Billionaires Are the Symptom, Not the Disease
Addressing systemic corporate power is more critical than merely taxing individual billionaire wealth.
1The Rise of Wealth Taxes
States like Maine, Washington, and Hawaii have enacted billionaire taxes, while California voters consider Proposition 40. This momentum mirrors the Progressive Era, driven by the fact that the 25 wealthiest Americans hold 2% of national wealth. Meanwhile, labor's share of economic output has dropped to 52.8%, the lowest level recorded since 1947.
2Corporate Power as Root Cause
Billionaires are symptoms of a deeper economic dysfunction rooted in corporate power. Since the late 1990s, three-quarters of American industries have become more concentrated. Corporate margins have tripled since 1980, and after-tax profits now exceed 12% of GDP. This concentration costs the typical household approximately $300 every month in lost competition.
3The Shareholder Primacy Doctrine
Since 1970, when Milton Friedman defined profit as the only corporate responsibility, firms have been re-engineered for shareholders. Senior executive pay relies heavily on stock options and buybacks, shifting over a trillion dollars annually away from wages. Before 1982, such buybacks were classified as market manipulation rather than standard corporate strategy.
4Extraction Through Corporate Equity
Fortunes like those of the Walton family or Jeff Bezos are built by suppressing wages and minimizing taxes. Walmart remains a top employer of workers on Medicaid, effectively using taxpayer subsidies to support its payroll. Amazon famously paid no federal income tax on billions in profit while actively opposing warehouse unionization efforts.
5Political Spending as Strategy
Lobbying has become a multibillion-dollar industry where businesses outspend labor groups 34-to-one. Since the 2010 Citizens United ruling, political spending has surged, reaching nearly $16 billion in 2024. Corporations frequently use seven-figure donations to influence policy, ranging from climate regulation rollbacks to securing favorable outcomes in federal merger approvals and legal settlements.
6Limitations of Wealth Taxation
Wealth taxes only address the symptoms by clawing back winnings after they are accumulated. While supporting measures like Proposition 40 is valuable for funding public services, they do not stop the creation of new billionaires. Forbes reported 390 newcomers to the billionaire list this year, proving that the underlying wealth-minting machine remains untouched.
7Alternative Corporate Ownership Models
Redesigning ownership can prevent dynastic wealth extraction by locking equity to a company's purpose. Patagonia moved into a purpose trust in 2022, while Bosch has been foundation-owned for decades. These steward-ownership and employee-ownership models demonstrate that companies can compete effectively without prioritizing shareholder primacy or extracting wealth from their own workforce.
8Restructuring for Future Stability
True reform requires rebuilding labor power, reviving antitrust enforcement, and removing corporate money from politics. History shows that successful confrontations with concentrated wealth, such as the New Deal, focused on restructuring corporate power. The fundamental question remains whether society serves corporations or if corporations exist to serve the needs of society.
Original article: TIME — Billionaires Are the Symptom, Not the Disease