Dennis M. Jones is a billionaire who claims that the $34 million he paid for his new yacht was a form of charity since the yacht creates jobs in the manufacturing, maintenance, cleaning, furnishing, decorating, cooking, and serving industries.
Funny, that’s the very same self-serving rationale that society matron Cornelia Martin gave to justify an egregiously ostentatious masked ball in New York in 1897—in the middle of a depression—in which one wealthy woman came wearing today’s equivalent of $6.4 million in jewelry sewn into her dress. Thus reports Sven Beckert on the very first page of his The Monied Metropolis, his history of the concentration of wealth into the hands of New York financiers, manufacturers and merchants during the Gilded Age (1850-1896). The Gilded Age ranks second among American epochs in the flow of wealth upwards to a handful of very wealthy people. First place, of course, goes to the current era, which started in about 1980 and which I like to call the Age of Reagan.
If you wondered why rich folk can so glibly come up with convoluted excuse for why it’s great for the government to follow policies that take money from the middle class and poor and give it to them, now you know: They’ve been laying down the same line for decades.
Let’s take a look at two scenarios for an alternative use of Mr. Johnson’s $34 million and the untold millions he pays every year for upkeep of his metal-and-fiberglass leviathan.
The first scenario is a fantasy socialist utopia in which hundreds of families enjoy a weekend or week owning the yacht. The government pays for the cost to maintain the yacht and succession of temporary owners. Living on the yacht is open to everyone. At least everyone who likes that sort of thing. I’ll take the three-week trip with luxury accommodations across the old Silk Road instead!
Now a second, realistic scenario: The government spends the additional $34 million it collects from Johnson on teacher salaries, thereby shrinking the size of classrooms and providing an environment that’s more conducive to learning. Or maybe, the government could fund $34 million in research into Alzheimer’s disease or cancer. $34 million would repair a lot of highways and feed a lot of hungry children. What about spending $34 million to subsidize consumer purchase of solar heating equipment.
Every single one of these uses for $34 million creates jobs. More importantly, they all improve our society and future economy more than does buying and operating a yacht for the gratification of a single individual.
But it’s Mr. Jones’ money! will shout those like George Will and the Roberts court who place property rights about human rights and social needs.
Yes, but in any other decade since we enacted the 16th Amendment in 1913, Mr. Jones would be paying a higher rate on the taxes from both his income and investments.
Moreover, no matter how hard Mr. Jones worked, he did not really earn that money by himself. The pharmaceutical company he sold 14 years ago for $3.4 billion used roads, bridges, sewers, airports and pipelines built with government money, all protected from both local and foreign threats by government organizations. His employees were mostly educated in public schools. They all made a ton less money than he did—and does—and none benefited the way he did from the company sale.
I couldn’t find a biography of Jones, but it doesn’t matter for my argument. He earned a billion in only one of two ways: Either he was already rich and connected or he was born with a talent which he may have burnished but which he did nothing to create. Either way, luck had at least as much to do with it as hard work. I’m sure that there are servants, boat engine maintenance specialists and cooks who work just as hard.
In other words, Mr. Jones owes a lot to society and to luck. I’m not saying he shouldn’t earn—and spend—more than other people. Nor am I proposing a ceiling on wages and wealth.
What I am saying is that we have to return taxes to their levels before 1980 as long as there is still widespread poverty in the world, schools are overcrowded, our infrastructure is rapidly deteriorating, global warming is exacting severe penalties in lost lives and wealth, and people still suffer from debilitating ailments.
If that means Mr. Jones couldn’t afford to spend $34 million to buy a yacht and then untold millions to operate it, so be it. Life can be tough for billionaires.