October 27, 2021
Ding-dong, the Billionaire Tax is dead! Or maybe not—who the hell knows? In any case, here's something to think about as Twitter pundits ready the ventilator. In November 2007, a young sociologist named Brooke Harrington enrolled in a two-year wealth management training program to earn her Trust and Estate Planning certification. Her goal was not to become a wealth manager, but to study closely the industry of professionals trained to cater to the financial (and other) needs of the ultrawealthy, or, as one interviewee put it, "doing social work for the rich." That industry has exploded over the past couple of decades, creating a decidedly non-virtuous cycle. In 2018, Ernst & Young, the consulting and accounting giant, predicted that high-wealth individuals around the globe would hold nearly $70 trillion in "investible assets" by 2021. (The pandemic, counterintuitively, has rendered that estimate pretty quaint.) An earlier EY report stated that, as of 2016, there were "at least 10,000" family offices worldwide—private companies that exist solely to service the financial and social needs of families whose typical net worth is $200 million or more. At least half of those entities, EY reported, didn’t exist before 2000. Harrington's study resulted in a seminal 2016 book, Capital Without Borders, that shows how the professionalization of wealth management—which Northwestern political scientist Jeffrey Winters calls "wealth defense"—parallels the global rise in economic inequality. In addition to lobbying to maintain the status quo, or worse, the wealth industry provides cover for "good" rich people who acknowledge that America's tax codes skew in their favor, but who then adopt the attitude of "Don't hate the player. Hate the game." Even good old Warren Buffett, who has called for higher taxes on guys like him, takes full advantage of, well, his advantage. As of this morning, the spending package in play on Capitol Hill included an unprecedented Democratic proposal that would tax billionaires to help pay for progressive priorities. It was payback time—or perhaps not. As I pointed out in a Mother Jones post, the proposals officially unveiled this morning by Sen. Ron Wyden face myriad challenges—not the least of which is that the Senate's ethically challenged gentleman from West Virginia doesn't like them. Meanwhile, Sen. Krysten Sinema, the other holdout Democrat, opposes even modest, highly popular increases in ordinary personal, capital gains, and corporate tax rates. By mid-afternoon, a Bloomberg News reporter had posted on Twitter that, according to House Ways & Means Chairman Richard Neal, the Billionaire Tax was out of the Biden spending package. That was quick! The White House and progressive senators pushed back and all remains in confusion, But this is the simple tragedy of our divided republic. The affluent dominate politics, as always, regardless of which party rules. The fox guards the henhouse. The smartest, most sensible proposals end up as roadkill, and all that's left for reform-minded lawmakers are the Hail Marys. Welp, at least we're halfway through the week. Happy Wednesday! —Michael Mechanic Advertisement 
If only Congress weren’t so beholden to the rich. BY MICHAEL MECHANIC
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