The Biden Initiatives: Who Should Pay?
An Economic and Social Assessment

There is little debate among residents about whether we need to repair and/or upgrade both our physical and our human infrastructures in the US. On the physical side, our highways, waterways, railways, hospitals, electrical grids, airports, and seaports are virtually all in a state of disrepair or obsolescence. There is a huge need to bring them all into the 21st century with stronger, safer materials while using the advances of science to take advantage of reliable, safer, renewable, and less polluting materials and energy sources. On the human side economists and other social scientists know that a healthy and educated population are the best investments we can make in ourselves. We need to do little more than answer this question: Who is better equipped to make better decisions and become more productive employees: The healthy and well-educated, or the sick and the ignorant? Few, if any, human beings would choose to be sick and ignorant if they had a choice in such matters. The costs of both are prohibitive to 54 percent of residents.

The Issues. The degradation in human investments, however, is not about wear and tear. It is mainly the consequence of a lack of affordable health care and educational opportunities. These two elements of the human condition are mainly the result of our unequal distribution of incomes and wealth. The point of contention that arises is over this issue: Who should pay for the wellness upgrades in both our physical and human infrastructures—those who can afford to pay for them without a noticeable change in their wealth accounts, or those who cannot afford to pay for them at all?

Analysis. It is my conviction based on a lifetime of study, observation, analysis, synthesis, and evaluation that we should tap the sources of money and wealth that are 1) the largest in value; 2) the least taxed and least earned among all the sources; 3) that grow to larger and larger amounts over time; 4) whose growth is also untaxed and unearned; and 5) their use would do least harm to everyone—rich or poor. In fact, taxing large wealth accounts would do no harm at all to anyone! That is because the wealth accounts of the ultra wealthy today total $124 trillion. If you like visuals,, lay 124 trillion dollar bills end-to-end, and the sum would make 419 round trips to the moon and back. In just 10 years the same total is almost certain to reach $248 trillion, or 838 round trips to the moon and back.

Why Wealth? Wealth is the value of our stocks, bonds, and real estate, less the debts needed to build them. Nearly all wealth comes to recipients untaxed and unearned via the inheritance laws. Moreover, this same wealth accrues interest, rents, dividends, and capital gains such that it doubles in value every 10 years (CAGR = 7.2%). It is untaxed and unearned by laws designed to benefit the wealth of the wealthy and their offspring today, tomorrow, and into perpetuity. These laws allow wealth to compound tax-free from 1) a step-up in basis to inheritors; 2) allowing the wealthy to establish tax-free private foundations; and 3) tax exclusions via “pass-thru” laws, and even from borrowing. Many billionaires borrow money for income purposes at very low rates of interest instead of taking a salary that would require them to pay a 31 percent tax on their income. These loopholes allow many of them to pay no income taxes at all. Suffice to say, we have more billionaires than does any other country; while 47 million residents must live in poverty, and another 112 million must live below a Fair Wage Level as determined by a dedicated group of economists at the Massachusetts Institute of Technology (MIT).

As an example of how money cannot buy everything, what could be clearer than the fact we are all at risk of contracting pandemic viruses, yet none of us outside the health care discipline is qualified to confront and eradicate them? A large bank account does little to combat them, nor pay the costs of eradicating them from all potential carriers. Only governments of rational, caring individuals have the means, the money, the expertise, and the opportunity to assemble, create, test, measure, and assure a safe vaccine that can reach the maximum number of people worldwide, at least cost, and thus do the greatest good. Logic, alone, tells us all that. Governments also have the means to establish R&D and distribution costs equitably.

Summary. The costs of the programs and issues to counter the economic impact of the Covid-19 virus, and our physical and human infrastructure issues come to about $12 trillion, or 1/10th the wealth holdings of the ultra wealthy. It could be paid in annual increments of $1.2 trillion over 10 years. The annual growth in just the ultra-wealthy’s accounts is $10 trillion. Thus, all the initiatives could be paid for in just 13 months from the future growth on the assets that every productive member of our society helped to produce—except for the ultra-wealthy who did nothing to inherit it beyond choosing their parents wisely, and voting for the party that favors them over all the rest of us.