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.
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.
They’ve achieved this amazing level of deficit spending as our economy is rolling along at breakneck speed, with anyone who can fog a mirror employed and paying taxes, with houses selling in bidding wars and with cruise ships filled, hotel rooms reserved and restaurants and bars packed.
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.
One related example is Beyond Meat. 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, Wagyu!
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.
Some will argue that my proposal is gross and unfair. Well, friends, that’s just fake news. My counterargument 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 those days are over.
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, let’s compare it to the federal deficit in each year to see whether the income of the top 1% would be enough to provide the necessary revenue. If it isn’t, we’ll expand our net to the top 2%. 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% of the income from the top 1% 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 accompanying table.)
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.
Scott Burns is the creator of Couch Potato investing and a longtime personal finance columnist for The Dallas Morning News. Visit his site at couchpotatoinvesting.com. Twitter: @scottburnsSAL.