California needs an extreme wealth tax, says multi-millionaire

In their 1983 classic “King of Pain,” The Police sing: “There’s a rich man sleeping on a golden bed. There’s a skeleton choking on a crust of bread.” The song is almost 40 years old and rings as true now as it did when Ronald Reagan was in the White House.

Today, in the richest country in the history of the world, 59 billionaires — almost exclusively men— own more wealth than half the nation, while 18 million children go hungry.

While millions of Californians are working two or three jobs to feed their families, the collective wealth of California’s billionaires has surged to $960 billion as of January.

Almost four decades after The Police put the crisis of economic inequality to music and a president promised that trickle-down economics would eliminate poverty, the problem has gotten even worse.

Our basic social contract is broken. Free market capitalism and laissez-faire government have failed us. If they were working, Americans would not be begging for food in our streets while the ultra-rich keep multiplying wealth they’ll never need. But there is a solution.

If we tax the very richest in society through an extreme wealth tax, we can afford smart programs to rebuild the middle class, while improving tax justice and reducing wealth concentration.

Yes, it will require sacrifice from a small portion of very fortunate people. But believe me, they can handle it.

How do I know? I’m one of them.

As someone who’s been blessed to make a very good living as the co-founder of a successful business, I don’t want to add to my personal net worth at the expense of my fellow Californians.

I can pay more, I should pay more, and I reject the false concept that wealthy Californians are the job creators who will leave the country with our money if we’re asked to pay what we owe.

That’s why I’m supporting The California Tax on Extreme Wealth, which would impose an annual excise tax of 1% on “extreme wealth,” defined as over $50 million per taxpayer. The measure also adds an extra .5% tax rate on wealth above $1 billion. In California, that means an estimated 15,000 families — or the top .07% of our population — would be affected. The tax would raise about $22.3 billion per year.

Think of what we can fund with that: better public schools, more affordable health care and dramatically increased services for homeless Californians, to name a few examples.

Some in my tax bracket may argue that there already is an extreme wealth tax in the form of the income tax. The truth is, rich people are really good at avoiding the income tax. As long as successful executives don’t sell any of their billions of dollars of stock they don’t have to pay a dime in taxes on that wealth.

The wealth tax remedies this injustice by taxing all wealth, whether it’s been realized as income or not. With the wealth tax, billionaires would be taxed whether or not they sell assets — just like your average homeowner who pays annual property taxes based on the value of their home.

And during a time in which we could all use a little unity, it doesn’t hurt that the wealth tax is incredibly popular among voters of both parties — nearly 70% of voters support a wealth tax on Californians worth $100 million or more, meaning they pay two cents on every dollar in their wealth portfolio.

Surprised by that majority? You shouldn’t be. Californians understand that the system is designed to benefit the wealthy and large corporations. They understand the ultra-rich and powerful have rigged the rules in their favor so much that the top 0.1% pay a lower effective tax rate than the bottom 99%, and billionaire wealth is 40% higher than before the COVID crisis began.

Ultimately, this is the very least the ultra-fortunate among us can do to repair a broken economic system. While the wealth tax would help reduce wealth concentration — which is a good thing — this is far from some radical redistribution. Mega-millionaires and billionaires typically earn returns on their asset values many times larger than the wealth tax rates. But it’s a start.

I pledge to do my part, and encourage all those in similar circumstances to stand up for our country. It’s a matter of human decency.

If you’ve got $50 million, I assure you that your family will be taken care of for the rest of their lives, whether or not they’re paying a little more in taxes.