Column: These 63 billionaires supported Trump, showing the necessity of a wealth tax
If there’s a single all-encompassing truism about American politics, it’s that investing in the right candidate can pay a handsome dividend.
That’s certainly validated by the experience of the scores of American billionaires who helped bankroll Donald Trump’s last presidential campaign.
Many own fortunes based on the real estate, private equity, or oil and gas industries, all of which did exceptionally well as a result of Trump’s tax cuts and deregulatory policies.
We need a better campaign finance system that breaks the nexus between big money and influence.
— Chuck Collins, Institute for Policy Studies
Among the biggest contributors to the Trump Victory Fund in 2019-20, according to a compilation of Federal Election Commission data by the Institute for Policy Studies, a progressive think tank, are gas pipeline magnate Kelcy Lee Warren ($2.25 million); casino owners Steve Wynn ($1.5 million), Philip Ruffin ($1.38 million) and the late Sheldon Adelson ($1.16 million); and oil developers Jeffrey D. Hildebrand ($955,000) and Harold Hamm ($300,000).
The billionaire contributors to the Victory Fund, a political action committee affiliated with the candidate’s reelection campaign committee, may have merely been showing their gratitude for Trump’s service to them over the last four years. Or they may have been hoping to make an investment in the future — that is, four more years of Trumpian handouts to corporations and the affluent.
Altogether, 63 Americans with net worth of $1 billion or more — $243.7 billion total in wealth — contributed $33.3 million to the Trump Victory Fund. This group comprised about one-quarter of 1% of the fund’s nearly 26,000 individual contributors, but their donations came to 10% of the fund’s overall haul of $366 million in 2019-20.
This record forces upon us a few important observations.
One: Economic inequality in the U.S. has reached grotesque levels. As former Labor Secretary Robert Reich observes, the increase in wealth concentration in America didn’t even pause for COVID-19. “America’s billionaires could give everybody in the country a $3,000 stimulus check,” he tweeted Thursday from his perch on the faculty of UC Berkeley, “and still be richer than they were before the pandemic.”
Two: America’s private funding of elections has grossly skewed government policy to serve the rich at the expense of the middle and working class.
“It’s not surprising that this is a group that uses its power and influence,” says Chuck Collins, a senior scholar at the institute and coauthor of its analysis of the billionaire contributions. “We need a better campaign finance system that breaks the nexus between big money and influence.”
Three: Having obtained what they wanted from Trump, these donors have been almost entirely silent about his role in the Jan. 6 insurrection, including his wholesaling of the lie that victory in the November election was stolen from him.
Money manager Stephen A. Schwarzman, a long-term Trump supporter with a net worth estimated by Forbes at $20.9 billion, touched gingerly on the relationship between Trump’s words and the outcome in a statement issued that day through Blackstone Group, his firm.
“The insurrection that followed the president’s remarks today is appalling and an affront to the democratic values we hold dear as Americans,” Schwarzman said. He reiterated a statement he made in November, asserting, “the outcome of the election is very clear and there must be a peaceful transition of power.” Schwarzman contributed $355,000 to the Victory Fund.
Schwarzman stopped short of demanding that Trump take the step that many political experts say would be crucial in quelling post-election violence by his supporters — explicitly conceding to President-elect Joe Biden.
Charles Schwab Corp., the big discount brokerage, has shut down its political action committee and condemned the violence of Jan. 6.
Underscoring income inequality, America’s billionaires are already done paying their Social Security taxes for 2021.
But it hasn’t spoken for its founder and chairman, Charles Schwab (net worth: about $10 billion), a major supporter of Trump and other Republicans, though not to the Trump Victory Fund. Schwab the individual hasn’t said anything in public about Trump’s post-election behavior.
This won’t do. Trump’s inciting of the Jan. 6 riot demands a full-throated condemnation by these very people who reaped the largest benefits from his policies over four years. Mealy-mouthed exhortations to nonviolence fall far short of what’s needed at this moment.
That’s especially true since some of the charging documents federal prosecutors have filed against accused participants in the Jan. 6 insurrection suggest that the nation miraculously avoided an absolute bloodbath that day. “Strong evidence ... supports that the intent of the Capitol rioters was to capture and assassinate elected officials,” according to a filing in one case.
We should pause here to acknowledge Ken Langone, a co-founder of Home Depot and long-term supporter of Trump, who actually tied Trump directly to Jan. 6.
“I think the biggest mistake anybody is going to make is try and rationalize what happened last week, what the president did and what that crowd did,” Langone told CNBC on Wednesday, the day of Trump’s second impeachment. “There should be no mitigation at all. It was horrible. It was wrong. I’m shocked.”
Langone said he was throwing his support to Biden: “I’m going to do everything I can from Day One to make sure I do my part to make Joe Biden the most successful president in the history of this country,” he said.
The conditions of economic inequality and the eagerness with which the rich press their advantages in the political system underscore the need for a wealth tax in the U.S.
Proposals for such a levy advanced by Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) at the inception of their presidential campaigns in 2019 were buried under technical cavils about whether they were constitutional or how much money they’d actually raise. As I wrote then, these concerns were just sideshows.
The point is that America’s wealth disparity has been corroding social and democratic principles, fomenting “racial and religious discrimination, antipathy toward immigrants, [and] lack of generosity toward the poor,” as economist Benjamin Friedman wrote in 2009.
The spectacle of so much wealth in the hands of people who can’t use it productively, while the majority of Americans struggle to make ends meet on working-class wages, is profoundly unhealthy.
Why is economic inequality growing in America? Blame the lack of tax enforcement.
Obviously Trump and his Republican fellows aren’t alone in their addiction to big contributions from the wealthy. The Biden campaign and the Democratic Party also drank deeply from the firehose of donations from the 1%. Plenty of Democratic policies are boons for the wealthy.
Some billionaires, such as Tom Steyer (net worth, according to Forbes: $1.4 billion) and Michael Bloomberg ($54.9 billion), have focused their political spending on Democrats. Some, such as JPMorgan Chase Chairman Jamie Dimon ($1.7 billion) and New England Patriots owner Bob Kraft ($6.6 billion), have given to candidates of both parties.
But it’s proper to focus more attention now on contributions to Trump because of the qualitative differences between him and his Democratic opponent. Biden didn’t incite a seditious crowd to attack the U.S. Capitol, or spend weeks purveying lies about the election results. He didn’t build a record as a political leader by indulging white supremacist groups and individuals.
“Trump’s contributors have already gotten their tax cut and seen the power of his deregulatory influence,” says Collins. “They’ve also seen Charlottesville and all kinds of other behavior that repelled a lot of businesspeople. But they still wrote the checks.”
(After a white supremacist rally that cost the life of a counterprotester in Charlottesville, Va., in 2017, Trump remarked that there were “very fine people on both sides” of the melee.)
None of Biden’s contributors disavowed their support for the president-elect in the weeks since the election, much less after the Jan. 6 Capitol riot. Many corporations and other business entities have backed away from Trump and Republican officeholders who challenged the election results.
It’s instructive to examine Trump and GOP policies over the last few years in the context of the sources of our billionaires’ fortunes. Of the 63 billionaire donors to Trump Victory, nine have made their money in natural resources — oil and gas, fracking, timber and coal mining. Trump has favored fossil fuels over renewable energy sources and facilitated more resource exploitation on federal lands.
At least seven are in real estate development (not counting more general investors who may have money in real estate assets). The 2017 tax cut enacted by Trump and the GOP majorities in Congress left open a tax loophole related to asset swaps in real estate while closing it for almost everyone else. Real estate investors also gained from a provision in the tax cut measure facilitating “pass-through” tax treatment of business income.
Of course, the tax cuts directed most of their benefits to the upper-income segment over which billionaires reign. The top 5% of Americans by income (all those earning $308,000 or more) got 42% of the tax benefits, and the top 0.1% ($3.5 million income or more), got about 8% of the benefit, with an average reduction in their tax rate of nearly two percentage points, worth nearly $200,000 a year on average.
In other words, the billionaires who invested in Trump got their money’s worth. The downside of their support is now on display in images from Jan. 6 being flashed coast to coast and around the world, and in the stark words of prosecutors’ filings.
We’re living in the world they created for themselves, and it’s time to take it back.