A new report from Swiss bank UBS will likely infuriate New York City Mayor-elect Zohran Mamdani and other progressives. The financial institution found that not only is the world seeing a record number of billionaires, but also global billionaire wealth is at an all-time high. Send in the tax collectors! Oh, wait. They are already here.
The More Billionaires the Better
Today, the global billionaire population is 2,919, with $15.8 trillion in wealth, according to the bank’s 11th Billionaire Ambitions Report. The United States is home to 924 ultra-wealthy individuals, followed by China (470), India (188), Germany (156), and the United Kingdom (91).
The top driver was appreciation in wealth, including cash, securities, corporate interests, residential property, and other assets. But another factor will likely fuel our society of envy: inheritance. Ninety-one people became billionaires after receiving approximately $298 billion. Researchers say this will persist in the years to come, as billionaire children will inherit almost $6 trillion.
“In a highly uncertain time for geopolitics and economics, entrepreneurs are innovating at scale across a range of sectors and markets,” said UBS Global Wealth Management executive Benjamin Cavalli in a statement. “They’re creating wealth as they do so.”
While reactions to the report’s findings have been muted, the analysis undoubtedly triggers a wide array of discussions, from wealth taxes to income inequality. But the primary response should be one word: Great!
Hitting the Marx
This past summer, democratic socialist Mamdani told NBC News’ Meet the Press that the United States should eradicate billionaires, echoing the sentiment of so many others who share his philosophy.
“I don’t think that we should have billionaires because, frankly, it is so much money in a moment of such inequality, and ultimately, what we need more of is equality across our city and across our state and across our country,” Mamdani said. “And I look forward to working with everyone, including billionaires, to make a city that is fair for all of them.”
The idea of not having any billionaires at all is odious and laughable. Just from a fiscal perspective, when the affluent pay far more than their fair share and governments are running budget deficits despite record revenue, America and the rest of the world need billionaires to stay alive.
It also sparks a moral conversation as many parrot the notion that billionaire wealth is iniquitous. Why is it the business of politicians and bureaucrats to place a cap on how much an individual can earn in his or her lifetime? Yes, there can be a discussion on whether taxpayers should subsidize certain things, such as bailouts for automakers or support for failed banks. Still, the overall argument that billionaires should not exist is wicked.
There is a common misconception that billionaires behave like Ebeneezer Scrooge, sitting at a desk counting their coins all day. Yes, Jeff Bezos will use his fortune to purchase super yachts, but he also invests in dozens of companies, which then hire people and use resources gathered by others. It is this wealth creation that expands the pie, making everyone richer.
Radical leftists will then try to meet halfway through the middle – the middle being just right of Sen. Bernie Sanders (I-VT) and Sen. Elizabeth Warren (D-MA) – by championing an estate tax. This, too, is a spurious proposal that falls flat on its face at both the economic and societal levels.
First, inheritance taxes would penalize savers and investors, the fabric of a market economy that relies on this capital to fund factories, expand business operations, or extend loans to mom-and-pop shops. Second, legendary economist Milton Friedman had it right when he contended that we are a family society, no matter how individualistic the nation is described. In other words, if Washington confiscates wealth, then what would stop a billionaire from blowing it all before he or she dies?
Yes, there is income inequality, but there will always be wealth differences in a free society and a socialist nation. Does anyone believe communist leaders would suffer under a Marxist regime? While the Chinese peasants ate tree bark and wildlife, Mao Zedong feasted on fish and fatty pork. Josef Stalin presided over opulent Kremlin banquets; the rest of the country was deprived of the bare necessities. We even saw this during the coronavirus pandemic: Politicians dined at luxury restaurants and imbibed expensive ice cream, and Americans were stuck at home.
Ultimately, the power to tax is also the power to destroy.
Blame the State
Legendary economist Thomas Sowell wrote in The Quest for Cosmic Justice, “Envy was once considered to be one of the seven deadly sins before it became one of the most admired virtues under its new name, ‘social justice.’” Progressives will argue, however, that hospitals are underfunded and the rent is too damn high. But they would be better served to pin the blame for these conditions on the state rather than the 1%. What entity delivered 20% inflation in four years? What institution eviscerated America’s purchasing power? What Leviathan punished labor?
The billionaires build; the bureaucrats bulldoze.
