The concentration of wealth in the hands of a select few has become a global problem that poses a threat to the basic functioning of our societies. According to a landmark new analysis by the Institute for Policy Studies, Oxfam, the Fight Inequality Alliance, and Patriotic Millionaires, “A wealth tax of 2% on the world’s millionaires, 3% on those with wealth above $50 million and 5% on the world’s billionaires would raise $2.52 trillion dollars annually. This would be enough to lift 2.3 billion people out of poverty, make enough vaccines for the whole world, and deliver universal health care and social protection for all the citizens of low and lower middle-income countries (3.6 billion people).”
In this segment of The Marc Steiner Show, Marc discusses the extent of global wealth concentration and the far-reaching implications of instituting a global wealth tax with Chuck Collins, one of the co-authors of the report. Chuck Collins is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits the IPS website Inequality.org. He is also the author of Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good.
Tune in for new episodes of The Marc Steiner Show every Monday and Thursday on TRNN.
Pre-Production/Studio: Dwayne Gladden
Post-Production: Stephen Frank, Dwayne Gladden
Marc Steiner: Welcome to the Marc Steiner Show here on The Real News. I’m Marc Steiner, and it’s great to have you all with us.
Now, during the last decade and more and since the COVID pandemic has gripped this planet in its deadly vice, the wealthy have grown richer and the rest of us have lost or are losing our grip on the limited financial resources that we do have. And it’s glaring. How glaring? And how do we begin to have a conversation on what all this means and how to address and deal with that reality?
Well, we’ve invited Chuck Collins to join us. He’s director of the program on Inequality and the Common Good at The Institute for Policy Studies. He co-edits Inequality.org and wrote the book Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions. And now he is one of the authors of this new study called “Taxing Extreme Wealth: [An annual tax on the world’s multimillionaires and billionaires:] What it would raise and what it could pay for.” It was produced by the Institute for Policy Studies, Oxfam, Patriotic Millionaires, and The Fight Inequality Alliance. Now, “Taxing Extreme Wealth” is really an amazing detailed analysis of those who control the world’s wealth, billionaires and multimillionaires, undertaxed with too much power not paying their fair share. What else is new? But, it looks at how their paying their fair share could change the world. And with a formula to do just that. Now if we only had a global wealth tax. Let’s see what we can do about that. Chuck Collins, welcome. Good to have you back.
Chuck Collins: Thanks Marc for having me.
Marc Steiner: So let’s take a step backwards for just a minute for everybody watching or listening to this podcast and let’s talk about this report. A, how you all got together to do this and B, the overarching findings.
Chuck Collins: Yeah. Well, Institute for Policy Studies in conjunction with the Americans for Tax Fairness, we’ve been looking at billionaire wealth in the United States and what’s happened during the pandemic. And as you said, US billionaires, there are about 750 or so, their wealth has surged by $2 trillion over less than two years.
Marc Steiner: Trillion?
Chuck Collins: Two trillion. So that group, the 750, now have $5 trillion combined. And Oxfam this time of year, often in conjunction with the Davos World Economic Forum, also do kind of a global billionaire analysis. So we got together with a couple other international groups to look at not just what’s happening with billionaires, but what can we learn about the ultra high net worth or the ultra wealthy people with over $5 million, over $50 million? And what could a wealth tax, if it was implemented in nation states around the world, how much money could be raised?
So, that was really the exercise. And one interesting thing I’ll say is there hasn’t been good data. We know because Forbes magazine and Bloomberg kind of do these just-in-time calculators for the world’s super rich billionaires. But when you get below the billionaire level, we don’t know a lot about what’s going on. And so we actually went to a private research company called Wealth-X whose main clients are companies trying to sell private jets and yachts. And they’ve done extensive research on the world’s ultra wealthy. And so we partnered with them to do a deeper analysis on the ultra wealthy in 66 different countries representing about 98% of the world’s GDP. So we basically got data on most of the multimillionaires and billionaires in the world and tried to get a picture –
Marc Steiner: So, I was really shocked when I read that in person in your report because I… Let me just – I’m sorry to interrupt. Just this quick thing here – That they actually cooperate with you given that their clients are the wealthy, that really kind of… I went, what?
Chuck Collins: Well, we paid them, we hired their services and we have been subs –
Marc Steiner: [laughs] Okay, got it.
Chuck Collins: …And we have been subscribers of their database. We’re customers. But they also work with nonprofit groups that are primarily trying to do fundraising. But I think they’re as curious about some of these questions as we are. So, it was a match made in heaven.
Marc Steiner: That’s good. Talk a bit about the two formulas that came out of this before we get into the meat of what it could mean internationally and also nationally here in the States. The formula you came up with in terms of how you would tax and what you would tax and what that could mean?
Chuck Collins: Well, of course we had a pretty rigorous debate about what should a wealth tax look like and what should the goals be. For instance, if your view is there shouldn’t be billionaires, that we shouldn’t have economies where so much wealth funnels up to so few people, then you might want a very steeply progressive wealth tax that begins to chip away at that concentration of wealth. We also looked at the proposal that Senator Elizabeth Warren and Senator Bernie Sanders put forward in the US for a wealth tax starting at 50 million and up. So we thought we’d test out a couple of different rate structures of formulas. And we looked at two. One that I think mirrored the US wealth tax proposal and another that would actually start to chip away at billionaire wealth globally.
Marc Steiner: But can you just talk about the formulas themselves? I just want people to hear the numbers. [crosstalk] these two ways you calculated what to do and what it could mean.
Chuck Collins: So, the first formula basically says wealth between $5 million and $50 million we would tax at 2%, wealth between $50 million and $1 billion we would tax at 3%, and wealth over $1 billion we would tax at a 5% rate. And the second rate structure basically said we’ll tax wealth over $1 billion at 10%. And of course some people said, why don’t we just tax it at 99%? But those were the two formulas that we applied to the world’s wealth as we understood it.
Marc Steiner: So a couple things really struck me about this. And then before I get into more specifics about the report, one is that we’ve heard about this, but this report in many ways gives a lot of credence to the reality that in the last bunch of years, and even during COVID and even with COVID that this [inaudible] planet is that wealth has been surging and poverty’s been surging. There’s a gap that’s growing. And people, I don’t think, are totally aware of how deep that is.
Chuck Collins: Yeah, in some ways we’ve entered a period of hyper inequality. Really it started 40 years ago, even late 1970s, you could start to see wages were stagnant not just in the US but in many capitalist countries. And then the growth in income and wealth going to the top 1% was growing. The last 15 years, a lot of the income and wealth gains have gone not just to the top 1% but the top one tenth of 1%. And when you start to look at the billionaire class you see that that’s where a lot of the societal wealth is pooling. So, that’s the trend. And then of course the pandemic comes along and I would say that these extreme inequalities of income and wealth were like the preexisting condition going into the pandemic. Where the more vulnerable you were, the more economically precarious you were, the more dangerous and deadly the virus is. And at the very top wealth is surging for this billionaire group. So we’re just seeing what I would call kind of accelerating inequality over decades.
Marc Steiner: And again, there’s a couple things that really for me just jumped out. And let me ask you about a couple of these before we wind our way back towards the Western hemisphere here, I was really kind of taken aback. Two things. One was that even in the social democratic countries: Netherlands, Norway, the stuff that you found was that, like in Holland and the Netherlands, that the wealth surge was 47.3% during the pandemic. And that the richest 0.1% made more wealth than the bottom 60% of all of Holland. And in Norway it was really similar. It really shocked me about how it’s affected every society, even the social democratic societies, which in some ways have more equality because of the healthcare system and more housing that they provide. It took place throughout the world.
Chuck Collins: Yeah. And I think that’s a really important point, Marc, that this is a global trend. This is the way in which capital, the rewards going to capital, to investors, to wealth holders, have surged around the world. What we’re looking at here, though, is the pre-tax, pre-social policy picture for a lot of these countries. So while it’s true these inequalities grew in the Nordic countries, they are obviously going to tax that wealth. Some of these countries already have wealth taxes. They’re going to do a better job of slowing and taxing the top and making investments to raise and have a high social floor. And I should say in the report where it’s posted, we’ve done 44 fact sheets on the countries where we had the best data and where there were activist partner groups.
So you can actually go in and look, as you did, at specific countries and what the picture is. But then the exhortation is now what? What is each nation state, what are we going to do as a planet about this? And those countries are already doing a better job of making sure those who don’t become permanent social inequalities.
Marc Steiner: And it even affected countries that people think of as kind of old line socialists, Leninist nations, communist nations, for every word people want to use. In Russia and China, there are those, that also the inequality has grown. One of the things that really popped out was that in China, 47 of the richest billionaires own the same wealth as the bottom 10% of Chinese society. In some ways not quite as glaring as some of the others, but still glaring.
Chuck Collins: Yeah. Not the vision we had. Yeah.
Marc Steiner: Right. Russia as well, the 80 richest billionaires have more than the bottom 80% of the country. Those things… They really say a lot about the power of capital and wealth across the globe that has grown over the last 20 years and more.
Chuck Collins: Yeah, absolutely. And I think that is part of why, in a sense, this is a planetary moment. You and I talked earlier in the fall about the Pandora Papers. This release that revealed this hidden wealth infrastructure. Well, that is part of the story. We’re looking at the amount of wealth that we think we can measure, but there’s probably even vaster treasure that isn’t on this ledger because it’s sequestered, hidden, stashed away. And so the concentration of wealth is kind of moving into a new zone at the global level. And in a sense it’s a moment when we as a planet, and that’s why we brought this up in relation to the Davos discussion. Which is, we’re going to have to look at what do we do about this? And wealth taxation is clearly one of the important remedies.
Marc Steiner: So I want to talk about the remedies that you all posited in this report and what you think the reality of that would be given that I think, pardon me if I sound a little jaundiced just for a moment, but the idea of creating a global tax authority, I think, is not going to happen tomorrow morning or even in my lifetime. And I can just see the US Senate or the British parliament or any other body in the world going, no, you can’t do that. But talking about that in terms of those countries, I think it’s 130, 136 countries that got together to pass a treaty about the global corporate minimum income tax, that did happen. We’ll see what effect it really has. But talk about what you’re proposing and what does that mean for building momentum for this kind of political discussion?
Chuck Collins: I think part of what we wanted to do with this study was just to show how much wealth is out there and what revenue could be raised if nation states applied wealth taxes. So if we applied that first formula, that would raise almost two and a half trillion dollars a year that could be applied toward vaccinating the world, reducing extreme poverty, expanding health systems. You’re absolutely right. The United Nations is not going to be a tax authority. There’s not going to be a global institution, as much as the right wing fears that there’s going to be some global institution that has tax authority over nation states. What’s more likely is what you just described, that for over the last couple decades, multinational corporations have been pitting countries against each other in this race to the bottom, to who will charge the least corporate income tax.
And so, as you said, 136 countries came together, they formed a treaty. They established a floor, a 15% minimum income tax. Some nation states will have higher corporate taxes, but they are basically saying, this is a global problem, a global tax problem, and we’re going to create a standard. And I could imagine a very similar parallel process around wealth taxation where countries say, look, these extreme concentrations of wealth are bad for our individual countries and bad for the world as a whole. This is where vast amounts of the world’s treasure is residing. Let’s form a uniform minimum wealth tax policy and get as many countries to step up and agree to that global floor. That’s in your, in my lifetime and beyond probably the best scenario or the most likely scenario, but not completely out of reach. As we just saw with a global corporate minimum tax, people probably thought that would never have been possible but we’re on the path toward that.
Marc Steiner: So let’s bring it home to the States where we’re broadcasting from for a moment. And as an example of what could happen around the world, because this is a really detailed report. And I think that people always know that the wealthy in the United States and across the globe own a huge amount of wealth compared to the rest of the population. One of the things that really hit me, I think people [inaudible] to hear this, is that one of the things in the report was that the richest billionaire in the United States – And we can talk about him in a moment – Owns more wealth than the bottom 40% of the entire American society. That’s huge, when people realize that. And if you take those examples… Let’s go back to your formula and what an annual wealth tax in the United States would mean. And how you would get to those two numbers that you come to if you really put this tax in place.
It would be almost $930 billion on the one hand and on the other, if I remember correctly, it’s like $1.3 trillion or more. That we could use in this country to build to end poverty, take care of people’s health care, deal with COVID, and really kind of put things in a different way. That would take everything that Biden, some of those other folks who are trying to fight for in Congress, and make it a reality. So let’s deal with what happens here and how this is also an example in many ways for the rest of the world.
Chuck Collins: Yeah, I think that $1 trillion, almost $1 trillion dollars of revenue from the ultra wealthy, from people who already have substantial wealth, just shows the revenue potential of a wealth tax. And, Marc, your point about the richest billionaire and the bottom 40%. Part of what we’re underscoring here is the bottom 20% have zero or negative wealth. There’s no savings cushion there for one out of five households. And the next 20% of households have almost nothing to fall back on. So it is possible for one person to have more wealth than the bottom 40% when the bottom 40% has so little. And that is part of what you can do, what you can imagine with taxing the top is investing in things that would raise the floor, that would create opportunity and alleviate poverty at the floor.
And we have this Build Back Better legislation that has been stalled out and effectively blocked, it seems, in the US Senate, but there were a number of things in there. Like expanding the child tax credit, which was almost like a guaranteed income for low and middle income households with children. It was a little bit of a monthly income infusion that was paid for by a progressive tax. Would’ve been paid for by taxing the wealthy. So those are the kind of things we could tax the wealthy and invest in things. Eliminate student debt. Create permanently affordable housing that doesn’t cost more than 25% of people’s incomes on a monthly basis. Things like that that would reduce this glaring gap. So it really is one of the ways we could pay for things that really make a difference. But I should say it’s not just about the revenue, it’s also about power. And that part of why we should be thinking about taxing wealth is to slice these oligarchic fortunes down to democratic size, as my coworker Sam Pizzigati always says.
Marc Steiner: I like it, say that again. I like that. It’s a good line. Say that one more time.
Chuck Collins: Slice these oligarchic concentrations of wealth down to democratic size. Meaning, how could it be that some people have so much wealth and power, power to own the media, power to own vast monopoly enterprises, et cetera.
Marc Steiner: So, I think that in all of this, one of the things that strikes me – And we can talk about this just for a minute before we close – Is that one of the things that’s in this report that’s not emphasized in a large sense but is emphasized in terms of what you’ve written in the proposals you’re making here for this country and the planet, is there is a way to begin to address and ameliorate the issues that face billions of people in the world and millions of people in this country. If we had a more equitable tax structure that actually taxed wealth. When you look at this, if you tax wealth the way you’re describing, maybe describe it one last time, through taxed wealth, the way you’re describing, it wouldn’t make these wealthy people poor, but it would enhance the lives and wealth and wellbeing of the rest of the people in this country and across the globe if you do it globally. That’s the important point here. It’s not like you’re taking something away and the poor guy’s going to have to sell his mansion. It means something very different than that.
Chuck Collins: Yeah. A 3% wealth tax on someone with $50 million or more isn’t going to fundamentally change anything about their lives. But if we collectively put a wealth tax like we’re describing in place, it could generate huge resources to just lift up and improve the quality of life for everybody. And I would argue that’s going to be better for everybody, even the billionaires in society are going to live in a more equitable, healthy society. There’s going to be less economic volatility, polarization, and obviously it’s going to be better for democracy. And in the US context we have this proposal for an Annual Wealth Tax, like the one Senator Warren and Senator Sanders put forward. There’s also a proposal for something called a Billionaire Income Tax that Senator Wydne put forward, which would tax the unrealized gain, capital gains of these billionaires. And then we have an existing inheritance tax called the estate tax which has become a joke. It’s become so porous that the ultra wealthy pretty much opt out of it using trusts and other mechanisms.
So we can shore up the existing inheritance tax, but that’s a one-time tax at the end of life that is a very important part of this, and then implement some form of an annual wealth tax. Along with income taxes and other forms of taxation, we have a much more balanced tax system where the super wealthy are paying their fair share.
Marc Steiner: So this report that put out with the Institute for Policy Studies and their partners in this that came together to produce this report, “Taxing Extreme Wealth: An annual tax on the world’s multimillionaires and billionaires: What it would raise and what it could pay for,” is really well worth the read. It stimulates the brain in terms of what we could be doing and how to popularize this message and get people to really use this as a political tool. So folks, maybe before we go, Chuck, talk a bit about how people can get access to this report.
Chuck Collins: Yeah. The easiest is to go to Inequality.org, which is a website that I co-edit at the Institute for Policy Studies, or even just Google Institute for Policy Studies, it’s right up on the homepage. You can also find it at Oxfam International and Fight Inequality and the Patriotic Millionaires, all four of these groups got together. And by the way, the Patriotic Millionaires, they organized a couple hundred multimillionaires and billionaires to publicly come out and support our tax wealth message. So that’s part of the coalition that’s at the table. It includes some of the people who had to pay this tax. But yeah, check out the report and look at the country by country fact sheets too. That’s pretty interesting. There’s actually some new data just about the United States. For instance, there’s 63,000 people, households and individuals, who have $50 million or more. So we know about there’s 750 billionaires, but just thinking about how much wealth is in so few hands is part of the project here.
Marc Steiner: So if you can do this before we roll out of here, that number you just gave us, it was taxed at the, let’s say at the top of your proposals, what would it bring the country?
Chuck Collins: Well the proposal was to tax those 63,000 individuals or households at a 3% rate. There are 1.4 million households with $5 million or more, tax that group at 2% of their wealth, and tax the billionaires at a 5% rate. And again, if we did those, if we had a wealth tax that taxed at those levels it would raise $930 billion a year. If we tax the billionaires at a 10% rate it would raise $1.4 trillion a year. So that’s substantial wealth that the entire Build Back Better proposal that was being debated at the end was $2 trillion. And here, most of it could be paid for by a wealth tax.
Marc Steiner: And that’s something for us to chew on and think about. And so get a copy of this report, just go to Inequality.org and check that out. It’s really worth reading and seeing the reality of what we face and also begin to think about what we can do to make this a popular discussion and make this a part of a political reality as something to fight for. So Chuck Collins, again, thanks for all your work you do. Thanks for joining us again today. It’s always a pleasure to see you and talk to you. And we’ll continue to look at this and let’s cause some good trouble around this. Thank you so much.
Chuck Collins: Thanks Marc. Thanks for having me.
Marc Steiner: Thank you all for joining us today and please let me know what you think about what you heard today and what you’d like us to cover. Just write to me at firstname.lastname@example.org and I’ll get right back to you. And again, you can also go to Inequality.org to get a copy of that report we talked about called “Taxing Extreme Wealth.” And finally, a really important reminder that Bill Fletcher Jr. and I will be producing a series on the rise of the right and what we can do to stop it. Look out for that in March. It’s an important struggle and we have to stay on top of it. So for Dwayne Gladden, Stephen Frank, and the crew here at The Real News, I’m Marc Steiner. Stay involved, keep listening, and take care.