less efficient and will bring down productivity.”
Ah yes, making the wealthy pay higher taxes will “bring down productivity” and would “harm investment and innovation”. How exactly will that happen? That is never spelled out. What lower taxes have larger resulted in is not increased investment in companies but in corporate stock buybacks that have increased the wealth of stockholders who have then salted it away in tax havens or spent it on ostentation. Is that supposed to be productive?
But I am encouraged that the ideas of a 29-year old congresswoman are making the oligarchy nervous. My only quibble with her proposal is that the income level at which the 70% kicks in is too high. She should lower it from $10 million to (say) $1 million or less.