My mind was all over the place today, and I know with the next president there is no way on God’s blue earth we’ll see a wealth tax in this country, but I wanted to get to grips with it and understand it. The detractors (i.e. billionaires) who argued against it claim it would bankrupt everyone.
So lets look at this from an every-day schlub point of view.
Let’s say my family brings home $150,000 a year, and we’re pretty comfortable. We have debt, sure, but it’s not unmanageable. We’ve paid off the car and feel like we could replace my 15-year old car with a new one and not feel any pressure. We’re very lucky.
Now double our income: $300,000 a year and with no corresponding increase in our expenses we are beyond comfortable. The new car could probably be paid off in cash or with a very small loan, the school loans are dwindling, the we’re getting aggressive on the mortgage and being very generous to charities.
Now double our income: $600,000 a year. We’re now pretty much eating out all the time to spur the economy along and have no debt. We could probably think about moving to a bigger house or buying a second one to spend the summer months. We wouldn’t be doing any housework because we’d hire housekeepers.
Double our income again: $1,200,000 a year. I have no idea what to do with that much money. My friends could be living rent-free in houses or apartments I have purchased.
Double our income again: $2.4M a year and I probably own a few small businesses at this point, including a couple of bookstores just to hold my library. My local schools would be able to hire more teachers and reduce class sizes, which is the one thing we know works in education.
Double it again: $4.8M. I feel like I would have more purchasing power than several small towns in the USA.
Double it again: $9.6M. This is the sixth round of doubling and I can’t even imagine what I could do with this level of income. I would have a personal staff, so would my wife, and our housekeepers would probably get PAs. For reference, this is almost the amount of money Scalzi signed in a contract over 15 years or so, but I’m talking about having this every year, not parsed out over a decade.
Double it again: $19.2M. Honestly, I feel like I’m more powerful economically than Wyoming. I’m not, but boy does it feel like it.
Double it one more time: $38.4M. I probably own small towns at this point.
Double it again: $76.8M. We’re opening our own university! High quality reality based education for low cost, no school loans required.
And there we have to stop the thought experiment. Why? Because if we double it one more time we will finally have to pay the wealth tax Biden proposed.
So if someone tells you the wealth tax will bankrupt you, personally, tell them to stuff a $100-bill up their bum and burn it.