Whiny Billionaire Babies -- Digby

[erronis]

https://digbysblog.net/2025/12/30/whiny-billionaire-babies/

Paul Waldman makes an excellent point about the wealthy whiners who are threatening to leave California if the state passes a 5% wealth tax. (Poor widdle boo-boos…)

The efficacy of wealth taxes compared to other ways of taxing the super-rich is a topic we''ll set aside for another day; for the moment, I want to focus on the predictable but utterly irrational freak-out happening among those who would be subject to such a tax. And it isn't just in California; billionaires are making the same (mostly empty) threats in Seattle and New York as well. But the California measure is the big one, because the tax it would impose are higher and there are so many tech billionaires in the state. The initiative is being pushed by the Service Employees International Union; if it succeeds, 90% of the revenue will go toward health care and the remaining 10% to education. Naturally, the billionaires are up in arms:

Billionaires including Peter Thiel, the tech venture capitalist, and Larry Page, a co-founder of Google, are considering cutting or reducing their ties to California by the end of the year because of a proposed ballot measure that could tax the state's wealthiest residents, according to five people familiar with their thinking.

Mr. Thiel, 58, who owns a home in the Hollywood Hills and operates a personal investment firm from Los Angeles, has explored opening an office for that firm, Thiel Capital, in another state and spending more time outside California, three of the people said.

Let's consider Larry Page, who is less of a public person than some of his peers. Page is currently worth $257 billion, making him the second-wealthiest person on Earth after Elon Musk. That means that as of today, 5% of Page's wealth is a little under $13 billion.

Which is a lot of money - you could fund the salaries of a couple hundred thousand home health aides with just what this one guy would have to pay. But it's not a lot of money to Larry Page. In fact, he regularly loses or gains that much money in a matter of days, and it has zero effect on anything he chooses to do or how he chooses to live.

That's because the vast majority of his wealth, like that of almost all the super-rich, is held in stocks, which go up and down. An illustration: This April, Donald Trump unveiled a ludicrous set of tariffs on what he called "Liberation Day," and over the next two days, the S&P 500 lost 10% of its value. But I didn't see billionaires saying they were going to take all their money and put it in some other country's stock market, let alone pick up and leave the place they live. They knew that things would probably turn around, and they did.

They certainly did for Larry Page. About half of his wealth is in shares of Alphabet, Google's parent company. Just three years ago, his Alphabet holdings were worth one-third of the $122 billion those shares are worth today.

They lose 5% of their wealth all the time and don't have temper tantrums over it. It's couch cushion money for people like him. So why does the idea of a tax turn them into chicken littles running around screaming "the sky is falling?"

I suspect it's just another chance for them to paint themselves as victims as virtually every rich person somehow feels the need to do these days. These Techbros, who are actually even worse than other rich people, are not only the most arrogant people on the planet, they also feel that they're treated very unfairly by the plebes who should be worshiping them. They believe they got their billions because they are superior people who work harder and deserve to keep every last penny to do with as they choose - and nobody gives them any credit for it.

. . .

[UpInArms]

1. Since their money serves no one but themselves,

Go the fuck away

If you think a state should shelter your nasty hoarding, you are a parasite

[dweller]

2. Read today

Washington state is considering the same thing - tax on billionaires



✌🏻

[lapfog_1]

3. I'll provide one counter argument

to the idea of a wealth tax.

First, this isn't an income tax... which is good because a billionaire doesn't really need regular income. In fact, they can almost completely avoid income tax by simply borrowing money from a bank using their considerable assets as collateral for the loan. They pay a modest amount of interest on the money they borrow... and, when the loan comes due, simply roll it over into a new loan. No income. No capital gains. Nada.

So... the thought is to impose a wealth tax, especially on those stocks they own. However, to turn that into cash that the government would be able to spend, that would entail the sale of said stock. Any sale of that size ( even if stretched over a period of time ), especially by a major shareholder or founder, would tend to move the entire market lower ( especially in those tech stocks ). That probably would trigger some more massive sales by institutional investments as well ( no one wants to be left "holding the bag" )... thus possibly causing a significant downturn in the market.

Now, we may already be headed for a market "correction"... this wealth tax could accelerate it and make the market downturn even worse. The "magnificent 7" are already the only thing holding up wall street, and some would say the entire economy. Trump's trade policies may well cause a depression similar to 1930s ( which was proceeded by a stock market crash ). Part of what made the depression even worse was the tariff policies of the USA. Trump is trying to gain control of the Fed and have it set interest rates lower... to avoid the depression from his own trade policies.

What Trump cannot control is the bond market. If that craters then we can kiss the economy goodbye, possibly for 10 years or more, in a second great depression.

This wealth tax might well be the match that lights a stick of dynamite on the whole thing. For those of you so angry that "fuck it, burn it all down" seems reasonable... remember that the wealthy always do well in a downturn as the poor and middle class ( what is left of us ) will sell any assets we own for pennies on the dollar to get money for food and energy and housing.

Yes we need to tax billionaires... but let's find a different way to do it. I would propose a luxury tax... a tax on any goods ( other than real estate ) worth more than, say, 100,000 USD... Let the billionaires keep their money, but tax the next airplane they buy or yacht they commission. Maybe on any real estate transaction of over $2M. Something like that. Sure, they can avoid the tax just by not purchasing anything... but what fun is that for them... Bezos just spent like $25M for a wedding. Adding a 1or 2 percent luxury goods tax won't phase them. Needs to be a nation wide tax, not state by state.

[erronis]

4. Interesting arguments, proposals.

Since I don't have two benjamins to run together, I am not qualified to comment. But.

Could a wealth tax based on paper assets (bonds, stock, etc.) be made in the same paper? A US Treasury holding company that now owns those shares and benefits (and loses) based on the holdings? That would mean that the total capitalization wouldn't change as far as the markets are concerned.

A luxury tax has been proposed (and perhaps enacted) a few times. I don't know where it stands now in various countries. If I were a filthy-rich person I'd never buy anything in my own name. It would all be business purchases with business rationale and depreciation, etc.

Bezos's wedding could become a blockbuster film enterprise, not caring about making any profit. Think "The Producers."