(SeaPRwire) – By: Adrian Kingsley
California voters face Proposition 40 this November. A one-time 5% wealth tax on the net worth of the state’s billionaires, union-backed. Bernie Sanders and Ro Khanna have a federal version. A dozen states advanced millionaire or billionaire taxes this year. Maine, Washington, Hawaii, and Rhode Island already enacted one. The anger is justified. The arithmetic is brutal. The 25 wealthiest Americans pay a true tax rate of just 3.4%. Nurses and teachers pay more. That top group holds about 2% of the nation’s wealth, nearly as much as the entire bottom half of the country combined. Forbes counted a record 3,428 billionaires this spring, worth $20.1 trillion, up $4 trillion in a year. Elon Musk topped the list at $839 billion and became history’s first trillionaire this summer. Workers’ share of economic output fell to 52.8%, the lowest since records began in 1947. Billionaire wealth at an all-time high while labor takes home an all-time low. The contrast is obscene. The tax is aimed at the wrong target.
Respect the policy facts, then track what a wealth tax actually changes. It claws back winnings after the fact. It does not touch the machinery that mints new billionaires. This year’s Forbes list added 390 newcomers. Musk, Bezos, and their peers are photographs on the wall. The camera is corporate power. Since the late 1990s, three-quarters of American industries have grown more concentrated. Corporate margins have roughly tripled since 1980. After-tax profits sat below 10% of GDP for virtually all of 1950 to 2010. Now they exceed 12%, near the record. Thomas Philippon calculates that weakened competition costs the typical household about $300 a month. Profit is simply what remains after wages are held down, taxes minimized, and costs pushed onto workers, communities, and the environment. The richest tenth of Americans own nearly 90% of household stock-market wealth. Every dollar shifted from paychecks to profit flows almost undiluted to the top. That is the actual loophole. Equity.
The corporate structure producing this was deliberately built. Milton Friedman declared in 1970 that a corporation’s only social responsibility is profit. Executive pay became a river of stock options and buybacks. Buybacks now send over a trillion dollars a year to shareholders instead of wages or investment. Before 1982, the practice was treated as market manipulation. Union membership fell from 20% of American workers to 10%. Antitrust enforcement went quiet. Look at the fortunes themselves. A federal watchdog found Walmart among the biggest employers of workers on Medicaid and food stamps. Taxpayers subsidize the payroll beneath the Walton dynasty. Amazon paid no federal income tax on billions in profit while Bezos’s wealth compounded and warehouse union drives were fought. Political spending became the highest-return investment a large company can make. Lewis Powell’s 1971 memo put business on a political war footing. Lobbying is now a multibillion-dollar industry, with business outspending labor and public-interest groups 34-to-one. Citizens United removed the last meaningful limits in 2010. The 2024 election cost nearly $16 billion, mostly corporate money. Under President Donald Trump, the exchange turned brazen. Corporations handed seven-figure donations to his inaugural fund. Oil executives were asked point-blank for $1 billion at a Mar-a-Lago dinner and watched climate rules fall. Paramount paid $16 million to settle a lawsuit legal experts dismissed while its merger awaited federal approval. The crypto industry spent more than $130 million on the 2024 races, saw enforcement cases evaporate, and is now pouring hundreds of millions into the 2026 midterms. This is not a side effect. It is the operating system.
Vote for Proposition 40. Pass the state and federal versions. Let the revenue fund healthcare and schools. But understand the limit. The shareholder-primacy corporation is a policy choice. It was built through lobbying and lawmaking since the 1970s. It can be unmade. Early American corporate charters were granted for limited public purposes and could be revoked when abused. That tradition is recoverable. Ownership itself can be redesigned. I have studied companies deliberately structured so that no one can extract a dynastic fortune because the equity is legally locked to purpose. Patagonia’s founder moved the company into a purpose trust in 2022, making extraction impossible by design. Bosch has been majority-owned by a foundation for decades and still competes ferociously. Steward ownership, employee ownership, and benefit corporations already operate in thousands of companies around the world. They attack wealth concentration at its source. The wealth-tax debate asks how to redistribute the gains that flowed from corporate power. That is the wrong question. Redistribute the power itself. Taxing billionaires is acceptable. Letting the machine keep minting them is the real failure.
Author bio: Adrian Kingsley, an internationally renowned scholar who has long studied public administration and social policy, and a visiting chair in political economy at a European university consortium.