Should billionaires exist?
- ‘Billionaire’ is defined as 'one whose wealth is estimated at a billion or more dollars, pounds, or other monetary units.'
- Investopedia shares that 'John D. Rockefeller is held to be the world's first official billionaire, achieving that status in 1916 largely through his ownership of Standard Oil.'
- Oprah Winfrey became the world’s first female Black billionaire in 2000. Her annual salary is $300 million, and her current net worth is $3.5 billion.
- The World Inequality Report for 2022 found that “since 1995, the share of global wealth possessed by billionaires has risen from 1% to over 3%.”
- A 2021 Pew Research Center study reveals that 'Roughly three-in-ten Americans (29%) now say the fact that there are some people who have personal fortunes of a billion dollars or more is a bad thing for the country, up from about a quarter (23%) in January 2020.'
- As of January 2022, Forbes’ The Real-Time Billionaires List ranks Tesla founder Elon Musk as the wealthiest person in the world with a net worth of $222.2 Billion.
While it's true rich people contribute to job creation and growth, there comes a time when their wealth becomes a hindrance to economic growth and equality for everyone. Too much wealth concentrated in the upper class contributes to societal and economic decline. Education becomes expensive, loans come with difficult conditions, inflation becomes the norm, and so on.
Most billionaires only spend a tiny percentage of their wealth, even the amounts they give as charity. And in recent years, the top 1% has grabbed 38% of all additional wealth generated since the mid-90s. The bottom 50% has only received a meager 2% of it. Imagine how better off and happy humanity would be today if billionaires distributed their wealth among more people.
Billionaires take advantage of every tax loophole they can find, be it funneling money into offshore accounts, lobbying lawmakers, and using unfair yet legal accounting tricks. About $731 billion in wealth was accumulated by 467 billionaires from March 18, 2020 to August 5, 2021. Political influence buys undue advantage over the competition.
Characters like Martin Shkreli illustrate how a cheap life-saving pill of $13.50 can become prohibitively expensive ($300) because the rich can game the system to their advantage. For example, insulin prices in the US are another indicator of the scarring influence of Big Pharma, often headed by billionaire CEOs with huge lobbies connected to the higher echelons of the government.
Tech billionaires like Tim Cook, Elon Musk, Mark Zuckerberg, and Jeff Bezos have long been accused of not caring about their workers. Their soaring wealth is sharply at odds with reports of wrongdoing at their companies. Billionaires' obscene amounts of money should be put to better use besides further lining their pockets.
Limiting wealth is fundamentally against the concepts of capitalism, as the wealth of the few benefits the rest of society. While enormous taxes on billionaires might be successful in redistributing their wealth, it would ultimately harm the rest of us worse than the ultra-wealthy. This is due to restricting the wealth of the entrepreneurs who meet the wants and needs of consumers, stifling the producer/consumer market system altogether.
Billionaires only become wealthy by creating value for consumers. Therefore, penalties for earned wealth disincentivize those who wish to provide better goods and services to the rest of us. If the ultra-wealthy cannot accumulate more wealth, they will not compete in the market system, and the general population will be worse for their absence.
Billionaire's charitable donations have done a lot for society. Warren Buffett's net-worth is $111 billion, but he has given away over $42 billion throughout the years. Bill and Melinda Gates have a combined net worth of $208 billion but have given away $50 billion. Chuck Feeney set out to die broke, giving away the last of his $8 billion in assets in September of 2020, having closed his foundation. These billionaires are using large amounts of their assets for supporting human rights, health, and poverty alleviation. If we taxed the ultra-wealthy more, they would have less to give away.
Finally, to rid the US of billionaires would require a wealth tax, which is unconstitutional under Article 1, Section 9, clause 4. Because a wealth tax is unconstitutional, Congress could not levy one without appealing to the Supreme Court or passing a constitutional amendment. Even though some see the top 1% as unfairly taxed, the ultra-wealthy add plenty of economic value in goods, services, and philanthropy.