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Billionaires Should Not Exist — Here’s Why

BY REBEKKA AYRES

DECEMBER 29, 2021

https://www.teenvogue.com/story/billionaires-should-not-exist

In a fair society, there would be no billionaires. Bernie Sanders says they shouldn’t exist and Elizabeth

Warren sells mugs of their tears. I’m talking about billionaires and making the case that an economic

system that allows them is immoral.

We have arrived at an obscene inequality crisis, in which wealth is concentrated in the hands of a

powerful few, at the cost of crippling hardship, precarity, and compromised well-being for the many.

When a single billionaire can accumulate more money in 10 seconds than their employees make in one

year, while workers struggle to meet the basic cost of rent and medicine, then yes, every billionaire

really is a policy failure. Here’s why.

What does a billion dollars look like?

Most of us would consider a multimillionaire to be extremely wealthy. A billion dollars exists on an

altogether different scale. If you want to imagine what it looks like, this visualizer compares bundles of

$100 bills to show how a million stacks up to a billion. It’s a mind-bogglingly large sum of money, so let’s

try to make it meaningful in day-to-day terms. If someone gave you $1,000 every single day and you

didn’t spend a cent, it would take you three years to save up a million dollars. If you wanted to save a

billion, you’d be waiting around 2,740 years. See for yourself — this calculator works out how long it

would take for one of the big billionaire CEOs to earn your annual salary or pay off your student loan. All

this shows how the personal wealth of billionaires cannot be made through hard work alone. The

accumulation of extreme wealth depends on other systems, such as exploitative labor practices, tax

breaks, and loopholes that are beyond the reach of most ordinary people.

How does a billionaire become so wealthy?

Alexandria Ocasio-Cortez explains how the ultra-rich can be seen as beneficiaries of an unjust economic

system where she says billionaires don’t make money, they take money. It’s impossible to have that

much money without profiting off of other people's lack of it. Even if individuals are only implicated

discreetly, the capitalist class generates profits upwards by denying workers a living wage, engaging in

exploitative labor practices (directly or indirectly along the supply chain), ensuring that medicine and

health care costs remain high, or lobbying for or even simply benefitting from favorable taxation policies

and cushy government subsidies. Wealth is also able to accumulate via close proximity to power, with

corporate connections leading to elected office, or merely allowing people to use their influential status

to set the agenda according to their own interests. This is known as plutocracy, or rule by the rich, and it

undermines democracy. It’s no coincidence that Donald Trump’s landmark 2017 tax cuts were driven

largely by big business and helped billionaires pay less than the working class for the first time. When

the capitalist class is able to write the rulebook and lobby for preferential tax rates, it’s virtually

impossible to achieve social and economic reform in a way that is meaningful to the majority of working-

and middle-class Americans.

Is it possible to be a self-made billionaire?

It’s really a question of whether anyone can ever be “self-made,” or whether this is the language of a

larger myth that justifies wealth inequality. The self-made myth conceals the multitude of barriers to

wealth accumulation and reinforces the notion that if you’re poor, it’s because you’re lazy or made bad

choices. The notion that a billionaire has worked hard for every penny of their wealth is simply fanciful.

The median U.S. salary is $34,612, but even if you tripled that and saved every penny for a lifetime, you

still wouldn’t accumulate anywhere close to a billion dollars. Here, it’s also worth looking at Oxfam’s

extensive study on extreme wealth, which found that approximately one-third of global billionaire

fortunes were inherited. It’s not about working harder, smarter, or better. There are many factors built

into our economic system that help extreme wealth to multiply fast. It’s a matter of being well-placed to

benefit from the structures that favor capital and produce a profit off the back of exploitation.

How deep is the inequality divide?

In October 2021, there were 745 American billionaires, while around 11.5% of the population live below

the poverty line. During the pandemic, their collective fortunes swelled by $2.1 trillion — just to frame

that figure in real terms, that roughly equates to more than the total outstanding student debt and

more than is being offered in Biden’s “once-in-a-generation” American Families Plan, which promises

national investment for 10 years. Meanwhile, there’s not a single state in the U.S. in which even a $15

wage, which sits above the minimum in many states, would afford someone to rent a two-bedroom

apartment. This report illustrates the scale of billionaires’ surging wealth in line with the precarious

conditions of essential workers, many of whom have been denied hazard pay or substantial sick-leave

benefits. There is no ethical way to justify this and there’s not an economic reason either. Jeff Bezos

could give every single one of his 876,000 employees a $105,000 bonus and he’d still be as rich as he

was at the start of the pandemic.

But if billionaires didn’t exist, wouldn’t we all be worse off?

While it appeals to common logic to think the wealth of the richest few eventually trickles down to the

many, the reality is that it doesn’t work this way, not least because America’s richest can entirely and

legally sidestep the system to enjoy virtually tax-free status. It’s true that the billionaire class creates

jobs and that wages have the potential to drive the economy, but that argument falters when workers

barely have enough to survive. The potential to generate tax dollars from billion-dollar profits is

enormous. Oxfam found that if the world’s richest 1% paid just 0.5% more in tax, we could educate all

262 million children who are currently out of school and provide health care to save the lives of 3.3

million. But given generous tax cuts and easily exploitable loopholes like the ability to register wealth in

offshore tax havens, this rarely comes to pass.

So what could keep extreme wealth in check?

Prior to the 2020 election, prominent Democrats were rallying to tax the rich. Elizabeth Warren touted

an annual wealth tax and Senator Sanders planned to hike the top estate tax rate to 77%, while AOC

pitched a 70% top marginal tax rate. Seventy percent may sound drastic, but it’s actually not that

radical. The U.S. had a similar rate in the 1960s for the wealthiest households, during

what economists like Paul Krugman cite as “the most successful period of economic growth in our

history.” Check out this rundown to learn how it would work.

If billionaires do not live off work but live off wealth, why don’t we tax wealth like we tax work? Most

Americans believe the government should do more to address extreme wealth. After all, Joe Biden was

elected on a promise to raise taxes for those earning over $400,000 from 37% to the pre-Trump cut

levels of 39.6%, and limit tax breaks. This barely scratches the surface when it comes to the obscene

wealth of billionaires. While taxing unrealized capital gains at death goes some way to shift the balance,

it falls short of a progressive tax on the unrealized gains that accumulate while the richest in our society

are still alive.