I was recently talking to a tech mogul whose wealth has soared during the pandemic. He asked me what we should do to solve the country’s financial problems, as he was getting wealthier by the second.
Deal with entrenched income inequity immediately, I told him. “You can make the hard choices to fix it, or …,” I said, pausing for dramatic effect, “you can armor-plate your Tesla.” He cringed.
Trolling the obscenely rich digerati is always satisfying. But this time the conversation got me thinking about one thing we can ask of tech leaders — and of all of those who have done so well in the last year — to help get us out of our economic mess and on the path to a more equitable future.
My proposal: an immediate, one-time “wealth tax” covering the last year.
It’s easy to denounce the idea of new taxes as the knee-jerk solution to economic woes, but we live in a damaged country, and someone eventually has to pay to fix it. So why not look to those who have profited the most during the pandemic?
Tech executives, of course, are among those who have gotten significantly richer during this time — not because of some new inventions but because their services filled many voids created by the dire circumstances.
Right now, putting Saudi Aramco aside, the top five most valuable companies in the world are tech giants: Apple, $2.41 trillion; Microsoft, $1.76 trillion; Amazon, $1.67 trillion; Alphabet/Google, $1.3 trillion; and Facebook, $803.4 billion. And as huge as those numbers are, and as much as they have grown in the last months, they hardly quantify the impact that these behemoths have on politics, culture, business and, most of all, innovation.
These are the makers of most of the tools we can’t live without. These companies’ iron grip on our lives became even stronger during the Covid pandemic.
So, how to rein in tech’s power? It’s a question with more urgency since the attack on the Capitol, an event spurred by lies that were spread on tech platforms like Twitter and Facebook.
In the long term, we’ll certainly have to rely on government action that includes better enforcement of regulations, new laws around privacy and data, reform of the Section 230 law that gives online platforms broad immunity, and the ultimate action, antitrust lawsuits (which are already taking shape).
For the here-and-now, the answer may be some one-time taxes on those who have made buckets of cash over the last year, including the tech titans.
A permanent wealth tax was raised last April in a Times Op-Ed essay by the Yale professor Daniel Markovits. It still sounds logical nine months into the pandemic:
“The precise contours of such a tax obviously require detailed design. Still, a rough outline illustrates the basic idea. The wealthiest 5 percent of American families now hold $57 trillion, or two-thirds of all household wealth in the country (up from about half in 1960). An exemption for the first $2.5 million of household wealth would exclude the bottom 95 percent from paying any tax at all and leave the top 5 percent with total taxable wealth of roughly $40 trillion. A 5 percent tax on the richest 5 percent of households could thus raise up to $2 trillion.”
When politicians like Senators Elizabeth Warren and Bernie Sanders proposed a permanent wealth tax on the extremely rich during the early part of the presidential campaign, it was met with collective horror by many, and techies in particular, since they have been among the big winners in a rising stock market.
I thought then that a wealth tax was politically unfeasible and also that the very wealthy have lots of ways to avoid paying. A wealth tax is also a direct stab at the motivating forces of innovation, of which the greed gene plays no small part. Why kill that off since it often yields amazing things?
But a one-time wealth tax that is finely tuned makes sense to me. A bill is coming due for all the pandemic relief money. And even more money is needed to revive the economy. This includes finding funding for promising areas for future tech around climate change and transportation.
Admittedly, it wouldn’t be easy to devise such a tax. There would be all kinds of legal challenges.
Still, the idea of forcing the comfortable to comfort the afflicted in the short term has great appeal. This is especially true since the wealthy have been able to quarantine remotely with ease and with little impact on their way of life.
An even more compelling idea was raised by another high-level techie, who suggested a specific tax on social media companies, perhaps on their advertising revenues, to pay for the repercussions of the toxic waste that flows over their platforms.
“It’s like a soda tax, a cigarette tax, because it is just as addictive,” the executive, who is not from a social media giant, told me. “They made our society sick by pumping out the poison and we need to bill them for that since they cannot self-regulate and getting the right laws in place will take forever.”Rather than making us diabetic or cancer-riddled, the neglect from some of the tech companies has made us hateful in ways we need to reverse, and soon. Rage fostered online has a societal cost, and those responsible should pay for it.
Meanwhile, we are in a war with a virus, and those who have sacrificed the most so far are the disadvantaged. Let’s flip that script.