A few years ago, in one of my bolder proposals, I suggested that we eat the rich and take all their money.
It was a surprisingly popular idea, immediately accepted by the vast majority of people who don’t consider themselves rich. The rich were surprisingly silent about the notion, perhaps because they were busy thinking about renewing their passports.
Why we need to give this notion some consideration.
I’m giving the idea some more thought today. The reason it comes to mind again is simple. I’m trying to come to grips with a troubling fact.
The only thing our two political parties can agree on is spending more money they don’t have.
If you’ve seen the news, it appears that our friends in Washington will have managed to spend $1 trillion more than they received in revenue for the current fiscal boom year. Trillion dollar deficits are also expected for 2020 and 2021.
Deficits in the best of times
They’ve achieved this amazing level of deficit spending as our economy is rolling along at break-neck speed, with anyone who can fog a mirror employed and paying taxes, with houses selling in bidding wars, cruise ships filled, hotel rooms reserved, and waiting lines at restaurants and bars.
It would be good to consider the boundless new wealth from initial public stock offerings, too. The IPO boom has created so much new wealth that the median home price in San Francisco is now $1,362,200, according to Zillow, and new high-rise condos in downtown Austin are bringing Manhattan prices.
Need I mention Beyond Meat?
One related example is Beyond Meat (ticker: BYND). The company, which sold 15.2 million pounds of un-meat last year, has seen its shares sell as high as $240 a share and a total market capitalization in the billions. Indeed, a Reuters article observed that the company had a market value of $143 for each quarter pound patty sold in 2018.
Take that, Waygu!
Surely if it’s that easy to create new wealth with a clever mixture of peas and beets, we can do something to get the cash to support our government in the style to which it has become accustomed.
That’s why I think it’s time to give eating the rich and taking their entire income some serious thought.
Yes, Life is Unfair
Some will argue that my proposal is gross and unfair. Well, friends, that’s just fake news. My counter argument is that we have to be practical. Eating the rich and taking all their money may be unfair. But so is life. Sometimes you just have to be unfair. Where else can our government get the money?
Once upon a time we could get it from China. But that day is over.
Eating the poor won’t do
We know it can’t be squeezed from the poor. People who are poor don’t have any money. That’s why they are poor. Face it: When it comes to taxes, the poor are just another tunnel with no cheese. On the practical side, a Bentley full of really rich people could yield more cash than you could squeeze from entire census tracts.
So let’s test the idea. Let’s check the data collected by our friends at the Internal Revenue Service. It’s easy to do. It’s all online. Every year the service does an analysis of income and taxes, sorting from those with the very greatest incomes to those with the least. The latest year for which data is available is 2016, but it goes back to 2001.
With that info in hand, we’ll then compare it to the federal deficit in each year to see if the income of the top 1 percent would be enough to provide the necessary revenue. If it isn’t, we’ll expand our net to the top 2 percent. Or more.
We’ll do whatever it takes to pay the bills.
I have to say the preliminary work is encouraging.
If our tax system had simply taken 100 percent of the income from the top 1 percent of taxpayers, the record shows that the entire federal deficit would have been covered in all but three years since 2001 – the recession years of 2009, 2010 and 2011. (You can see this in the table below.)
Indeed, on a cumulative basis, the other years are so positive that the total surplus would be nearly $9.9 trillion. That’s enough to pay off a big chunk of our $22 trillion in federal debt. It’s way more than enough to put some real cash into the $2.9 trillion Social Security trust fund.
Is eating the rich extreme? You bet. I’ll examine an alternative in my next column.
My Modest Proposal:Feeding the Top 1 Percent to the Federal Deficit |
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This table shows the federal deficit in each year since 2001, income of the top 1%, taxes paid by top 1%, after tax income of top 1% and the federal surplus/deficit if all after-tax income had been taken as tax. The income of the top 1 percent would have covered the federal deficit for the entire period with a net surplus of nearly $9.9 trillion. All figures in this table are in millions of dollars. | |||||
Year | Federal
Surplus/Deficit |
Top 1%
Income |
Taxes
paid |
After Tax Income | Surplus/Deficit
After full tax |
2001 | 128,236 | 1,064,928 | 293,968 | 770,960 | 899,196 |
2002 | -157,758 | 960,352 | 262,820 | 697,532 | 539,774 |
2003 | -377,585 | 1,030,178 | 251,146 | 779,032 | 401,447 |
2004 | -412,727 | 1,278,879 | 300,802 | 978,077 | 565,350 |
2005 | -318,346 | 1,560,659 | 361,264 | 1,199,395 | 881,049 |
2006 | -248,181 | 1,761,119 | 401,610 | 1,359,509 | 1,111,328 |
2007 | -160,701 | 1,971,021 | 442,633 | 1,528,388 | 1,367,687 |
2008 | -458,553 | 1,656,771 | 385,857 | 1,270,914 | 812,361 |
2009 | -1,412,688 | 1,304,627 | 313,826 | 990,801 | -421,887 |
2010 | -1,294,373 | 1,517,146 | 354,810 | 1,162,336 | -132,037 |
2011 | -1,299,599 | 1,555,701 | 365,518 | 1,190,183 | -109,416 |
2012 | -1,076,573 | 1,976,738 | 451,328 | 1,525,410 | 448,837 |
2013 | -679,775 | 1,719,794 | 465,705 | 1,254,089 | 574,314 |
2014 | -484,793 | 1,997,819 | 542,640 | 1,455,179 | 970,386 |
2015 | -441,960 | 2,094,906 | 567,697 | 1,527,209 | 1,085,249 |
2016 | -584,651 | 2,003,066 | 538,257 | 1,464,809 | 880,158 |
Sources: https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-rates-and-tax-shares , 2001-2016 data , https://www.whitehouse.gov/omb/historical-tables/, Table 1.1 |
Related columns:
Scott Burns, “Is it time to eat the rich?,” 11/14/2010 https://scottburns.com/is-it-time-to-eat-the-rich/
Sources and References:
Trefis Team, “Beyond Meat’s Valuation: Are Investors Overpaying For This Meal?,” Forbes online, 7/1/2019 https://www.forbes.com/sites/greatspeculations/2019/07/01/beyond-meats-valuation-are-investors-overpaying-for-this-meal/#3cedd9eb422a
Reuters.com, “What is a beyond meat burger worth to hungry investors?”
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, LA restaurant awaits a new menu
(c) Scott Burns, 2019
2 thoughts on “Is It Time To Eat The Rich?”
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The solution toward eliminating Federal deficits and debt is not raising taxes, but cutting spending. How to Cut Government Spending:
We need a real and huge spending cut program. Start with the government subsidies (there are over 2200 of them) – eliminate all of them (that equates to hundreds of billions of dollars every year year). Subsidies, which always interfere with the free marketplace, are essentially a “slice” of Communism – the most failed Economic system ever. Next reduce government workers’ salaries, pensions (no more full retirements at age 55 or under; wait until age 65 like the rest of us to earn full retirement benefits), and benefits to the equivalent of their counterparts in the private sector. Instead of pensions, put them on Social Security and contribute a small percentage of their annual salaries annually to their IRAs or 401Ks. No overtime pay for management employees. Go to automatic income tax deductions similar to Social Security – no IRS forms to fill out – enabling us to eliminate most of the IRS. Abolish the debt ridden and job killing Obamacare. Government regulators get a new job – instead of endlessly creating more job killing regulations, they start of with a clean piece of paper, make a minimum of needed regulations and eliminate the millions of regulations on the books now. Consolidate government agencies as has been recommended in the past. For instance, we don’t need separate departments for Medicare, Medicaid, and Senior prescription drugs – one organization should be able to handle all of it. 535 Congressman and senators don’t need their individual huge staffs repeating the work of each member 535 times. They get small staffs and a small pool of workers for each political party to share their work results with all their party members. We sell the 14,000 government buildings not being used. We don’t give income tax refunds to those who don’t work. We don’t give government housing to anyone but limited military. Fathers whether wed or unwed must support their children. Unwed, welfare mothers get no government support unless they truthfully identify the fathers (who then must provide child support). Illegal aliens get no government assistance, no jobs, no free education, no place to live and we have a tough, mandatory system with employers, schools, and apartment/housing rentals, and the IRS to ensure that all gets done. If caught, then before immediate deportation, we take all their assets – houses, furniture, cash including bank and brokerage accounts, from them and send them home with just the clothes on their backs. We toughen Social Security Disability requirements, especially for reasons of “stress”. Children must legitimately pass their school subjects to be promoted. If they get left back twice, a social worker investigates the family to see if it is in the best interests of the child to bring the family to Family Court to determine if the child is in a toxic family (alcohol and/or drug abuse) and should be taken away from their family. All public (that is, government) unions are outlawed as they should be as a corrupt conflict of interest (supporting the election of politicians, then negotiating with these same politicians for wages and benefits). Government agencies that are responsible for social security or any form of welfare/subsidy must operate within administrative costs of no more than 5% of their total budget (same as a good charity). Since Medicare fraud is estimated to range from 10-25% (or hundreds of billions of dollars per year), while private insurance fraud is less than 1%, fire the government workers and instead hire insurance companies as third party providers to administer Medicare and Medicaid.
Yes, lots of room for spending cuts, particularly in healthcare if the hospitals, big pharma, and insurance companies will let it happen. As a practical matter, they will fight it tooth and nail.
Scott