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Sunday, May 22, 2022

The comical billions landed by the tech bosses during Covid

The comical billions landed by the tech bosses during Covid

City Comment: The tech bosses billions are a failure of tax and of regulation
In some ways, the extraordinary billions lately accrued by American tech bosses are just a curiosity.

Something for the rest of us to gawp at, while we analyse share price charts and regret not taking the advice from that bloke in the pub 10 years ago to pile into the stocks.

The amounts of money involved are so ludicrous as to almost be comical.

Certainly, in many cases it is clear the men themselves have no clue what to do with these fortunes.

Jeff Bezos of Amazon has so little idea that he’s been building rockets and firing them into space with him inside.

Elon Musk is so bored he sent one of his own cars into space, partly as a scientific experiment, but mostly just because he could.

Since these fortunes have largely accrued to people who founded their own companies it is tempting to see any complaints as sour grapes.

As the Economist just noted on Apple’s Tim Cook: No other chief executive has created more absolute value for shareholders. So, you should have bought the shares and if you didn’t, that’s just too bad.

There’s something else here though. Merely to compile these words, I used products sold by Apple, Google and Microsoft. I didn’t drive to the office in a Tesla, but I would if I could.

The point is that in many cases these businesses are basically monopolies, they are near impossible to opt out of.

Which in turn makes it difficult for competitors to establish themselves.

So it is tempting to see the fortunes of Bezos and co as at least partly a failure of both regulation and the tax system.

The small amount of taxes the billionaires pay, zero in federal income tax in some cases, is just bad manners.

A recent report from ProPublica estimated that the top 25 billionaires paid a federal tax rate of just 3.4%. Elon Musk has often paid zero federal income tax.

That is in line with the law, because he typically doesn’t take an income – his wealth accumulates in capital, which is taxed differently.

But that’s not an immovable, natural state of affairs, it is a political decision which allows the very rich to play an entirely different game to the rest of us.

All in it together? Not even remotely.

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