One of the more telling moments in last Monday’s Presidential debate has gone relatively unnoticed.
That moment came after GOP nominee Donald Trump, during an exchange over taxes, made no move to dispute the charge that he hasn’t paid any federal income tax over recent years.
Commentators quickly picked up on this politically surprising admission. But they still haven’t chatted much at all about the justification that Trump advanced for stiffing Uncle Sam: If he were to pay more in taxes, Trump defiantly quipped, whatever he paid would be “squandered” away by the government.
This “squander” defense has, in many right-wing circles, essentially become the prime go-to rationale for opposing any move to tax the rich and their grand personal fortunes.
In the week before Monday’s debate, just coincidentally, Hillary Clinton made her strongest move yet to give those fortunes a trim. Clinton proposed a tax plan that closely tracks the plan Senator Bernie Sanders was pitching during the primaries. Her plan sets a new 65 percent estate tax rate on any personal fortune left by a deceased deep pocket that runs over $500 million.
Hillary’s new plan, overall, would raise $260 billion in additional federal revenues over 10 years, with all of those billions coming from billionaires and their multimillionaire kin.
But this more than a quarter-trillion dollars in new revenue, the “government-can-only-squander” crowd assures us, amounts to no big deal — since “Washington” would just fritter any new money away.
Well, that certainly could happen. But let’s look at what is already happening while we let the wealth of the United States — and the world for that matter — concentrate in the pockets of a ridiculously small number of fantastically wealthy people. We are all today living in an epoch of epic squandering.
Want to see this squandering up close? Make a reservation for the Riviera and next year’s annual Monaco Yacht Show.
The 2016 Monaco Yacht Show wrapped up this pst weekend and drew almost 35,000 people. They spent four days ogling the 125 yachts on sale. The combined price-tag for the yachts on display: just about $3 billion.
The actual price paid for these yachts will likely run a good bit higher. Many buyers, insiders point out, want their new yachts customized. The shipbuilding industry has a rule of thumb that puts the cost of a luxury yacht at $1 million per meter of yacht length. But customizing — on the plushest superyachts — can run that cost to $13 million per meter, hundreds of millions for a single boat.
What sort of customizing are we talking about here? One buyer in town for this year’s Monaco show wanted a yacht with a separate room for his skis. That way, the buyer explained, he could yacht into the Mediterranean in the winter, enjoy the warm sea breezes, then “take a helicopter and go skiing.”
Top-of-the-line yachts carry, of course, their own onboard helipads. The next generation of exotic yachts, luxury aficionados in Monaco last week learned, will go a step further. The Henry Ward Design firm has fashioned a superyacht that will come with a people-carrying drone!
The drone will hold four fortunate folks and operate autonomously. Just press a destination on the touchscreen, and “off you go.” And if you’d rather stay onboard, the new Henry Ward superyacht will offer a rock-climbing wall that bends over a pool on the boat’s sundeck. Lose your hold on the wall and you plop into the pool. What remarkable fun!
Monaco has become “synonymous with hedonism, excess, and unadulterated opulence,” and shoppers in town for the yacht show last week had plenty of distractions to help them pass the time, including one restaurant at the Hotel de Paris where the signature dish, steamed blue lobster, ran a mere $220.
Diners who polish off a few too many of those blue crustaceans have the option of retiring to a wide range of luxurious accommodations. The Suite Azur at Monaco’s Hotel Metropole Monte-Carlo can run $12,781 for two nights.
Who can afford prices like these for a sojourn in Monaco — and maybe buy a yacht or two before they head home? Analysts at Wealth-X, a Singapore-based research firm, have some answers in their just-published fourth annual World Ultra Wealth Report.
The world now hosts, the Wealth-X researchers calculate, 212,615 individuals with a personal net worth of over $30 million. These “ultra high net worth” affluents make up just 0.004 percent of the world’s adult population. They hold 12 percent of the world’s wealth.
Americans make up 33 percent of this global ultra rich and sport an average net worth of $137 million. Since 2011, Wealth-X reports, the combined wealth of these Americans has jumped by 25 percent.
Billionaires like Donald Trump make up less than 1 percent of the American “ultra high net worth” cohort. But these billionaires hold 25.9 percent of the combined wealth of all Americans worth over $30 million.
Donald Trump doesn’t want any of this wealth subject to an estate tax, either the modest estate tax we already have or the more ambitious estate tax Hillary Clinton is now proposing. Trump is calling for the full repeal of estate taxation.
The Donald simply does not want the government to “squander” a single cent of the wealth he and his super-rich friends have so diligently amassed.
Donald’s crowd is, in effect, asking the rest of us to leave the squandering to the only people who really know how to squander. Our insanely wealthy ultra rich.
Institute for Policy Studies associate fellow Sam Pizzigati co-edits Inequality.org. His most recent book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900–1970. Follow him on Twitter @Too_Much_Online.