What do fair taxes look like?

I’m not going to go all Socialist on you — although some of you would like that — but I am going to kick around the idea of what is a “fair” amount of income tax to saddle impose on the rich.

And my case in point will be Elon Musk, who I regard as an idiot savant, a  provocateur with an odd sense of humor and “fuck you” money.

Musk isn’t quite the world’s richest man, but that is clearly one of his goals. The 52-year-old South African — yes, he is African-American — is worth an estimated 210 billion dollars, and would like to be a trillionaire, which is 1,000 billions. (There are more than 100 countries with less than $200 billion in Gross National Product. You can think of Musk as a nation.)

Bernie Sanders would like to derail Musk’s trillionaire dreams. The 82-year-old Brooklyn-born Vermont U.S. senator calls himself a “Democratic Socialist” because calling himself what he is, a Socialist, would freak out too many people. 

Bernie regards the rich as rapacious thieves, and is all the time saying they should pay their “fair share” of taxes. The problem is, he never defines what he means by “fair share.” And he has been asked.

He has defined a corporate tax rate, as 35%. (The average corporate tax rate of the G7, the wealthiest nations in the world, is 27%. Only three countries have a higher corporate tax rate than 35% — the economic powerhouses 😄 of Comoros, 50%,  Puerto Rico, 37.5%, and Suriname, 36%.)

As for the personal tax rate, Bernie dodges using a number, even on his official tax-the-rich website.

No matter how hard I look, I can’t find a concrete number. It is odd that he says “fair,” but won’t say what it is. He might get further if he did.

He wants the rich to pay more so the poor(er) would pay less.

The question is how much less can the poor(er) pay?

In the last year for which we have statistics, 40.1% of American households paid no federal income tax. Zero. (Yes, the argument goes, they paid other taxes, such as sales, and Social Security, as do we all, but no federal income tax.)

Balancing the zero paid by 40.1%, the top 5% of taxpayers paid 42% of the revenue received by the government.

Does that seem “fair”?

Well, yes, if you believe that our progressive tax code — in which the higher earners pay a higher percentage than lower earners — is fair.

Some, mostly conservatives, say it is not, but the majority of Americans accept it as a form of leveling based on ability to pay.

Not fairness, but ability to pay.

Let’s look at it another way.

Joann is a single mother with two teenagers earning $75,000 a year. She pays about $11,553 in federal taxes. She can feel the tax bite. It makes a difference in where she shops, and where she lives, and where her kids go to school.

In 2021, Elon Musk paid federal income taxes of $11 billion, and it made absolutely no  difference in what he buys, where he lives, or the welfare of his seven children.

The numbers are so big we sometimes forget what they mean. A billion is 1,000 millions.

What brings this to mind is a story that Musk is asking the shareholders of Tesla, the electric car operation he launched, to approve a $50 billion stock package for him. Tesla’s annual meeting is Thursday.

That shriek you heard was from Bernie.

And from me.

Is a $50 billion package fair? Is it right? Is it greed? 

How much is enough, and is it the business of the government?

Here, Bernie does have an answer. It is a “tax on extreme wealth.”

The tax would be 0.1% surcharge applied only on net worth over $32 million, which affects 180,000 families.

“Over the last 30 years,” Bernie says, “the top 1% has seen a $21 trillion increase in wealth, while the bottom half of American society has actually lost $900 billion in wealth.”

The three richest individuals in America control more wealth than the bottom half of the American people.

Is that fair?

The extreme wealth tax would start at 1% on net worth over $32 million for a married couple, rising to 8% on wealth over $10 billion. 

It is as constitutional as income tax itself, and inheritance tax, and taxes on investments.

The tax would raise $4.35 trillion over 10 years and would fund housing, child care and Medicare for All, says Bernie.

Does it “punish” the rich?

Well, maybe it does, in a way.

But it doesn’t hurt them. The top 0.1% wants for nothing, and never will. As much as I want to say that that what you have is none of the government’s business, I instead must ask how much is enough? Is greed limitless?

Billionaire Mark Cuban said getting rich is one of the most patriotic things you can do.

And then he added, “Pay your taxes. Lots of taxes. Hire people. Train people. Pay people. Spend money on rent, equipment, services. Pay more taxes.”

Getting back to the starting point of defining fairness, for me it is taking much more from people who will never even miss it. 

So how do you define fairness?