October 29, 2021 - 11:49am

In America, millionaires and billionaires aren’t just tolerated, they’re celebrated. But that could be changing.

Thanks to surging stock values and other factors, the rich are now getting richer at truly jaw dropping rate. Earlier this week it was reported that Elon Musk made $36 billion in a single day. 

Based on figures from Americans for Tax Fairness, charts like this one are being widely shared on social media: 

Credit: Americans for Tax Fairness

Of course, these are estimates and they can be disputed. The finances of the ultra-wealthy are typically complex — making it very hard for outsiders to arrive at a definitive figure. But with stock market and other asset values rising, any well-advised billionaire will be getting massively wealthier — and doing so in the midst of a devastating pandemic. Americans for Tax Justice calculate that America’s billionaires have grown $2.1 trillion richer since the March 2020. 

The political backlash is now underway. On Wednesday, the Chair of the Senate Finance Committee, Ron Wyden, unveiled his Billionaires Income Tax, that would target billionaire holding of traceable assets like shares. Under the proposals, the tax would be payable immediately instead of being delayed until the assets are cashed-in. 

In theory, this could raise hundreds of billions of additional revenue for government. However, it’s not exactly a programme of total expropriation. According to the economist Gabriel Zucman, this is the impact it would have on the wealth of the 400 richest Americans as a percentage of national GDP: 

Credit: Gabriel Zucman

It wouldn’t even fully reverse the gains made since the start of the Covid crisis. 

Politically astute billionaires may judge that this is a pretty good deal for them. But even if Senator Wyden’s proposal becomes law, the US government should be careful before counting on all that potential revenue. 

American ultra-wealth isn’t just generated in America. For instance, US tech billionaires benefit from the tax regimes that allow their companies to make such massive profits in Europe and elsewhere. Governments in these countries are already moving to close loopholes. The sight of the US government squeezing the tech lords will only encourage their own efforts. 

Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.