Bringing Oligarchs To Heel

Josiah Lippincott writes:

America needs to bring its current crop of oligarchs to heel. That starts with constraining their ability to commandeer their massive personal fortunes to shape policy. Technically, the 501(c)(3) designation prevents political activities by tax-exempt charities. Those rules apply only to political campaigning and lobbying, however. They say nothing about funding legal battles or shaping specific policies indirectly through research and grants. America’s universities, think tanks, and advocacy organizations are nearly universally considered tax-exempt nonprofits. Only a fool would believe they are not political.

One solution to the nonprofit problem to simply get rid of the charitable exemption all together. If there is no loophole, it can’t be exploited by the mega-wealthy. Most Americans’ charitable giving wouldn’t be affected. The average American gives between $2,000 and $3,000 per year. That is well under the $24,800 standard tax deduction for married couples. Ninety percent of taxpayers have no reason to use a line-item deduction. Such a change likely wouldn’t affect wealthy givers either. In 2014, the average high-income American (defined as making more than $200,000 per year or having a million dollars in assets) gave an average of $68,000 to charity, and in 2018 93 percent said their giving had nothing to do with tax breaks.

Eliminating the tax exemption for charitable giving would make it simple to heavily tax the capital gains that drive the wealth of America’s richest one thousand people. One could also leave the exemption in place for most Americans (those with a net worth under $100 million), while making larger gifts, especially those over a billion dollars, taxable at extremely high rates close to 100%. Bill Gates wants to give a billion dollars to his foundation? Great. But he should pay a steep fee to the American people to purchase that kind of power.

There is nothing socialist in these or similar tax proposals. We are not making an abstract commentary on whether having a billion dollars is “moral.” These are simply prudential measures to put the people back in charge of their own country. Reining in billionaires and monopolists is a conservative free market strategy.

Incentives to make more money are generally good. The libertarians are mostly right—people are usually better judges of how to spend and use their resources than the government.

But not always. The libertarian account does not adequately recognize man’s political nature. We need law and order. We need a regime where elections matter and the opinions of the people actually shape policy. Contract law, borders, and taxes are all necessary to human flourishing, but all impede the total and unrestricted movement of labor and money. At the very top of the wealth pyramid, concentrated economic power always turns into political power. An economic policy that doesn’t recognize that fact will create an untouchable class that controls both the market and the regime. There’s nothing freeing about that outcome.

An America governed by Mark Zuckerberg, Bill Gates, Jeff Bezos, and George Soros will be—arguably, already is—a disaster for the middle class and everyday Americans. Cracking down on their “selfless” philanthropy, combined with antitrust enforcement and higher progressive tax rates, is a key way for Americans to leverage the power of the ballot box against the power of the banker’s vault.

About Luke Ford

I've written five books (see Amazon.com). My work has been followed by the New York Times, the Los Angeles Times, and 60 Minutes. I teach Alexander Technique in Beverly Hills (Alexander90210.com).
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