Nick Hanauer: “Tax the Rich” Like Me and Expand the Economy.
Nick Hanauer was an early investor in Amazon.com and founded gear.com. He is wealthy, as he states in a memo to his fellow zillionaires in a Politico op-ed article in 2014:
Memo: From Nick Hanauer
To: My Fellow Zillionaires
You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc.
The Pitchforks Are Coming… For Us Plutocrats By NICK HANAUER July/August 2014
Unlike his fellow zillionaires, Hanauer is deeply concerned about the New Gilded Age. From the memo above in 2014:
The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.
And it’s gotten worse since 2014, as we know.
He wrote an article in the American Prospect calling for increased taxes on the truly wealthy — not for fairness reasons (or not only) — but because it is essential for economic growth. It’s a long article and he eviscerates the Republican tax cut arguments in it.
I will excerpt just a small part to highlight his overarching theme:
That’s why if Democrats want to take back Congress—and hold it—they must do more than just attack trickle-down economics; they need to replace it with an alternative theory of economic growth that places the American people back at the center of the American economy. Democrats can’t just run against the Trump/Ryan tax cuts; they need to run for substantially raising taxes on me and my wealthy friends—not on the grounds that it’s more fair (or because of “The Deficit!”), but on the sound, if radical-sounding, economic principle that taxing the rich is the only plan that would increase investment, boost productivity, grow the economy, and create more and better jobs.
Taxing the Rich is Sound Economics and Effective Politics
Now, I know what you’re thinking: That’s crazy talk! For decades, rich guys like me have been selling you tax cuts on the merits of pure economic stimulus. The rich are “job creators,” we’ve told you. The more money and incentives we wealthy few have to invest in creating jobs, the better the economy is for everybody—especially you. And you bought it. Even many of you Democrats. Even when you fight for fairer taxes, some Democrats and their economic advisers still believe that there is always a trade-off between fairness and growth.
As a venture capitalist and serial entrepreneur who’s made a personal fortune founding or funding more than 30 companies, I can tell you firsthand that this classic trickle-down narrative represents more than just a fundamental misunderstanding of how market capitalism works; it is in fact a con job and a threat—an intimidation tactic posing as a theory of growth. The con works like this: If we can get you to believe these three things—that if you raise taxes on the rich, we’ll refuse to invest; that if you regulate corporations, they’ll be less competitive; and that if you raise the minimum wage, we’ll hire fewer workers—then you will accede, to some degree or another, to a 1 percent–enriching trickle-down agenda of tax cuts for the wealthy, deregulation of the powerful, and wage suppression for everyone else. Yet despite these claims, what you’ll never get from trickle-down is faster growth and better jobs. Because economic growth doesn’t come from making the rich richer; it comes from making the middle class and working people generally stronger.
To be clear: There is simply no empirical evidence or plausible economic mechanism to support the claim that cutting top tax rates spurs economic growth. Zero. Zilch. Nada.
The truth is, no amount of luxury spending can make up for the buying power of the great American middle class—a middle class whose size and strength we have been eroding year after year. So then, how do we get money flowing back through the economy again in the face of such unprecedented hoarding due to Gilded Age–level concentrations of wealth? How do we deliver the good jobs and good wages American workers desperately need?
Raise taxes on the rich. Really.
Tax and Spend
Raise taxes on the rich, and almost anything the federal government does with the revenue will pump more money through the economy than what the wealthy are doing with their hoarded cash today. Tax the rich to put money back in the hands of the American people through middle-class tax cuts, and corporations will expand production and payrolls to meet the resulting spike in consumer demand. Tax the rich to invest in roads, transit, bridges, health care, schools, and basic research, and we will create millions of good-paying jobs while building the physical and human infrastructure on which our collective prosperity relies.
American Prospect: Want to Expand the Economy? Tax the Rich!
TAX THE RICH!!!!!
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