Dear Billionaires, The Best Thing You Can Do For This Country Is To Employ Your Capital Productively

From Anthony Gill

On June 24, 2019, nineteen billionaires released a letter to the media entitled “A Call to Action: A Letter in Support of a Wealth Tax.”  They urged potential presidential candidates to campaign for and, if elected, implement a new wealth tax that would strengthen America.  I hereby offer my own letter in response.

Dear Billionaires,

Thank you for your patriotic concern about our nation’s democracy and the global climate.  The willingness shown to submit yourselves to higher tax rates warms my heart as we approach the season in which we celebrate US Independence from Britain, brought about mostly over a concern about arbitrary taxation without adequate representation.

....  After just a few minutes on the Internet, I discovered that the US Treasury accepts voluntary gift donations to reduce debt held by the public.  The link can be found here, with more explicit instructions on who to make the check out to and where to send it here.  You don’t have to wait for all that pesky legislative debate and cumbersome bureaucracy to start making a difference immediately.  Even better, this proposal avoids the reems of paperwork needed for the typical tax filing and won’t require you to contact your accountant.

Simply calculate what you consider to be your fair share, write the check, and drop it in the mail.  Your honorable wishes realized, instantaneously! Better yet, you can do this every year.

I know Mr. Gill is mocking the billionaire's proposal to force all of us to pay more taxes so that they can as well, but here is my alternative response:

Dear Billionaires,

I appreciate your patriotic desire to make  "smart investments in our future, like clean energy innovation to mitigate climate change, universal childcare, student loan debt relief, infrastructure modernization," etc.  However, I beg you, the best possible way you can employ your capital to achieve these goals is to keep it and deploy it yourself.  Why?

  • You will naturally pay a lot more attention to how your own money is spent and how productively it is employed than any group of government bureaucrats ever can or will.  The government wastes orders of magnitude more every year than any of you could ever pump into its coffers
  • I presume many of you are billionaires because have creatively solved a problem or added new capabilities to the world, and have been paid handsomely by consumers for these contributions.   Keep it up!  I give you a far better chance to productively employ these resources, whether it be in new commercial ventures or in a non-profit to solve some particular problem, than I do some random assistant associate deputy director buried in the Department of Energy.
  • If you inherited it all and don't feel particularly competent in your own acumen, then put it into the S&P500 or the Russell 2000.  Even without knowing a thing about business, you can trust our markets to productively employ your capital and create value and jobs with it.
  • If you want to solve a problem via the non-profit route, go for it -- with your direct, passionate oversight, your money will almost certainly achieve more than if it were dumped into the Treasury.  Concerned about student loan debt relief?  Use your money to payoff the debt of worthy recipients, or better yet, go after the root cause and use your money to found educational institutions that don't cost $50,000 a year.  As I have pointed out before, rich people in the 19th century founded colleges all the time, but I can hardly think of one established in the last century. [I pick this as an example because if I were a billionaire, I would found a new model online/offline college with no intercollegiate athletics, no grad school, and no research establishment that provides a $5-$10K a year high quality degree to students chosen purely on testing and high school grades.  I would hire Bryan Caplan as a consultant and we would base the whole intellectual culture around understanding issues from all sides and his ideological Turing test].

What training I have in economics leans towards the Austrians.  An economy is growing and prosperous when its resources -- talented people, capital, etc -- are employed in the most productive ways.  Anything that diverts these resources from their most productive employment makes the nation and everyone in it poorer.  Which is exactly what will happen with every extra dollar you mail in to the government and every dollar your lobbying causes the government to coerce out of the rest of us.

Please, do not assuage whatever guilt you may have saddled yourself with (not guilt from me, as I have nothing but admiration for your accomplishments) by lobbying the government to tax me more.