Latest news with #wealthinequality
The Guardian
2 days ago
- Business
- The Guardian
Trump's tax bill helps the rich, hurts the poor and adds trillions to the deficit
The blush is off the rose, or, rather, the orange. The erstwhile 'First Buddy' and born-again fiscal hawk Elon Musk recently said he was 'disappointed' by Donald Trump's spendthrift budget currently under debate in the US Senate. Squeaking through the House of Representatives thanks to the capitulation of several Republican deficit hardliners, this 'big, beautiful bill' certainly increases the federal debt bigly – by nearly $4tn over the next decade. Equally disappointed are those who have been busy burnishing Trump's populist veneer. Steve Bannon had repeatedly promised higher taxes for millionaires, but he has confessed he's 'very upset'. That's because the bill would cut taxes by over $600bn for the top 1% of wage-earners, also known as millionaires. It amounts to the largest upward transfer of wealth in American history. Yet this double betrayal will do nothing to impede the sundry Maga apparatchiks' breathless support for their dear leader. Musk has already tweeted his gratitude to the president for the opportunity to lead Doge (that is, slash funding for cancer research). So this bill has once again proven Republicans' willingness to relinquish their convictions as long as they can keep their grasp on power. And for Trump, it has reaffirmed that his pledged golden age is really just a windfall for the uber-wealthy like him. Now there can be no mistaking that Republicans' governing philosophy is neither conservatism nor populism but unabashed hypocrisy. Expecting the self-proclaimed King of Debt to balance the budget – or hoping workers would be protected by the billionaire whose personal motto is 'You're fired' – was always imaginative thinking at best. In his first term, Trump added $8tn to the national deficit. Even excluding Covid relief spending, that's twice as much debt as Joe Biden racked up during his four years in the White House. Almost $2tn of that tab came from Trump's vaunted tax cut, which delivered three times more wealth to the top 5% of wage earners than it did to the bottom 60%. Nor did its benefits trickle down, with incomes remaining flat for workers who earn less than $114,000. Trump's disingenuousness on the deficit continues a hallowed Republican tradition. All four Republican presidents since 1980 have increased the federal debt. By combining reckless militarism with rampant corporatism, George W Bush managed to balloon it by 1,204%. When Bush's treasury secretary Paul O'Neill expressed concern about that spending, Dick Cheney, the then-vice president, reportedly retorted: 'Deficits don't matter.' Except, of course, when a Democrat occupies the Oval Office. During his campaign for the US Senate in 2022, JD Vance derided Biden's signature $1tn infrastructure package as a 'huge mistake' that would waste money on 'really crazy stuff'. Like improving almost 200,000 miles of roads and repairing over 11,000 bridges across the country. Apparently less crazy, but certainly more callous, are the vertiginous cuts to the social safety net proposed in Trump's current budget bill. Its $1tn evisceration of Medicaid and Snap would leave 8 million Americans uninsured and potentially end food assistance for 11 million people, including 4 million children. When the Democratic Representative Ro Khanna introduced an amendment to maintain coverage for the 38 million kids who receive their healthcare through Medicaid, Republicans blocked it from even receiving a vote. But for all the budget's austerity, it also provides $20bn in tax credits to establish a national school voucher program. And equally outrageous are its provisions that have nothing to do with the pecuniary, from easing regulations on gun silencers to hamstringing the power of courts to enforce injunctions. Perhaps most breathtaking of all, though, is how shamelessly the bill enriches the already mega-rich. In its first year, its tax breaks will grace Americans in the top 0.1% of the income bracket with an additional $400,000, while decreasing the earnings of people in the bottom 25% by $1,000. In other words, those who can least afford it are financing relief for those who least need it. When the 50% of working class Americans who broke for Trump in last year's election realize they voted for a pay cut, they might begin to feel a bit disillusioned with the crypto trader-in-chief. They might even feel pulled to the authentically populist vision outlined by the progressives Bernie Sanders and Alexandria Ocasio-Cortez on their nationwide Fighting Oligarchy Tour. In the meantime, it is almost an inevitability that Republican senators will wring their hands before pressing the green button to vote 'yea.' Josh Hawley has called the budget bill 'morally wrong and politically suicidal', criticism which Trump has previously mocked as 'grandstanding'. The insult contains a typically Trumpian flash of psychological insight, because Hawley and his colleagues will no doubt do exactly what their counterparts in the House have already done – cave. Once Trump has scribbled his oversized signature onto the bill, his vision for the US will have become unmistakable. Try as they might, not even the spinmeisters at Fox News will be able to deny that he runs this country the way he ran his Atlantic City casinos, leading working Americans to financial ruin while he emerges all the richer for it. Katrina vanden Heuvel is editorial director and publisher of the Nation, a member of the Council on Foreign Relations, and a contributor to the Washington Post, the New York Times and the Los Angeles Times
Forbes
2 days ago
- Business
- Forbes
Book Review: Stephen Witt's Take On Nvidia, ‘The Thinking Machine'
SAN JOSE, CALIFORNIA - MARCH 18: Nvidia CEO Jensen Huang delivers a keynote address during the ... More Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California. The developer conference is expected to highlight new chip, software, and AI processor technology. (Photo by) The world becomes more amazing by the day. The surest evidence of the previous assertion is that wealth inequality continues to soar. Yes, you read that right. Inequality is a wonderful thing opposite the apologetic tone about it taken by left and right. Members of the left plainly disdain it, while members of the right claim it doesn't exist in the way the left imagines, that thanks to transfer payments (yes, wealth redistribution by government) inequality isn't that 'bad.' Except that it's not bad. It's great. How could remarkable achievements that power wealth creation be bad? If someone comes up with a cure for paralysis, will readers demand that the cure never reach the marketplace lest the creator grow rich? The beautiful, freedom-infused meaning of wealth inequality came to mind while reading Stephen Witt's new book, The Thinking Machine: Jensen Huang, Nvidia, and the World's Most Coveted Microchip. Nvidia co-founder Huang was already billionaire bracket rich when Nvidia was largely a company popular with gamers, but it's been Nvidia's central role in the rise of AI that will increasingly do and think for us in ways that will propel billions into amazing work they can't not do, that has resulted in Huang achieving centi-billionaire status. Thank goodness for inequality. It signals stupendous, life-enhancing improvement. Huang was already a relentless worker, but it was in 2014 when employee Bryan Catanzaro truly opened Huang's eyes to the possibilities of AI, and Nvidia's potential to lead it. After that, and in the words of Witt, 'there was only work' for Huang. 'There was only AI.' As Huang saw it, AI was 'O.I.A.L.O.,' a once in a lifetime opportunity. Huang had the best talent, and he would use it to usher in a future where machines yet again think in addition to doing. Per Witt, the new software 'can speak like a human, write a college essay, solve a tricky math problem, provide an expert medical diagnosis, and cohost a podcast.' And that's just the early stuff. To read Witt is to find out that the known with AI has pedestrian qualities relative to what remains unknown, and even better, what's not yet been discovered. Markets are a look into the future, equity prices in particular, and Witt quotes Nvidia employee Bas Aarts as saying about what's known only to those in the proverbial arena, that it's of the 'Wow, I cannot believe this is possible in this age' variety, that 'people are oblivious about what is already going on. People have no clue' about the amazing leaps on the way. There's your inequality. It's once again born of making the world so much better. The bet here is that AI will unearth human achievement that will render the poorest parts of Africa prosperous, all the while unearthing human flourishing globally that will make the abundant, incredibly prosperous, and – yes – beautifully unequal present appear Bangladesh poor and relatively wealth equal by comparison. Which requires a pause. Just as everyone reads a different book, everyone reviews the same book differently. The review you're about to read is being written by someone who hasn't a faint clue about how to 'back up' a computer, 'upload' a medical form, or even connect a laptop to a printer. This is a way of saying in advance that while Witt's book is heavy on technical jargon of the CPU, GPU, and CUDA variety, this review will largely focus on the presumed meaning of Nvidia's ascent to one of the world's most valuable and most important corporations. Some will ask what's the point of reading a review of a book about the man and corporation behind a remarkable technological leap since the writer is a technical dolt. It's a fair point, but one that arguably misses the point. That's because it doesn't take someone technologically proficient to grasp the brilliance of work divided across as many hands, machines, and mechanical minds as possible. Even better, it's not unreasonable to suggest that the mechanized technological genius that's here and that's on the way will render the technological illiterates of today the technologists of tomorrow exactly because so much formerly done by humans will be handled by machines. Time will tell. For now, it's best to start with gratitude for the opposite thinkers. Huang is clearly one of them. Witt writes in the book's introduction that he's setting out to tell 'the story of a stubborn entrepreneur who pushed his radical vision for computing for thirty years.' As is frequently stated here, there's no 'majoring' in entrepreneurialism simply because no one chooses to be an entrepreneur. Entrepreneurialism is a state of mind, it's a path certain individuals can't not take. It's not planned because it's not obvious. Furthermore, if it were obvious it wouldn't be entrepreneurial, and it wouldn't be entrepreneurial simply because what's obvious is already being done. To show how outlandish Nvidia's path was, just look at its valuation along with Huang's net worth. Oh wow did they ever discover something amazing. Wealth inequality is the measure of this happy truth. Huang as most know is of Taiwanese descent, though his parents (his father was a chemical engineer) sent him and a brother to a boarding school in Kentucky until they arrived. Not a fancy school (though it's fancier now thanks to Huang), it's believed Huang's parents didn't really know. They perhaps just guessed it was a school full of somebodys instead of one full of misfits. Which on its own is a story. What's important is that where Huang went to school wasn't going to matter, nor did it. To his parents, and ultimately him, the U.S. was the goal. Good athletes in the capable sense just need to get here. That's the hard part, while the rest is elevation. When he went off to college, it was Oregon State, not Stanford. In Huang's words, 'I just followed my best friend.' Really, what could school teach him? Genius can't be taught, which is no insight. Genius was Huang's parents getting his talents to the United States. The rest was his own invention. How to major in AI since AI wasn't a thing, or at the very least wasn't an operable thing when Huang was making his way up. Gaming was primitive. No need. Entrepreneurs create. They invent. Huang and the remarkable talent he cultivated would invent the future, not be told how to do it by some academic. The individual in Bryan Catanzaro whose passion helped spark Huang's own passion for AI was a humanities major. Hopefully conservatives convinced colleges and universities should pay the federal government back when their graduates don't thrive read Witt's book. One's major is immaterial, particularly in an economy as dynamic as ours. Work that can be taught is, by definition, old news. Out of Oregon State in 1984 Huang secured a job with Advanced Micro Devices. The pay was $28,700/year. Following AMD, Huang went to work for LSI Logic. He rose quickly, and was running a $250 million division when he, along with Sun Microsystems employees Curtis Priem and Chris Malachowsky, decided to pursue what became Nvidia. Even though they were told that the market for PC video gaming hardware was 'crowded,' entrepreneurs have evangelical qualities about what they're doing. Huang clearly did. The bullet-riddled Denny's where they started making plans for Nvidia is open to this day, and is located at 2484 Berryessa Road in San Jose. Apparently Huang still goes there, and tips in the thousands after ordering all manner of menu items (including chicken fried steak – good taste!) that he eats part of. Huang had even once worked at a Denny's. Anecdote sucks, but Huang plainly had the immigrant desire to assimilate himself. Of course he did. Conservatives who should know better claim 'we' can't properly assimilate immigrants, but there would never be a need even if there were a real 'we' beyond the rhetorical one. Implied in immigration is a desire to assimilate simply because immigration is an expression of a rich-person desire within some of the world's poorest to increase the value of their labor. Sequoia Ventures, arguably the world's greatest VC, was along with Sutter Hill the early source of Nvidia's funds. No less than Don Valentine (Cisco Systems, among others) told Huang after his subpar pitch that 'Wilf Corrigan says I have to fund you, so you're in business.' Corrigan was the head of LSI. He saw up close that Huang was going places. Notable about Nvidia is that it started strong. It's NV1 chip for video gamers sold in the 100,000 range, and as sales grew so did Nvidia. The problem was that the chips soon enough stopped selling, and their prices were lowered. In Huang's words about Nvidia's beginnings, 'Every single decision we made was wrong.' Which is an economics lesson on its own. Nvidia's 'recession' was the recovery, or would-be recovery from an NV1 error seen as 'catastrophic.' When governments fight recessions they dampen the recovery. That's the truth about the Great Depression that still eludes 99.99999% of economists. So bad were things from 1993-96 at Nvidia that Valley graphics expert David Kirk made his contract employment there contingent on receiving a paper check every week. Stock options were not an option. Amid all this, including another failed chip, the sign went up at headquarters about how 'our company is thirty days from going out of business.' Recessions signal recovery since recessions are when errors are fixed. Huang and Nvidia's troubled times of old are useful as a way of exposing some of the many fallacies that inform 'economics.' For one, there's a view that won't die among economics types that the Fed funds rate is the cost of credit. Oh please. There wasn't a number high enough in the mid-1990s to properly compensate a lender to Nvidia. Except that it wasn't just that the loan market was shut to Nvidia. Equity finance was a non-starter too as evidenced by Kirk's demand for actual paper checks over stock options. It all asks readers to contemplate again why Huang is so rich today. It's so easy to say that he's that way because he's a co-founder of Nvidia, but that's the point. It's too easy. The better explanation is that few initially wanted Nvidia's shares. There's quite simply no such thing as 'easy money,' but since there isn't, Huang almost certainly has more shares than he otherwise would. But that only tells part of the story. In January of 1999 Nvidia went public, but consider the year: 1999. When did you, the reader, first hear of Nvidia? If you own shares, when did you buy them? It's worth asking mainly because of those who owned Nvidia shares in 1999, it's no wild speculation that most don't own those same shares today. It would have been too gut-wrenching for the average bear. Witt reports between the summer of 2001 and the fall of 2002, Nvidia shares lost 90 percent of their value. While Nvidia became part of the S&P 500 after replacing Enron in 2001, and while Huang was briefly a billionaire that same year, Witt notes that Nvidia's shares didn't just decline 90%, but that 'It would fourteen years before he [Huang] saw that much money again.' To have kept faith in Nvidia on the way to enjoying enormous upside, the typical shareholder would have held on through some rough times, including 2006 when Nvidia's shares dropped 90 percent once again. Witt quotes one tech pundit as writing amid the 2006 collapse that 'For a long time, we have wondered when Nvidia's abject stupidity would have a price.' Stop and think about that. Or re-read it while thinking more about why Huang is so rich. He believed deeply when few did. It's a reminder that with extraordinary wealth that spurs so much inequality handwringing, it's perhaps better to think about the unseen. This is particularly useful with Nvidia since Huang, though known to have a 'terrifying' temper, was also loathe to fire employees. He yelled them into line with his 'cathartic' rants that he was very public about. Ok, but how many left after a tirade, or another dip in Nvidia shares, or because a 'better' company like Intel offered them a job. How many individuals walked away from billion-dollar fortunes? One long-time Nvidia employee, Dwight Dierks, sold some shares right after the float in 1999 to buy his father a car. When he describes it as a 'billion-dollar-Cadillac' in joking fashion, there's serious reality underlying the joke. Since going public in 1999, Nvidia shares are up 300,000%. Which is the point, but perhaps not the expected point. It's so easy to say how foolish it was for early Nvidia employees to leave, or for co-founder Curtis Priem to sell all of his founders shares for hundreds of millions from 2004-2006 when they would be worth $100 billion+ today, but as evidenced by how much departed employees and founders like Priem could have made, Huang pulled off the miracle of miracles. There's no other way to explain the would have, could have been fortunes. Naturally individuals sold, quit, left, came back, left again, and all sorts of actions unrelated to amassing shares that, by virtue of their miraculous climb, were never supposed to climb this high. In Huang's case, and amid the occasional costly stumble rooted in his relentless investment 'in speculative technologies that would either revolutionize computing or flop,' the future was far from certain. Exactly because any successful chip was immediately a target for imitation, Huang had to keep seeing ahead. In his own words, 'If we don't reinvent computer graphics, if we don't reinvent ourselves, and we don't open the canvas for the things we can do,' we 'will be commoditized out of business.' Imagine the pressure of having to constantly see around the proverbial corner, while knowing full well the brutal market reaction that awaits after the inevitable mistake. It all speaks to the entrepreneurial mind. And this includes people like Elizabeth Holmes who tragically sit in jail for believing so deeply in her vision. Never asked by Holmes's myriad critics is why, assuming she knew she was committing fraud, she never sold any of her shares. There was a huge and very liquid market for private shares, yet Holmes held on to hers. It's that state of mind thing again. It's why the unequal are unequal. Huang held on, and did so through incredibly difficult stretches that included him fighting to keep his job. The unequal believe in themselves, and they don't lose faith as others are expressing their lack of faith through share sales. Again, much more interesting than the billionaires minted by Nvidia would be those that weren't because they sold, exited, or both too soon. Which was once again logical. Witt is clear that earnings represented to Huang the chance to try something new. Rather than pivot toward the obvious, Huang was routinely searching for the 'zero-billion-dollar market,' as in the market that's not yet there. Is it any wonder that truly entrepreneurial visions are rejected by nearly everyone, and most notably the existing commercial successes? Writing about Huang, Witt indicates that he seemed to find comfort in markets 'that only he would participate in – one that only he would even see.' Huang indicates to this day that Intel isn't nor was it ever a competitor. Nvidia was yet again in search of the "zero-billion-dollar' markets that Intel wasn't interested in, but that Huang was. And is. He saw things and sees things. Very interesting in consideration of Nvidia's wild ride was the talent that Huang lured into the fold. Keep in mind that this is Silicon Valley, which means the most ferocious battle of all is the ongoing one for talent. Yet despite Nvidia's scary ups and downs on the way to arguably the world's most important company, 'Nvidia employees were unabashedly elitist.' It was a known that Nvidia was full of talent, which says so much about Huang. With sharks all around him trying to poach the most crucial capital of all, Huang managed to maintain a very deep bench. Terrifying as he could be, Witt notes that almost all of existing and former Nvidia employees interviewed by him 'had a tender story about Huang to relate.' What fun it would be to follow him around for a day, or days. And not just Huang. A company this dynamic is logically dense with characters. There's Bill Dally, who dropped out of high school given an aversion to sitting through history class, became an auto mechanic, but ultimately got a BA at Virginia Tech, a Masters from Stanford, and a PhD from MIT. Dally had options, including Intel, and was told he was 'crazy' for not taking an Intel job that surely more than a few Nvidians (?) did. There was John Nickolls who always yelled instead of talking. Witt notes that Nickolls 'had no interest in video games at all,' but was passionate about proving Moore's Law wrong. He did. Nvidia did. Cancer ultimately took Nickolls way too early, but to read about him was to want to ask him (or others in the Nvidia orbit) if he felt the mechanization of knowledge and thought might eventually save him from the cancer that existing medicine couldn't. Alex Krizhevsky didn't work for Nvidia, but he trained neural nets to see and think. By his actions, this soft-spoken Ukrainian immigrant conveyed to all manner of academics that (per Witt) 'they had so far wasted their careers' on beliefs that Krizhevsky discredited with a week's worth of 'training,' and enormous amounts of electricity used in the training. Krizshevsky oversaw a giant leap, one indicating that 'if you could teach computers to see, you could teach them everything.' Of course, in writing what was just written it's almost certain that all sorts of things were mangled in the telling. But that's surely the point. And it's why the AI advances elicit so much optimism in your reviewer. AI isn't a threat to humanity, rather it will elevate humankind in ways too grand to describe. Is there a way to say how it will reveal its genius? Certainly not. If there was a way to know what's ahead, then those who know would be billionaires for knowing. All we know, or should know, is that it will be brilliant. Think of the pin factory Adam Smith entered in the 18th century. One man working alone could maybe produce one pin per day, but several men working together could produce tens of thousands. Multiply the latter hundreds of thousands of times over with AI as technology thinks and does as though thousands and millions of brilliantly skilled individuals are at work. Oh, to be born today. Or fifty years from now. Surprisingly, Witt expresses fear throughout the book that AI could have evil qualities, but in the words of Huang, 'In order to be a creature, you have to be conscious.' AI will lift humans to the best versions of themselves precisely because it will enable specialization that will have more and more of us working all the time not because we have to, but because we want to. In a very real sense, the AI that has been authored by the remarkable chips created by Nvidia will turn the world's workers into Nvidia's workers. Which will be a beautiful sight to see. Impossibly rich as Nvidia employees are, they're still coming to work. They can't not. They work all the time because they love what they're doing, and they're in love with discovery. It cannot be stressed enough that progress in life is defined not by what we're doing and learning, but by what we no longer need to do and learn. That's why Huang is so right that AI 'can only lead to good.' It's so true. About halfway through The Thinking Machine, Witt quotes AI visionary (and oddly enough, skeptic) Geoffrey Hinton talking about 'the uncontainable thrill of sneak previewing embargoed AI technology that would shock the world once unveiled.' Yes! Once again, to be young. There's no limit to human advance, particularly as production is spread across a soaring number of hands, machines, and thought that's mechanized. Read Stephen Witt's book to get a sense of what's ahead as wealth inequality soars thanks to human flourishing going skyward, but almost as fun, sit back and watch. We haven't seen this movie before, but it will make all that we've seen before seem incredibly bland by comparison.
The Guardian
6 days ago
- Business
- The Guardian
The super tax debate is divorced from reality – and more proof that Australia's tax system is built for the rich
The unhinged criticisms to changes in superannuation make more sense when you realise that Australia's entire tax debate is geared to ensure rich, wealthy people and companies get richer and wealthier. The government's proposal to reduce the tax concessions on earnings on super balances above $3m has been the ultimate case in point. It will affect only 0.5% of people with super and would take many decades of governments not increasing the threshold to affect anything close to even 10% of people, and yet you would think the government is about to seize the means of production. So divorced from reality is some of the commentary that the Australian Financial Review thought presenting a scenario where someone's super grew $1.18m in one year to $3.18m was a winning argument against the tax because that person would be required to pay (gasp!) $1,528 in tax. The new argument is that the tax is bad because people will just find other tax rorts to make use of. (Great, let's go after those as well!) Because avoiding paying tax is pretty much the point of the system for wealthy individuals and large companies. For example, right now, numerous commentators who are against the changes to super are also saying we need to cut company tax to ensure competitiveness. Less mention is made that many large companies pay little or no tax, including in some of the most profitable sectors in Australia. My colleagues at the Australia Institute found that from 2014-15 to 2022-23 Queensland LNG projects delivered $310.1bn total income for gas companies but they paid just $966m in company tax – or just 0.3% of total income (and all of that was paid by just one company). If the graph does not display click here When huge multinational companies are able to earn such huge incomes but pay bugger all tax, the problem that needs to be addressed is not that our 30% company tax rate is rendering Australia 'uncompetitive'. Yes, we need to reform our tax system. But suggest gas companies should pay more tax and the chin-scratchers will say 'hmmm not like that, something, something Hawke, Keating … bipartisanship! That's because most commentary about our economy values profits as sacrosanct and more important than wages: If the graph does not display click here The same applies to individuals – wealthy ones matter more, especially when it comes to superannuation. We're told the real evil is taxing 'unrealised capital gains'. These are the increases in the value of the assets held in your super that you have yet to sell (or 'realise'). And look, I can understand how bad it would be. Imagine if, for example, Centrelink had a record of every share you owned and every six months calculated their value, or if you had to let Centerlink know if the value of your non-financial assets went up by more than $1,000. Outrageous! Unprecedented! Communism! Oh wait, sorry, actually that's what people on the age pension already have to do. We have a system where it is considered right that the poorest people in Australia are penalised if their assets go above $314,000 but where parts of the media come out against a proposal that if someone's super goes up $314,000 in a year from $3m they should pay $4,462 (1.4%) in tax. Please. The only reason there is so much outrage over this is if the rich and vested interested are annoyed people might realise just how big of a rort they have going. Currently these massive unrealised capital gains in super can keep going up and people pay no tax on them (unrealised, you see!) and then when they are retired they can sell them (ie realise them), and then pay … errr zero tax. Under these changes they would have to pay 15% on the share of earnings above $3m. Yeah, end of times. Heck even normal capital gains outside of super gets a great deal. If you have held an asset for over a year you will get a 50% tax discount on the profit. Earn $250,000 in capital gains, you get $125,000 tax free. Earn $250,000 in income, you get $18,200 tax free. Little wonder the rich love capital gains. The 0.2% of taxpayers who make $1m each year account for 41% of all capital gains: If the graph does not display click here The average salary of people with an income of $1m or more is around 16 times the average of people earning less than $100,000; the average capital gains is 234 times larger: If the graph does not display click here The very rich, their media supporters and financial advisers are worried we might start wondering how much revenue is being lost each year from giving them these tax breaks. Well, we know the answer – in 2025-26 around $33bn in tax breaks for capital gains tax and superannuation go to the richest 10% – or around two-and-a-half times what it would cost to fund dental in Medicare: If the graph does not display click here So here we are – tax reforms meaning companies that pay bugger all tax demanding cuts in the company tax rates, and the richest 0.5% demanding they not get a slightly lower tax break on the super earnings. Don't be fooled into thinking they are caring about you. Instead think of what could be done if Australia's tax system was better designed – better schools, better hospitals, better infrastructure. Right now, Australia's tax system works to give the wealthiest in society the smoothest of rides. These super changes will force them to go over a very small speed bump. They should be supported and they also should be just the start. Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
The Guardian
22-05-2025
- Business
- The Guardian
Publish tax returns to flush out dodgers
Re your article (UK's 50 richest families hold more wealth than 50% of population, analysis finds, 19 May), we would all see how little the super‑rich pay in taxes if we adopted the Scandinavian system of putting all tax returns in the public domain. Nosy neighbours would soon flush out tax StollLondon Reading the comment on benefit cuts by Liz Kendall, the work and pensions secretary (Our £5bn disability benefits cut will stop welfare state collapsing, says Kendall, 20 May), brought to mind the notorious remark from the Vietnam war that 'it became necessary to destroy the town to save it'.Dr Richard CarterPutney, London As a Manchester United supporter, the only bright spot for me in their 1-0 defeat by Tottenham Hotspur in the Europa League final (Sport, 21 May) was that I knew John Crace would be happy. It has been a hard season for both of us and we hope for better EvansRuthin, Denbighshire Would Adrian 'Impossible to find the next Gary Lineker' Chiles (21 May) and Kieran 'Jamie Carragher No 1 football pundit' Morris (22 May) make good candidates for a future Dining Across the Divide column?Carol WalkerSheffield Perhaps artificial intelligence could be tasked with constructing fairer copyright law (Elton John calls UK government 'absolute losers' over AI copyright plans, 18 May).Alan WorsleyHull Have an opinion on anything you've read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
The Guardian
19-05-2025
- Business
- The Guardian
UK's 50 richest families hold more wealth than 50% of population, analysis finds
The number of billionaires in the UK has grown sharply – from 15 in 1990 to 165 in 2024 – at the same time as inequality in the UK's overall wealth distribution has dramatically increased, analysis has found. Timed to coincide with the Sunday Times' rich list, the Equality Trust's investigation also found that billionaires have become 'ludicrously' more wealthy, with their average wealth skyrocketing by more than 1,000% over the same period. The top 50 richest families in the UK now hold more wealth than the poorest half of the population, comprising more than 34 million people. In 2024, the two richest UK billionaires held more wealth between them than all the billionaires in the 1990 rich list combined. 'Our analysis also shows the vampiric nature of extreme wealth, which is completely incompatible with the health and wellbeing of the nation,' said Priya Sahni-Nicholas, co-executive director of the Equality Trust. 'Property, inheritance and finance account for over half of total billionaire current wealth: sources of wealth creation that are responsible for large-scale planetary and community destruction. 'The obscene growth in wealth of the UK's richest is due to them profiting from society's struggles while causing them additional harm and undermining successive governments' goals of decarbonisation, spreading more wealth and growth out of London, ending the housing crisis, encouraging the growth of new – and frequently greener – industries, and encouraging stronger communities. 'The issue of extreme wealth really is existential; for our very survival we need to get serious about changing economic structures and design policies that end the existence of billionaires.' Julia Davies, a member of Patriotic Millionaires UK, said that inclusion in the rich list should be a mark of shame. 'This process of hoovering up wealth into the hands of ever fewer people is directly harming everyone. These people don't deserve that level of wealth, it just so happens that some people gather an incredible amount of money around them while other people don't, despite educating our kids and keeping our health service going.' Davies said it was wrong to call the wealthy 'job creators'. 'I call them job eradicators because when you consolidate businesses into the hands of ever fewer people, you're wiping out smaller and medium-sized businesses because they cannot compete with chains that undercut them. 'These people also employ such effective tax-management measures that they're paying far lower rates of tax to the local and national economy than working people or small to medium-sized businesses.' It did not have to be this way, she said. 'You can use wealth to accumulate ever more wealth or you can use it to address many of the multiple issues that society is struggling with. 'It's not intrinsic in being wealthy to want to continue to attract ever more wealth to yourself at the expense of society,' she said. 'That's not something that just happens to you when you become wealthy and we shouldn't just accept it. It's a choice.' Fernanda Balata, a political economist at the New Economics Foundation and author of Exploring An Extreme Wealth Line, said that the UK had gone down a route of economic instability while the government had put the super-wealthy above everyone else. That, she said, 'is not by accident.' 'There are so many connections now between the wealthy and the powerful, that it spills over into public institutions,' she said. 'This means politicians today are having to rely increasingly on lies and flawed narratives to keep the system going.' But Balata said there was hope. 'There is broad consensus now that extreme levels of wealth inequalities are causing multiple harms to society.' Balata said that politicians need to start looking at extreme wealth as an issue in itself. 'We need an Extreme Wealth Line: the point at which excessive wealth causes unjustifiable harm,' she said. Dr Benjamin Tippet, a lecturer in economics and wealth inequality at King's College London, has modelled what a 2% tax on those on the rich list would have raised, if the policy had been in place since the mid-90s. 'I discovered that a 2% wealth tax on the tax residents on the rich list would have raised about the equivalent of £6bn per year: £155bn,' he said. 'Invested, that would have been worth about £325bn in today's money – well over £11,000 per household. That's a significant national wealth fund. And even with this tax, the share of wealth of people on the rich list – the top 0.001% – would still have increased.'
