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Do you think Larry Ellison might be able to pay a tax on his unproductive wealth?

NFL Tax FreeI have written many times about the wealth tax.  A wealth tax designed to tax wealth selectively based on productivity has the extra advantage of increasing the use of capital to stimulate jobs.  Put another way … money invested in gold coins, yachts, art, real estate, government bonds or cash can be taxed without limiting the incentive to put money into businesses that make more money … especially businesses that invest in the US.

Another way of looking at wealth tax is by asking how much wealth can you have before it becomes very, very hard to find places to spend your lucre?  Surprisingly Forbes has published an article that estimates the value of increasing wealthSome excerpts with comment in italics.

50 percent of America’s households actually have less than $81,200. wealth. The other half would have more. At the median you can not buy much because you are paying of the house, the car, the kids’ school …  At $1.3 million (you) now hold 16 times more wealth than the typical American. You probably have paid off your mortgage. You have a healthy balance in your 401(k). You have investment income. You have it made.  You can BUY stuff.

At $5.2 million you now sit comfortably within the ranks of America’s richest 1 percent. You can afford, well, just about anything you want. A getaway in the mountains, another getaway on the shore. Two beemers in the driveway. Impressive philanthropic gestures. Direct access to your US senators. You can BUY expensive stuff.

But you are not really “rich.”  Yes, you can fly first class anywhere you want.  But you have to fly with the great unwashed back in coach — and they take forever getting their carry-ons up in those overhead bins. To do better you need  to multiply your $5.2 million fortune 1,000 times over — to $5.2 billion. Now you can buy your own private jet.  You can even invest in the NFL … a tax free organization that coins money!

Of course at that level you probably pay very little taxes.  Why pay taxes when you can deduct depreciation on your investment in a football team?

Think about another ten-fold increase: Larry Ellison is the third-ranking deep pocket on this year’s Forbes list.  Ellison just stepped down as the CEO of the Oracle business software colossus.  His net worth: $50 billion.

What does Ellison do with all those billions? He collects homes and estates, for starters, with 15 or so scattered all around the world.  Ellison likes yachts, too. He currently has two extremely big ones, each over half as long as a football field.

Ellison also likes to play basketball, even on his yachts.  If a ball bounces over the railing, no problem. Ellison has a powerboat following his yacht, the Wall Street Journal noted this past spring, “to retrieve balls that go overboard.”

READ MORE ABOUT THE VERY WEALTHY AT FORBES

 


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