Silicon Valley Fears the Bern

Happy Wednesday from Los Angeles.

Today, I’m back with a closer, hopefully sober look at the plan to tax people like Elon Musk and Jeff Bezos to smithereens. Democrats clearly have gazillionaires like them in the crosshairs. And while it is quite possible that the billionaires tax will not survive this round of Washington wrangling, you should think of this as but the first front in a years-long war to come against the ultra-rich. And so I wondered: What is the wealth defense industry going to do about it?

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Will Billionaires Really Get Taxed to Smithereens?

In a short time, a seemingly quixotic billionaire tax has become a credible threat to enter Biden’s multi-trillion social spending plan. Is this all liberal pie-in-the-sky fantasy? Or the beginning of a new cri de coeur for the wealthiest Americans, and those who manage their money?

TEDDY SCHLEIFER

Way back in 2018, in the earliest days of the Democrats’ so-called invisible primary, Joe Biden candidly pitched himself as the type of pro-success Democrat who wouldn’t demonize the wealthy. “I don’t think 500 billionaires are the reason we’re in trouble,” Biden said in a speech that year, drawing a distinction between himself and Bernie Sanders. And yet a presidential campaign later, 18 months after wealth tax proponents like Bernie and Elizabeth Warren petered out of the Democratic primary, those billionaires are firmly ensconced in the Biden barrel. A proposal to tax the hell out of them in the most controversial manner has abruptly become a credible proposal in an exhausted Washington, borne less out of an ideological commitment from Biden than from a frenzied, deadline-fueled panic to find $2 trillion in revenue that a single senator won’t deep-six.

The “billionaire income tax” may have emerged overnight, but it’s all too easy to see how we arrived at this consensus: Billionaires are growing increasingly unpopular with both the populist left and the populist right, fueled by the sense that the economic system is rigged, and became even more rigged during the pandemic. If you’ve got to pick the pocket of someone, there are few easier targets than a group comprising about 700 people, as powerful as they may be.

The complex proposal, which would levy an annual tax on their unsold publicly-traded assets, would be a radical transformation of the American tax regime...