Allan Rolnick, CPA
Along time ago, in a galaxy far, far away, the Jedi Master Obi-Wan Kenobi warned a young Luke Skywalker that he would “never find a more wretched hive of scum and villainy” than the Mos Eisley Spaceport. ObiWan was wrong, of course. That place is Washington, DC, for obvious reasons. However, the scum and villainy seem to repeat themselves across the universe wherever wealth and power play together. For one week every January, that scene shifts to the Swiss ski resort of Davos, home since 1974 to the World Economic Forum. That’s where thousands of politicians, academics, and corporate leaders from across the globe – Very Serious People, all of them – gather to rub elbows and solve each other’s problems. (When populists warn about “shadowy global cabals,” this is exactly who they mean.) This year, they heard speeches from the leaders of Finland, Spain, Morocco, Germany, Korea, and Ukraine. They sat in on sessions like “What Next for Monetary Policy,” “DeGlobalization or Re-Globalization,” and “Mastering New Energy Economics.” They attended lavish banquets. And Microsoft sponsored a concert for just 50 people the night before announcing plans to lay off 10,000 employees. Last month, the group was greeted by something new.
A group of 205 millionaires and billionaires from thirteen countries sent an open letter with an urgent request: “The history of the last five decades is a story of wealth flowing nowhere but upwards. In the last few years, this trend has greatly accelerated … The solution is plain for all to see. You, our global representatives, have to tax us, the ultra-rich, and you have to start now.” Signers included Disney heiress Abigail Disney, oil heiress Nicole Getty, and even the Incredible Hulk. (Whoops, sorry, that was just Mark Ruffalo, the actor who plays him.) The letter doesn’t propose a specific tax. However, a group called Patriotic Millionaires, which helped sponsor the letter, argues that a global wealth tax of two percent on net worth over $5 million, three percent over $50 million, and five percent over $1 billion could have raised over $1.7 trillion in 2022. Of course, enforcing that sort of tax would be the sort of nightmare that would make an auditor’s hair stand on end. That’s especially true here, where many millionaires spend lobbying dollars to cut IRS staff.
Abigail Disney has been leading this particular charge for years, and she’s fired up. She says, “I’ve been to Davos. I’ve sat in the same room with some of the richest and most powerful people in the world as they talk about how they can make a difference, so I can say this with firsthand experience – Davos is a farce. Until Davos attendees start talking about taxing the rich, the entire gathering will remain a very public example of how out of touch they really are.” It’s not the only example, either. Would you be shocked to learn that one in ten of those Very Serious People flew their carbon-spewing private jet to this conference dedicated in part to tackling global warming? Fortunately for our unhappy fat cats here in America, there’s nothing preventing them from raising their own taxes right now. They can give as much as they want to the U.S. Treasury. Unfortunately, those gifts all wind up in a special fund dedicated to paying down our $31.4 trillion national debt and not supporting the social programs most Patriotic Millionaires seem to favor. Realistically, the Patriotic Millionaires aren’t likely to do anything more than keep income inequality a little closer to the center of the Davos discussion. But just in case such a thing does come to pass, we’ll put our own Jedi planning skills to work to let you keep control!
Allan J Rolnick is a CPA who has been in practice for over 30 years in Queens, NY. He welcomes your comments and can be reached at 718-896-8715 or at firstname.lastname@example.org.