In the US the COVID pandemic results in extreme contrasts. The acute economic crisis entails 32 million unemployed and at least 27.5 million without health insurance. At the same time, it is precisely the corona crisis that makes the super-rich even richer. US billionaires have become 700 billion richer since the corona lockdown. Democratic Senator Bernie Sanders now wants to fight this effectively: with a special corona tax. In return, all US citizens will be guaranteed free health insurance for one year.
In the 17 weeks since the corona lockdown in March until mid-July, almost 140,000 US Americans died of COVID-19 and more than 50 million lost their jobs. Of these, 32 million are currently unemployed, according to the organization Americans for Tax Fairness. The richest of the rich, however, are still recording capital gains.
Billionaires and poverty USA: Bizarre contrasts
Online companies benefited massively, especially during the lockdown: the closure of restaurants and shops was to their advantage. For example, the stock market value of Facebook increased by 60 percent from the beginning of the restrictions in mid-March to mid-May. That of Amazon increased by 45 percent. The value of Netflix by 46 percent. Large technology-oriented companies benefit(ted) enormously due to the current crisis. However, the global economy and workers have to endure the worst economic crisis in recent history, as kontrast.at has reported.
Not surprisingly, one of the biggest winners of the crisis is the richest man in the world: Amazon CEO Jeff Bezos. He has seen his assets rise to 179 billion dollars. That corresponds to an increase of 65 billion dollars or 58 percent. Mark Zuckerberg’s (Facebook) assets increased by 62 percent to $ 88 billion. The money of Elon Musk (Paypal, SpaceX, Tesla) has almost tripled: to over $70 billion.
The year 2020 so far summarized: The Corona crisis has caused a worldwide drop in sales, unemployment and an uncertain future. Millions of US citizens have no health insurance during times of a global pandemic.
For the richest of the rich, however, the global economic crisis means the opposite. The total wealth of US billionaires in 2020 is 12 times higher than their total wealth in 1990. Altogether, the wealth of the more than 600 US billionaires grew by an additional $700 billion during the Corona crisis. This has been reported by the organization Americans for Tax Fairness and is based on Forbes data.
Corona special tax: the “Make Billionaires Pay Act”
Democratic US Senator Bernie Sanders now wants to balance this inequality. And he does so with a kind of special Corona tax for the super rich. He calls it the “Make Billionaires Pay Act”: a one-off 60 percent tax. In a tweet from the beginning of August he provocatively asks: “How much is too much?” Below, a graph shows the asset growth of Bezos, Zuckerberg and Musk since the beginning of the US lockdown in March.
Specifically, Sanders is planning a one-off tax of 60 percent on the asset gains since the lockdown. That means that only the gains recorded in the period from 18th March 2020 to 1st January 2021 would be taxed. With these revenues the health care of all US citizens would be guaranteed as a basic right for one year: All costs deriving from medical treatment would no longer have to be covered by the citizens themselves.
The US is the country of bizarre opposites: in times of the pandemic billionaires gain 700 billion dollars more while 30 million US citizens cannot even afford health insurance.
With this special Corona tax Bernie Sanders wants to guarantee what EU citizens already take for granted: health insurance.
Land of inequality
In the USA, there is no social safety net as in most European countries. There is neither general health insurance nor a permanent basic provision for the unemployed. The Corona crisis has further intensified these inequalities.
Only old and particularly poor Americans are covered by state health programs. Most employees obtain their health insurance from their employer. But especially in the lower income jobs, employers often do not pay for insurance coverage, as the German newspaper DIE ZEIT reported. Obama-Care allows people to insure themselves, but it is highly overpriced and still provides inadequate protection. Kontrast.at has reported.
In the US, illness means poverty. In the pandemic, millions more US citizens are now losing their insurance coverage along with their jobs. This is a disaster not only for the chronically ill. In the US, a global health pandemic means a disaster for the entire population.
Even before the pandemic, the US was characterized by extreme inequality: The top 10 percent own nearly 64 percent of the wealth. Nearly 38 million people live below the national poverty line. So the compensatory contribution from the Corona special tax seems more than fair. Since people are not billionaires because they work more or live more economically than others.
Billionaires are entrepreneurs: they combine work and know-how. And a company is of course also heavily dependent on the manpower of its employees. Because first and foremost the company (owner) profits from the profit margin on the work of others.
In this way companies generate added value that far exceeds the entrepreneur’s own contribution. The Corona special tax could now provide US citizens with free health insurance for at least one year.
Corona tax would generate about 422 billion for health insurance
Together with the announcement of the Corona special tax, Senator Sanders also published a fact sheet. There he quantifies the exact taxation for the richest US billionaires and calculates what they would have to pay through the tax by 5th August 2020. That would be 42.8 billion dollars for Bezos, 27.5 billion dollars for Musk and 22.8 billion dollars for Zuckerberg.
In total, the “Make Billionaires Pay Act” could raise $421.7 billion in taxes. Only those super-rich people with assets of more than one billion dollars would be taxed. It is currently still open whether the plan will be approved by the Senate and Congress.