ED NOTE: This diary was originally published September 5, 2012.
Get your Thurston Howell III on!
A Contest, A Hat and A Novel Approach to Disparate Economic Inequality
At some point in the very near future, we’re going to have to address the dangers that unfettered wealth accumulation and concentration pose to our world’s various economic systems, governments, people and yes, even to the planet itself. The Billionaire’s Cap is a novel approach to normalizing the grotesque economic inequality in our present day societies. It celebrates the success of the mega-earners and then frees them from the obligations of further compensation. This then allows others to take their own turn at the helm (or the trough, as it may be) and increases economic mobility for everyone else.
Unlike many revolutions and wars, the Billionaire’s Cap does not require bloodshed or the loss of life. Nor does it foist any new kings, military despots, systems of government or national religions upon people. Rather, it simply recognizes that the world’s largest fortune holders can pose as much of a threat to our democracies, economies and national sovereignties today as the mightiest conquering armies in history did in the past. The Billionaire’s Cap competition neutralizes the threat by keeping only the largest individual fortunes in check. That way, no one person can unduly influence, manipulate or jeopardize the entire system under which we’re all operating. Multi-billionaires simply become single billionaires. Flags and national borders are left undisturbed. Necks are left intact.
Change can be slow. It can take years for the effects of thoughtfully crafted new policies and economic reforms to wind their way through the economy and impact everyone. Conversely, when conditions are allowed to deteriorate in spectacular fashion, the resultant turmoil and violent revolutions can be swift. But a hastily set up solution can have built-in mistakes and long term consequences. The Billionaire’s Cap serves as an economic re-stabilizing device which any nation can implement quickly and safely, regardless of their economic or political system. It is a tool whose beneficial impact could be felt within months instead of years. It can function as an effective first step in any nation’s transition to a more stable domestic (and global) economy.
The Billionaire’s Cap: What Is It?
The premise is simple: amass a billion dollars, claim your prize (your Billionaire’s Cap hat-wear, custom embroidered with your initials) and remove yourself from the payroll. Your jersey is retired with much fanfare and raised to the rafters. You are now ineligible to collect any further income in the future until your net worth falls to a threshold amount TBD (at which point you can resume collecting earnings again until your net worth returns to $1 billion). And of course, you’ve got a billion dollars burning a hole in your pocket and just dying to be spent. Spent in the real economy, the consumer-driven economy.
There are of course several initial stages to complete before the competition is up and running. First on the list would be the process of getting the 99%-ers of the world to encourage their governments to adopt the idea. Once an alliance of nations has begun to form and implement the accord, it would only take the people of the U.S.A. to force their own government to adopt the measure for the program to be a smashing success.
Second, until a plurality of nations adopts the Billionaire’s Cap, some nations might want to pre-emptively discourage multi-billionaires from fleeing by imposing a prohibitive 50% penalty on emigrants whose net worth exceeds $2 billion and barring those individuals from engaging in any future trade, visitation or commercial activities with their former countries should they choose to ex-patriate. Thus, of the only 300 people on the entire planet worth over $2.1 billion for whom this might prove useful, those who would want to renounce their citizenship and make off with half their loot to some country that does not yet participate in the Billionaire’s Cap competition would be free to do so. But they could be barred from re-entering the country, would not have any say in how their penalty would be dispersed by their former country, and their companies would be either prohibited from doing business in that country or subject to tariffs.
The Unbearable Lightness of Billions
Once a country formally adopts the Billionaire’s Cap, its first order of business would be to get all of its billionaires’ net portfolios down to $1 billion. Winning contestants can offload their fortunes any way they choose to, as long as they have pared their net worth down to $1 billion dollars within twelve months of being declared a winner. In that respect, the earliest stage of the competition is going to be very different from the ensuing years because we would just be dealing with the less than twelve hundred individuals worldwide who already are billionaires and multi-billionaires. Whereas all future winners are still working their way towards their first $1 billion, those persons already worth $5, $10 or $40 billion would have an unprecedented opportunity to make many of their friends and family members instant winners as well when they begin doling out their excess billions. As the program expands, the threshold could eventually be adjusted to include those who have netted $1 billion, depending on the upper tier tax rate of that individual’s country over the course of their career.
There will of course also have to be securitization referees in place to monitor possible abuse by multi-national conglomerates, foundations and those individuals trying to hide their funds in offshore accounts and shell companies. And inevitably, there will be a handful of nations who will refuse to adopt the Billionaire’s Cap. We must do our best not to let the U.S be one of them. No, the Billionaire’s Cap should start in America: birthplace of “We the People”, home to a third of the world’s billionaires, and a nation three hundred million strong whose livelihoods, homes, economy, government and environment have been hollowed out by the .01% (one hundredth of one percent) and lawless corporate greed run amuck.
As time goes on, the number of nations not participating in the Billionaire’s Cap could conceivably drop to fifty, then down to one or two dozen. Those desperate countries, some of them small island nations perhaps, some of them strategic outliers, will just be harboring a hundred or so extremely rich ex-patriates who are barred from doing business in Billionaire’s Cap adoptee countries and unable to set foot in their native lands.
A dying breed of exiled tycoons proclaiming loudly to the people of the world, “$1 billion dollars is simply not enough money for any decent person of character to live on, let alone be happy with.” They will raise their indignant and persecuted fists to the sky and rail unceasingly at the heavens until they are hoarse, their bitter tears falling silently to the sparkling diamond-encrusted sands beneath their feet. Allowing us to note, from afar, that apparently $10 or $25 or even $50 billion dollars is not sufficient enough money to achieve one’s happiness either.
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Postscript: Over the coming weeks and months, we’ll be bringing you more Billionaire’s Cap accord columns addressing such issues as: wealth disparity and its effects; how the Billionaire’s Cap accord gets money circulating in the economy again; how to make a billion dollars (you don’t want to miss that one, kids!); how would countries implement the accord/competition; what effects the accord/competition would have on the global economy; how would the Billionaire’s Cap competition affect multi-nationals, foundations, offshore havens, tariffs, treaties, etc.; how to get the US on board; would the Billionaire’s Cap program be able to influence upper-tier tax rates and the creation of a living wage; plus stories, facts, figures, puns, charts, graphs and more! See you then.
cross-posted at lifeismelody.com