Time for welloff to bear more of burden
Dale Walker, a retired financial services executive, has been concerned about income inequality for years. “We are advancing toward a highly stratified society of haves and havenots,” Walker, a San Francisco resident, wrote in an October 2017 opinion piece published by The Chronicle. “This will make walking down the street unpleasant, maybe dangerous. Crime, drug addiction, homelessness and other societal costs will increase. Eventually, continuance of this trend will result in bloodshed and revolution.”
Walker is part of a group of welloff people who want to see a better country. They call themselves Patriotic Millionaires and, among other things, they want a guaranteed living wage and a fair tax system.
In other words, they want to spread the wealth.
The wealth gap between America’s richest and poorest families more than doubled from 1989 to 2016, according to the Pew Research Center, a nonpartisan think tank that conducts public opinion polling, demographic research and content analysis. Income inequality influences financial, educational and health outcomes, and the coronavirus, which has caused 185,000 deaths and left millions unemployed, has already widened the gap between the haves and havenots.
After months of social unrest, including fatal shootings at protests in Wisconsin, Oregon and Kentucky, I wanted to hear how Walker feels about income equality today.
“I don’t know if we’re going to see a revolution, but I do think some of the things we’re seeing on the streets is not only a reflection of concerns over police brutality, but I think they’re a reflection of the inequality and the lack of good jobs and the lack of living wages,” he told me last week. “I don’t see the wealthy sufficiently waking up to deal with it, and I think it’s in their best interests to do so.”
As this country honors American workers on Labor Day, there’s not much to celebrate. Last week, more than 830,000 workers filed new claims for unemployment benefits, according to the Labor Department. And that’s in addition to the 759,000 people who applied for benefits under a new program for the selfemployed and gig workers.
In total, there are about 13 million people receiving unemployment as temporary layoffs become permanent. Businesses are failing, which could keep millions out of the labor force indefinitely, similar to the 200709 recession.
If America wants to buttress its standing as the greatest country in the world, it has to do more for the people who work hard for a living but struggle to survive. Maybe it’s time to ask those who live comfortably to step up.
As my colleague Kathleen Pender reported, a firstinthenation state wealth tax that would hit about 30,400 California residents and raise an estimated $7.5 billion for the general fund, was proposed last month. The tax rate would be 0.4% of net worth, excluding directly held real estate, that exceeds $30 million for single and joint filers, and $15 million for married filing separately. The bill stalled, but Assemblyman Rob Bonta, DAlameda, the bill’s lead author, said he’ll reintroduce it next session.
“Our most vulnerable communities and most disadvantaged communities are least able to bear the burden of a crisis, but they’re the ones being asked to bear that burden,” he said. “We need to ask those who are more able to bear that burden to do so.”
Patrick Gourley, an assistant professor of economics at the University of New Haven, said measuring wealth will be difficult.
“If you’re talking about the super rich, someone that’s worth $50 million — they’re worth $50 million, but they don’t have $50 million in a Scrooge McDuck vault,” Gourley said, referring to the avaricious Disney cartoon character. “Being a millionaire on paper is not the same as being a millionaire in your bank account.”
As former presidential candidates Bernie Sanders and Elizabeth Warren rolled out their wealth tax plans last year, many observers pointed out that 30 years ago, 12 European countries had a wealth tax. But three decades later, all but three — Norway, Spain and Switzerland — have repealed the tax because it was expensive to administer and it didn’t raise much revenue. The rich simply moved their money to other countries.
“If you’re a rich person in California who doesn’t feel like complying with the law and paying taxes on all your wealth, you might be able to hide assets somewhere out of state,” said Alan Auerbach, a UC Berkeley professor of economics and law. “If it were a small tax, it probably wouldn’t have much impact on people’s decisions about where to live. If it were a more substantial wealth tax, it could play a role.”
I know there are people who are ready to contribute more. I’ve seen someone help an elderly Black woman buy back her East Oakland home. I was there when more than a dozen people learned that they were getting the money they were cheated out of in a rental scam back because of an anonymous donor. And on Friday, I delivered two checks from readers to Elena Sabay, the hotel housekeeper who, as of September, is behind in rent.
I wish benevolence were as contagious as the coronavirus.
“This is the time for big, bold, transformational ideas that change who we are, who we’ve been, for the better,” Bonta said. “This is a moment of change. People are screaming for it. Normal wasn’t working for a lot of folks. We want to be visionary and create a better future.”
“We need to ask those who are more able to bear that burden to do so.”
Assemblyman Rob Bonta, DAlameda