Billionaires and a Burning Planet: A Package Deal

It’s terrifying to watch Senator Joe Manchin shoulder the efforts of congressional Democrats to counter climate change with fossil fuel giveaways, and then watch Kyrsten Sinema hold Machin’s watered-down legislation hostage until a provision that one gaping loophole in tax legislation in favor of private equity billionaires has been removed. We all know that time is running out: we’ll likely see a Republican takeover in the House and maybe even the Senate in November, shattering any hope of bolder climate action for at least another two years, probably longer.

The clock is ticking. Even according to the most optimistic estimate, the last sands of the climate change hourglass will pass in 2035. If greenhouse gas emissions are not reduced to less than half of current levels by then, large parts of our planet could become uninhabitable.

This year, 2035, we could also see the first trillionaire. Two years ago, United States today reported on the prospect of Amazon founder Jeff Bezos reaching this obscene level of wealth in 2026. We probably won’t see the first trillionaire any time soon, but it won’t be long after that. It took 38 years for America’s greatest stash of wealth to multiply by a hundredfold, from Daniel Ludwig’s $2 billion fortune in 1982 to Jeff Bezo’s $200 billion fortune in 2020. That’s a compound annual rate of increase of nearly 13 percent , which corresponds to the arrival of our first trillionaire somewhere around 2033.

If these trendlines continue, we will watch our last chance to save our climate slip away as we see the birth of the trillionaire class. And it’s no coincidence.

These two milestones are inseparable, both driven by the reality of American politicians confronting the demands of our billionaire class. The billionaires’ compulsion to amass ever-larger fortunes drives them to frustrate any effort to increase the taxes they pay. Starved of the revenue needed to fund meaningful climate protection programs, policymakers have continued to get the proverbial can on the road.

in the Davos man, Peter S. Goodman documents the ruler of the billionaire class, which he collectively calls the “Davos Man”, on policy-making in America and, more broadly, on the industrialized world. Gutman explains:

“For the past four decades, it has been common for Davos Man to use its money to buy influence in the political sphere and create rules that allow billionaires to keep more of their earnings. It was like private equity kings [Steven] Schwarzman is robbing the healthcare system and Amazon is using its market power to crush competitors while exploiting workers.”

Amazon founder Jeff Bezos
Amazon founder Jeff Bezos is pictured.
Michael M Santiago/Getty Images

Once elected, Joe Biden, the moderate alternative in the 2020 primary to enemies of the billionaire class like Bernie Sanders and Elizabeth Warren, seemed surprisingly willing to deviate from the norm of politicians bowing to the billionaire class. In his original “Build Back Better” proposal, Biden called for trillions in additional spending, including ambitious public investment in renewable energy, energy efficiency and other climate policies. A significant portion of his proposed spending package would be funded by additional taxes on corporations and the billionaire class.

But after the dust settled on budget negotiations in 2021, no new taxes for billionaires were enacted and none of the tax subsidies for the fossil fuel industry were scrapped. The climate protection measures contained in the so-called bipartisan infrastructure package paled in comparison to what Biden originally proposed, and that paled in comparison to what was really needed. The billionaire class had found the Democrats they needed, Kyrsten Sinema and Joe Manchin, to kill Biden’s tax plan and water down the climate provisions of his infrastructure plan.

Finally, after months of hesitation, Manchin agreed to support the modified Reconciliation Bill, which appears to be on the way to becoming law. The legislation includes modest climate spending coupled with the expansion of federal oil and gas leases. Worse, a “side deal” between Manchin and the Democratic leadership opens the door to further expansion of damaging fossil-fuel infrastructure such as pipelines and export terminals, potentially undermining any emission-reduction gains from the Reconciliation Act. Facing the urgent need to force fossil fuel industries to shoulder the cost of greenhouse gas emissions, Democrats caved to money interests and handed out additional subsidies instead.

In addition, much more could have been done to address climate change if the bill had included tax increases for the wealthy. But given the tremendous growth in billionaire wealth and the fact that the planet is heading towards a climate catastrophe, billionaires have been unaffected. At Kyrsten Sinema’s urging, even a lenient provision that would have slightly narrowed the morally untenable loophole called carried interest, which allows private equity billionaires to pay taxes at a greatly reduced rate, was scrapped from the law. Billionaires may not have full leverage over every politician, but they always have enough clout to avoid raising taxes, and sometimes enough to lower them.

It’s no coincidence that America’s first trillionaire emerges around the same time as the last hope of averting climate catastrophe is fading. To borrow Goodman’s term, Davos Man advances these two outcomes. The billionaire class’ thirst for additional wealth has prevented and prevented us from making the changes needed to seriously tackle extreme wealth, whether it be through a wealth tax, a mark-to-market capital gains tax, or more ambitious inheritance taxes from scaling clean energy programs or forcing the fossil fuel industry to bear the cost of their emissions. For the ultra-rich, the show must go on even if it makes college education unaffordable, even if it makes health care unaffordable and, yes, even if it makes the planet uninhabitable.

Bob Lord is an Associate Fellow at the Institute for Policy Studies and Senior Tax Policy Advisor to Patriotic Millionaires.

Basav Sen is Director of Climate Policy at the Institute for Policy Studies.

The views expressed in this article are the authors’ own. Billionaires and a Burning Planet: A Package Deal

Rick Schindler

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