Surviving the Coronavirus Together
March 19, 2020
The coronavirus is having a huge, negative impact on the US economy. That negative impact will grow over the next several months.
Everyone will be impacted by the downturn in the economy. Those who must take care of their children while working from home, those who have no sick leave or family leave, and those who lose their jobs will be hit the hardest.
Many corporations are also being hit hard. The airline industry is asking for $50 billion in aid. Hospitals, hotels, cruise ships, restaurants and restaurant workers, taxi drivers, health care and elderly care workers, and the many other businesses and workers who make our economy thrive are experiencing partial or full loss of income.
One thing which can help both workers and businesses survive through this crisis is to tap into the enormous wealth of our country. The United States is the wealthiest country in the world. Wealth is measured as the difference between total assets (houses, savings, stocks and bonds, retirement accounts, etc.) and total liabilities (mortgage, car loans, student debt, credit card debt, etc.)
People in the US hold over $100,000,000,000,000.00 ($100 trillion) in personal wealth.
Corporations in the US hold $1,600,000,000,000.00 ($1.6 trillion) in corporate wealth.
A very small portion of that wealth can save the economy now and serve as a springboard to a quick recovery and economic expansion after the coronavirus is brought under control.
A one-time, 2% wealth tax on individuals and a one-time, 6% wealth tax on corporations would give our people and businesses the ability to survive this national and international disaster.
2% of the personal wealth of this country equals $2 trillion. That $2 trillion can be used to cover loss of pay due to loss of jobs, no or minimal sick leave and family leave, childcare and elderly care expenses, etc.
From an individual standpoint, the median individual wealth is $38,000.00. On average, a 2% wealth tax on individuals would equal $760.00, Each person in turn would receive back a check for $6,000.00.
Under this scenario, every person would pay the same tax rate, and every person would get the same $6,000.00 payment.
For example, someone who had $38,000.00 in wealth would pay in $760.00 in a one-time and would receive a check for $6,000.00.
Someone who had $300,000.00 in wealth would pay in $6,000.00 in a one-time wealth tax and receive a check for $6,000.00. They would break even on this program.
Anyone with wealth more than $300,000 would start paying in more than they paid into the system. Here are some examples:
- Someone with half a million in wealth would pay in $10,000.00 and receive back $6,000.00. They would be contributing 0.8% of their wealth to help us overcome the effects of the coronavirus.
- Someone with $1 million in wealth would pay in $20,000.00 and receive back $6,000.00. This person would be contributing1.4% of their wealth to help all of us overcome the effects of the coronavirus.
- Someone with $100 million in wealth would pay in $2,000,000.00 and receive back $6,000.00. This person would be contributing 1.9% of their wealth to offset the coronavirus devastation
- Someone with $1 billion in wealth would pay in $20,000,000 and receive back $6,000.00. They would be contributing almost 2% of their wealth to fighting the negative effects of the coronavirus. There are 607 billionaires in the US.
I think someone with half a million dollars in wealth would not be opposed to contributing $4,000.00 (or 0.8%) of their wealth to help those who are hit hardest by the coronavirus.
I think the same for someone having $1 million in wealth. They would not be opposed to contributing 1.4% of their wealth to this effort.
For the roughly 36,000 households having $100,000,000 or more, some may object to using 1.9% of their wealth for fighting the negative impacts of the coronavirus. The same for the 607 billionaires. However, since most of these folks are connected to some of the wealthiest businesses in our country, I would hope they would see their contributions to both do good, but also to help the economy bounce back more quickly and strongly as the crisis comes to an end.
I would propose that the same type of thought process apply to a one-time corporate wealth tax. A 6% one-time corporate wealth tax equals $96 billion. That money could help businesses stay open, continue production, and continue paying their employees.
Both of these taxes and resulting expenditures would not add a penny to the national debt which currently stands at $23.3 trillion.
Robert Beezat has managed a broad range of organizations in the private, public, and not-for-profit sectors, including many serving lower income communities. He has spoken on behalf of NETWORK at colleges and universities regarding social justice issues and the Common Good.