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The super-rich

Time for a new tax on all those billions?

“The world is enthralled with billionaires,” says Farhad Manjoo in The New York Times. In the past month we’ve goggled as the world’s richest man, Jeff Bezos, bought a 417ft “superyacht” and a support vessel just to “park the helicopter”. We oohed as Elon Musk tested a rocket that might one day travel to Mars, then gave “a charming turn as the host of Saturday Night Live”. And we’re lapping up the details of Bill and Melinda Gates’s divorce. In the heady days before Covid-19, there had been talk of reining in the billionaires, but government incompetence during the pandemic made them “look like our saviours”. Bezos kept delivering to us, Gates looked after public health and Musk made shiny climate-friendly cars. Billionaires’ collective wealth increased by $5 trillion to $13 trillion in 2020. Now they’re untouchable. “God help us.”

It might have to be God, because it seems the mega-rich won’t, says Henry Mance in the Financial Times. Since 2010 more than 200 of them have signed the Giving Pledge, committing to donate most of their cash in their lifetimes. Yet the same billionaires keep getting wealthier. “Did they sign the pledge just to stop [Warren] Buffett nagging them?” At least MacKenzie Scott, Bezos’s ex-wife, is trying. She gave away $4bn in the second half of 2020 – but the pandemic surge saw her Amazon shares grow by $25bn over the same period. There is one shining example of “wealth un-creation”: Chuck Feeney, who co-founded Duty Free Shoppers Group, recently finished giving away nearly all his $8bn fortune. Notably frugal, he owned one car (a second-hand Jag), flew economy and kept just $2m for his and his wife’s retirement. But if billionaire philanthropy fails, here’s an idea: “We could start taxing them.”

We could and we should, says Simon Jenkins in The Guardian. Few of today’s billionaires heed Andrew Carnegie’s maxim that “the man who dies rich dies disgraced”. But it’s tricky. The businesses of the richest operate “virtually tax-free” thanks to countries like the UK, which are “cynically indulgent towards tax avoidance”. Tax havens deny governments revenues of about $250bn a year. Meanwhile, the rest of us are overtaxed by bone-headed levies such as council tax and VAT. The answer is a surtax – Argentina has imposed an emergency one on its 12,000 richest citizens, so what’s stopping us? When a few individuals “are seen to gain so grotesquely at the expense of others, something is wrong”.

Winners in the global wealth race

The pandemic turbocharged the world’s billionaires, says Ruchir Sharma in the FT. Their number rose by nearly 700 in the last year, to more than 2,700 – mostly in China, where a new billionaire was minted every 36 hours. Top gainer over the past 12 months was Tesla’s founder, Elon Musk, whose fortune swelled from $25bn to $150bn. “Good” billionaires – those whose fortunes rely on technology and manufacturing, rather than oil and real estate – did particularly well.

Billionaire wealth as a proportion of national GDP rose only slightly in the UK, to 7%, but in the US it ballooned to nearly 20%. Surprisingly, Sweden topped the list, with its 41 billionaires accounting for nearly 30% of the nation’s GDP. But Swedes admire their billionaires – when the founder of Ikea, Ingvar Kamprad, died in 2018, one newspaper wrote that, short of the king and Bjorn Borg, “it would be hard to name a more popular Swede”.