I’m Michael A. Cohen, and this is Truth and Consequences: A no-holds-barred look at the absurdities, hypocrisies, and surreality of American politics. If someone sent you this email - or you are a free subscriber - and you’d like to subscribe: you can sign up here.
Look, I get that rocket ships, by their very nature, look like phalluses, but this is ridiculous.
This photo is of the rocket ship on which Amazon CEO Jeff Bezos blasted into space earlier today.
I’ll be honest in saying that I’m relatively agnostic on billionaires spending their money on vanity projects like commercial space travel. However, what I have a much bigger problem with is this:
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011.
That little tidbit is from a June ProPublica article that chronicles how little America’s wealthiest individuals pay in income taxes.
[From] 2006 to 2018 … Bezos’ wealth increased by $127 billion, according to Forbes, but he reported a total of $6.5 billion in income. The $1.4 billion he paid in personal federal taxes is a massive number — yet it amounts to a 1.1% true tax rate on the rise in his fortune.
Among the uber-wealthy, Bezos is not alone.
According to Forbes, [the 25 wealthiest Americans] saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.
What is most frustrating about these paltry tax bills for the nation’s elite is that, by and large, it’s completely legal. Wealthy CEOs like Bezos pay themselves relatively small salaries and offset their other income such as dividend payments, stock sales, and interest payments with investment losses, expenses, or charitable contributions. The latter is how multi-billionaire Michael Bloomberg keeps his tax rate so low. Another tax loophole is for wealthy Americans to take out massive loans and then deduct the interest on that borrowing from their income taxes. It’s how in both 2016 and 2017, Carl Ichan “paid no federal income taxes despite reporting a total of $544 million in adjusted gross income.”
So even if the Biden administration successfully repeals key elements of the Trump tax cuts, the wealthiest Americans will likely still find some way to game the system. They would almost certainly pay higher taxes, but not nearly as much as they should. To do that, Congress would need to pass a wealth tax or begin taxing unrealized capital gains.
Another tool would be to increase enforcement. Earlier this year, President Biden proposed spending $80 billion to improve the IRS’s enforcement capabilities. Such a move could raise an estimated $700 billion over ten years. That provision was initially included in the bipartisan infrastructure bill, but it’s since been excised after Republican complaints. However, it is likely to find its way into the Democrat’s reconciliation package, which needs only 50 votes (plus Vice President Kamala Harris’s tie-breaking vote to pass in the Senate.
Greater enforcement and higher taxes on the rich are essential, not just from the standpoint of fairness and equity but also because the government is a better public steward of these resources than individuals. I know that for some, this is a controversial notion. For example, Warren Buffett is quoted in the aforementioned ProPublica piece saying that his “money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt.” One of the reasons we have an ever-increasing debt is because wealthy individuals like Buffett don’t pay enough taxes. While Buffett has publicly argued on behalf of paying higher taxes, according to ProPublica, his true tax rate is 0.10%.
But it’s also not the case the private philanthropies or private businesses can put this money to better use than the government. The most efficient health care systems in America are Medicare and the Veterans Administration. There are many shipping services out there, but none of them can match the extraordinary value and efficiency of the post office. And while it’s impressive that Jeff Bezos, and before him Richard Branson built rocket ships that can nearly go into space, NASA did that more than 50 years ago (also, they landed a man on the moon). Also, the government is much better at prioritizing how money is spent: for example, on things like health care, climate change resilience, poverty reduction, public education, and vaccination programs rather than, say, dropping $500 million on a 417-foot superyacht that has its own support yacht with a helipad.
I don’t begrudge the wealthy spending and flaunting their money. I don’t begrudge them making as much as they possibly can. Who among us wouldn’t do the same? What I do begrudge, however, is them hiding behind the tax code to fund their flights of fancy when America has a myriad of problems to solve. Go to space if you want, but first, pay your fair share of taxes.
Vaccine Mandates
I have a big piece coming out soon at MSNBC calling on the US to start moving toward vaccine mandates to get vaccination rates higher. I’ll have more to say on this tomorrow when I send the piece out, but it’s worth reading Max Boot and Matt Yglesias on the topic.
One of the interesting data points in support of vaccine mandates comes from France. Several days ago, French President Emanuel Macron announced that starting August 1, anyone wanting to eat at a restaurant, board a plane, go to a museum, shop at the mall, or see a concert will need to show proof of vaccination. Within three days, more than three million people signed up for online vaccine appointments. As any parent will tell you, negative consequences work!
To my mind, there are two critical rationales for vaccine mandates. The first priority, quite obviously, is to increase the number of people who are vaccinated. The second is to remind Americans about their responsibilities to one another.
Conservatives like to argue that not getting vaccinated is a free choice and a fundamental right for Americans. They’re right. But that choice comes with consequences — for them, their families, friends, co-workers, community, and, indirectly, all of us. Their decision not to get vaccinated hurts those around them, just as the decision not to wear a mask last year did the same — though with far deadlier potential consequences. Apparently, many of the unvaccinated are okay with the negative impact of their actions being dumped on the rest of us — by getting other people sick, forcing the vaccinated to go back to wearing masks (because they won’t), or taking health care resources away from others. Of course, I’m not speaking of those who are immunocompromised or can’t get vaccinated. Instead, I’m addressing the millions of Americans who, either for political reasons or plain stubbornness, refuse to get vaccinated. It’s about time we put the consequences for their decisions back on them.
Far too often in America, we define freedom in terms of the individual and not the collective — and pretend that people’s exercise of free will comes in a vacuum. Practically the entire debate about gun control takes place in this realm.
But as we’ve learned (the hard way) over the past year, this simply isn’t the case. What we do affect others. We have larger civic responsibilities. Defeating a pandemic is not an individual pursuit. It involves all of us doing our part, and that means getting vaccinated. And if you don’t want to do it: fine. You do you. But then accept the consequences of your choice.
Imposing vaccine mandates is about more than just saving lives; it’s also about reminding Americans that freedom is not free.
Musical Interlude
RIP Biz Markie
William Shatner performing Rocketman is quite a thing.
Finally, here’s Richie Havens performing “Freedom.”
Freedom Is Not Free ...
I absolutely begrudge the way our modern day robber barrons have made as much money as they possibly can. Their insatiable greed is a major reason this country is in such dire straights.