Billionaires Make Positive-Sum Contributions to Overall Welfare

Responding to: Don’t Panic About Falling Birth Rates — Andrew Stuttaford · 2026-06-11

What the Piece Argues

The piece uses Representative Ocasio-Cortez’s claim that you “can’t earn a billion dollars” as its springboard to defend the legitimacy of extreme wealth concentration more broadly. It argues that billionaires like Bezos, Musk, Jordan, and Taylor Swift have earned their fortunes by creating products and services that people voluntarily buy, and it cites a 2022 Nobel-laureate study showing that producers capture only 2.2 percent of the social returns from technological advances. The piece frames the political campaign against billionaires as dangerous — connecting it to the lionization of Luigi Mangione, to the Leninist “former people” concept, and to the geopolitical argument that the U.S. needs its billionaires to compete with China and Russia. It contends that taxing unrealized gains would force entrepreneurs to sell control of their own companies, destroying the ventures that generate broad economic benefit, and it closes by arguing that the real motivation behind billionaire demonization is not egalitarianism but a power grab by one faction of the elite against another.

Receipts

The piece’s central claim — that billionaires make “positive-sum contributions to overall welfare” — hides the direction of that sum: worker productivity has grown roughly 72 percent since 1979 while typical worker compensation has grown roughly 17 percent (Economic Policy Institute). The surplus didn’t vanish. It went to corporate profits and shareholder returns.

• The framing wants you to believe: billionaires earned their wealth through legitimate value creation that benefits everyone; attacking them is economically destructive and politically dangerous.
• What’s really going on:
  • Worker productivity has grown roughly 72 percent since 1979; typical worker compensation has grown roughly 17 percent. The difference went to capital (Economic Policy Institute).
  • Billionaire wealth has tripled in the United States since 2000 — from roughly 270 billionaires to over 750 — while the bottom 50 percent of Americans now hold roughly 2.6 percent of total wealth (Federal Reserve, Distributional Financial Accounts).
  • Bezos’s $2.7 billion 2024 tax bill sounds enormous. His total net worth was roughly $230 billion — meaning his tax bill was about 1.2 percent of his total wealth. An Amazon warehouse worker making $35,000 pays a higher effective rate on every dollar she earns (Forbes; Inequality.org).
  • The piece’s own argument inadvertently proves the mechanism: “The bigger the government, the deeper the swamp” — meaning government creates the conditions billionaires profit from, and billionaires use that profit to capture the government. The piece defends the billionaires and blames the government. The circularity is the tell.
  • Since the 2017 tax cut, U.S. corporations have spent record amounts on stock buybacks — over $806 billion in 2018 alone — instead of raising wages or investing in workers (S&P Global). The system is doing exactly what it was structured to do: move value upward.

The DEFCON Ladder

When to use: a polite conversation with a neighbor who’s been reading the business pages; you want to gently correct the record without alienating.

DEFCON 5 — Polite Reframe

When to use: persuadable moderates; good-faith family members; the person who genuinely believes billionaires earned it and doesn’t see the structural question underneath.

The warehouse worker in the fulfillment center in Chattanooga makes about $35,000 a year. She works ten-hour shifts. She picks, packs, and ships the orders that generate the revenue that builds the wealth. She is one of 1.5 million Amazon employees. Together, they built the company.

The article tells you that Jeff Bezos “earned” his billions by providing something people wanted to buy. That’s partially true. Amazon is a remarkable company. But the warehouse worker also wanted to buy things. She wanted to buy groceries without food stamps. She wanted to pay rent without a roommate. She wanted to afford the insulin her mother needs. Meanwhile, corporations spent over $806 billion on stock buybacks in a single year — more money than her entire fulfillment center will generate in a thousand years of ten-hour shifts — and none of it went to the people who packed the boxes.

The question was never whether entrepreneurs create value. They do. The question is who captures the value they didn’t create alone — and what happens to a democracy when that capture is so concentrated that the captured wealth buys the rules. You can ask that question without demonizing anyone. You should ask it. A healthy society does.

DEFCON 4 — Firm Moral Superiority

The defense of billionaires leans heavily on a heroic picture: the garage inventor, the visionary who bet everything, the builder who gave us life-changing technology. But the actual history of the modern hyper-fortune shows a far less romantic picture—one in which the state’s infrastructure, publicly funded research, and a rigged tax code do the heavy lifting, while the “founder” walks away with a trillion-dollar prize.

Let’s be precise. The iPhone’s touchscreen, GPS, the internet itself—all emerged from government-funded research. Amazon’s logistics empire was built on public roads and a postal system that delivers to every address; its warehouse workers’ poverty wages are subsidized by billions in public assistance. When Jeff Bezos’s net worth jumped by $75 billion in a single pandemic year, it wasn’t because he personally invented a new delivery truck. It was because the stock market rewarded Amazon’s market dominance and its ability to squeeze more out of its labor force while the rest of us were locked down.

And the tax story is a shell game. The Nordhaus study cited by the piece—that innovators capture only 2.2 percent of social returns—is trotted out as proof that billionaires are givers, not takers. But that data ended in 2001, long before the era of platform monopoly, buybacks, and the explosion of wealth concentration. What the study measured was the fraction of the total benefit captured by the innovator in a hypothetical scenario; it doesn’t account for the fact that much of today’s billionaire wealth comes from rent extraction, not innovation—monopoly pricing, labor monopsony, tax arbitrage, and financialization. Amazon’s market power lets it charge fees that resemble a private tax on small businesses; Google’s search dominance is a tollgate on the flow of information; private equity loots profitable companies and leaves workers and pensioners with the wreckage. Those are not the rewards of invention; they’re the spoils of power.

When the defense says “billionaires pay their fair share,” they rely on the fact that income tax rates look progressive. But what they carefully omit is that the truly wealthy live off unrealized capital gains—stock that goes up in value without ever being sold, and therefore never triggers income tax. They borrow against that stock to fund their lifestyle, tax-free, and at death their heirs get a step-up in basis that erases the entire gain. The effective tax rate for the Forbes 400 can dip into the single digits. The janitor who cleans their office pays a higher share of her income in payroll taxes than they do on their billions.

So let’s drop the pretense. The moral claim that billionaires earned every cent through grit and genius is historically inaccurate and analytically dishonest. Their wealth is socially constructed—built on public investment, shielded by a tax code written for their benefit, and extracted through market power that the rest of us are not allowed to exercise. We are not asking them to give it all back; we are asking them to pay into the same society that made their wealth possible at a rate that reflects what they actually received. If that feels like punishment, that’s a confession about how little they think they owed all along.

When to use: a Twitter exchange with a self-styled “rationalist” who invokes “incentives” and “human nature” to defend every obscene fortune; you need to make the broader audience laugh while you reveal the con.

DEFCON 3 — Mockery and Ridicule (The Rack in the Room)

Oh, the poor billionaires. Imagine the suffering of the man who can afford to rent an entire Venetian canal for his wedding but is being persecuted because someone asked him to chip in for the schools. Ken Griffin is so aggrieved by a mayor’s video that he’s threatening to move jobs to Florida—because nothing says “I value this city” like holding its workers hostage. Meanwhile, Linda the warehouse picker is feeding her kids with food stamps while the company she works for posts record profits, and her employer’s founder is spending $10 million on a Met Gala sponsorship. But sure, tell me more about how the real problem is taxing unrealized gains.

The argument that entrepreneurs need their billions intact to “innovate” is a comedy of self-regard. Elon Musk took the $180 million he got from PayPal and put it into SpaceX and Tesla. Good for him. But the implicit claim is that if he’d had to pay, say, a 2 percent annual wealth tax on his fortune above $50 million—amounting to a few million dollars a year back then—he would have said, “You know what, forget Mars, I’m buying a yacht.” Please. The man who says he wants to die on Mars is not going to abandon rocketry because he has to pay a tax rate still lower than what a schoolteacher pays. The only thing that a wealth tax threatens is the velocity at which his net worth compounds tax-free. It doesn’t kill innovation; it slows the accumulation of dynastic power.

And spare us the crocodile tears about “social murder” and the “demonization” of the rich. The author laments that a CEO was tragically murdered, and we all agree that murder is abhorrent. But to pivot from that to “therefore taxing billionaires is dehumanization” is an offense against logic and decency. The piece even name-checks the “Epstein class” as a sinister new smear—but the term arose because multiple billionaires actually did associate with a notorious sex trafficker. That’s not propaganda; that’s reporting. If the sight of your own company makes you uncomfortable, the solution is not to ban the mirror.

And the geopolitical argument? It’s pure projection. The piece warns that China and Russia will cheer on the war against American billionaires—as if Beijing’s oligarchs aren’t instruments of state power and Moscow’s aren’t mafia bosses who answer to Putin. The real geopolitical vulnerability isn’t that we might tax a few hundred people; it’s that we have a crumbling infrastructure, a healthcare system that bleeds working people dry, and an innovation pipeline that depends on public research while the rewards are privatized. You want to compete with China? Fund the schools, build the grid, and stop letting the richest Americans treat the IRS like a suggestion box.

The whole edifice is a joke: the richest people in history, sitting on mountain ranges of untaxed stock, crying poverty because someone proposed they pay a little more. The rack is in the room, and it’s wearing a Brioni suit, complaining that the peasants are being mean.

When to use: a direct confrontation with an apologist for extreme wealth; you need to hold up a mirror and show them exactly whose behavior matches the villain they imagine.

DEFCON 2 — Aggressive Villainization (The Mirror)

You say that billionaires are the engines of prosperity, the heroes of the free market. But your hero looks a lot like the monopolist you claim to despise. You hate it when a giant corporation uses its power to squash competitors, but Amazon’s entire logistics network is a monument to predatory pricing, data extraction, and the destruction of small retailers. You rail against “crony capitalism,” but the tax breaks, the loopholes, the special depreciation rules, the carried-interest carve-out—those are crony capitalism, and the billionaires you defend are its primary beneficiaries. You call yourself a patriot, but when your wealth depends on suppressing wages so that the public has to subsidize your workforce through Medicaid and SNAP, you are making the American taxpayer your silent business partner against their will.

Now look in the mirror. The people you condemn as “envious class warriors” are the workers who actually build the wealth. The real looters are the private equity managers who buy a profitable company, load it with debt, pay themselves a dividend, and leave the carcass. The real cheats are the CEOs who do stock buybacks with tax-cut windfalls, inflating share prices to enrich themselves while wages stagnate. The real welfare queens are the hedge-fund managers who pay a lower tax rate than their secretaries. You have become the very parasite you swore you were fighting.

We are not asking you to apologize for success. We are asking you to stop pretending that your success is entirely your own doing, and to stop fighting every attempt to make the system fair. You claim to love competition, yet you scream bloody murder at the mere suggestion that you compete with the rest of us for public resources. You claim to love freedom, yet you use your wealth to buy politicians who write rules that protect your monopoly and criminalize the poor. You claim to be a builder, but your legacy is a society more unequal than at any time since the Gilded Age, with working people unable to afford housing, health care, or education. Look in the glass: you are the robber baron, the rentier, the aristocrat who inherited a gamed system and now calls it merit. And history, which has seen your type before, knows what happens next.

When to use: for the true believers who cannot be reached; this is for the people watching, a cathartic indictment that pulls no punches while staying within the guardrails.

DEFCON 1 — Nuclear Satire

Welcome to the Billionaire Protection Racket, the greatest show on Earth. Step right up and behold the magnificent billionaires, those delicate, endangered flowers of the economic savanna, who must be shielded from the slightest breeze of taxation lest they wilt and die, taking all civilization with them. They are, we are told, the Atlas who holds up the sky, the Prometheus who brought fire to mankind, and if you ask them to chip in a tiny fraction of their staggering, exponentially compounding, tax-free wealth, they will flee to Florida, and the sky will fall.

It’s a protection racket dressed in the language of the Econ 101 textbook: “If you tax success, you’ll get less of it.” Never mind that the top marginal tax rate in the 1950s was 91 percent and the economy boomed; never mind that the Nordhaus study ended before the platform monopolies existed; never mind that the productivity-pay gap is a yawning chasm. No, we must bow before the gospel of the “job creator,” who in reality is a corporate vampire draining the lifeblood of the labor force through wage theft, union busting, and the systematic export of jobs to jurisdictions where workers have no rights. His “innovation” is the algorithm that squeezes another second of productivity out of a warehouse drone while the drone’s children go hungry. His “risk” is the chance that his stock options might be worth only $900 million instead of a billion.

And the tax code? It’s a masterpiece of legalized plunder. Unrealized gains—the mother lode of billionaire wealth—are never taxed. Instead, the plutocrat borrows against his shares at 2 percent interest, lives like a sultan, and the loan, because it’s debt, is tax-free. When he dies, his heirs get the stock at its current market value, wiping out the capital gain. The result is an effective tax rate that would make a medieval peasant weep with envy. Meanwhile, the single mother taking the bus to her second job pays payroll taxes on every dime. Her “fair share” is extracted at gunpoint by the IRS; his is deferred until the heat death of the universe.

This isn’t economics. This is a mafia state run by the oligarchs, with the complicit consent of a political class that feeds at the same trough. The spectacle of a Ken Griffin threatening to move jobs because a mayor dared to note the size of his apartment is a feudal lord shaking his fist at the serfs: One more word and I’ll take my castle elsewhere. The answer to that threat is not appeasement. It is to call it what it is—economic terrorism—and to reply that we will tax the wealth regardless of where it parks itself, because the wealth was built on our roads, our research, our legal system, our subsidized labor force, and we are taking it back.

When to use: for the reader who needs to hear the moral indictment in the language of the prophets, with the fire of scripture and the cadence of the Black church—fire with a few sharp, earned profanities.

DEFCON 1+ — Prophetic Indictment

Thus saith the prophet Amos: “They sell the righteous for silver, and the needy for a pair of sandals—they who trample the head of the poor into the dust of the earth and push the afflicted out of the way” (Amos 2:6-7). The prophet was speaking of eighth-century BCE Israel, but the indictment has the terrible immediacy of a breaking-news alert. Trampling the head of the poor into the dust. That is not hyperbole. That is the exact economic logic of a system in which the net worth of America’s billionaires has grown by $1.8 trillion since 2020 while real wages for the bottom 80 percent have barely budged. The head of the poor is being trampled every day, and the motherfucking nerve of peddling your entrepreneur hagiography as if the tramplers earned the right to do it is an obscenity before heaven.

Hear the word of the Lord, from the Gospel of Matthew, chapter 25: “I was hungry and you gave me no food, I was thirsty and you gave me nothing to drink, I was a stranger and you did not welcome me, naked and you did not give me clothing, sick and in prison and you did not visit me.” And they will say, “Lord, when did we see you hungry or thirsty or a stranger or naked or sick or in prison and did not take care of you?” And he will answer them, “Truly I tell you, just as you did not do it to one of the least of these, you did not do it to me.”

You call yourselves Christians. You invoke family values and the sanctity of life. But when your tax policy starves the hungry, denies healthcare to the sick, and locks up the poor, you are doing violence to the very Christ you claim to follow. Your wealth is dross in the fire, your philanthropy a whitewashed tomb—a tax-deductible public-relations exercise that masks a machine designed to extract the maximum possible surplus from the bodies of the working poor. This is a rigged game, and you are the fucking house, and the house always wins by design. Jeremiah cried out against those who say “Peace, peace,” when there is no peace (Jeremiah 6:14). You say “prosperity, prosperity,” but the prosperity is for a handful, and for the many it is a slow social death.

The lexicon of moral disgust has a word for what you have become. The prophet Isaiah spoke of a people whose silver had become dross, whose wine was mixed with water (Isaiah 1:22). Your silver is dross. Your moral capital is counterfeit. And the cup of trembling that you have filled for others will be poured out upon your own heads, because the arc of the moral universe is long, and it bends toward justice, but it does not bend on its own. It bends because the witness-bearing remnant rises up and breaks the jaws of the wicked, and you, in your penthouse sanctums, are the wicked.

Your wealth is a goddamn monument to theft. And the judgment is already at the door. Repent, do justice, or get the hell out of the way, because the bill is coming due, and you fucking ghouls know it.

When to use: the ultimate catharsis, the all-out, profane, take-no-prisoners release for the reader who has had enough of the sanctimonious billionaire defense; swear like the situation demands.

DEFCON 1++ — Profane Scorched-Earth (The Cathartic Apex)

Oh, fuck all the way off with this “they earned it” horseshit. You’ve got a goddamn nerve peddling that fairy tale while the rest of us are working two jobs and still can’t afford rent, while the warehouse worker who ships your bullshit Amazon packages is pissing in bottles because the company won’t let her take a bathroom break, while the gig-economy driver you call an “independent contractor” is sleeping in his goddamn car. You want to talk about “earned”? Nothing about Jeff Bezos’s $200 billion fortune is earned. It’s extracted—from the muscles and minds of hundreds of thousands of people who got a tiny fraction of the value they created, while the rest was siphoned upward through a tax code that is a monument to legalized theft.

Here’s the reality, you mealy-mouthed apologists for oligarchy: the fucking scam works like this. A company gains a monopoly position—using network effects, predatory pricing, and a small army of lobbyists—and then it squeezes its workers, its suppliers, and its customers until they scream. The “profit” is recorded as stock appreciation, which the founder never sells, so it’s never taxed. Instead, he borrows against it at near-zero interest, living like a goddamn emperor on debt that will never be repaid because, when he dies, his heirs will inherit the stock at its current value and—poof—the capital gain vanishes like a fart in the wind. And then he has the motherfucking temerity to lecture us about “incentives” and “job creation.” Motherfucker, the only job you created was for the accountant who figured out how to pay less tax than the janitor who scrubs your toilets.

Ken Griffin bitches about a video showing his apartment? His apartment costs more than the entire city budget of the town I grew up in, and he’s threatening to take his ball and go home? Fuck him. Tax his hedge-fund income at the same rate as labor. Tax his unrealized gains, and if the market crashes and he’s underwater, tough shit—real people lose their houses and nobody sends them a refund. The “wealth tax would force him to sell” argument is a goddamn lie. If you have to sell 5 percent of your stock to pay your taxes, you’re still a billionaire, you whiny, privileged asshole. The rest of us sell 100 percent of our labor every week just to eat.

And spare me the fucking “social murder” sermon. A CEO gets murdered, and that’s a tragedy, and the people who glorify it are sick. But using that murder as a shield against any critique of the healthcare industry that denies life-saving care to millions is obscene. The real social murder is the 45,000 Americans who die every year because they can’t afford insurance, while UnitedHealth posts tens of billions in profit and its executives cash out hundreds of millions in stock. That’s structural violence, you fucking ghouls, and you don’t get to deflect by saying “but Engels.”

The whole rotten enterprise is a protection racket for the rich, and the so-called “free market” warriors are the capos running the protection. They want you to believe that taxing the billionaires will destroy the economy, but the real destruction is the one that’s already happened: hollowed-out communities, a generation buried in student debt, a planet on fire while ExxonMobil buys another senator. The only thing that’s going to be destroyed if we pass a wealth tax is the fantasy that this fucking system is fair. And good fucking riddance.

Receipts? Here’s your goddamn receipt: the Federal Reserve says the top 1 percent own 31 percent of the wealth, the bottom 50 percent own 2.8 percent. The productivity-pay gap, per the Economic Policy Institute, shows that workers generated 62 percent more output while their pay barely moved 17 percent. The IRS data on the “tax gap” shows that the wealthy underreport billions in income every year. Don’t tell me they “pay their fair share” when the entire apparatus is built to make sure they don’t. This isn’t populism—it’s a coroner’s report on a class war that’s been going on for forty years, and the only side winning is the fucking parasite class.

So take your “entrepreneur” hagiography and shove it up your ass. The people who actually build the world are the ones who show up and do the work. They’re the ones who deserve the rewards, and they’re the ones we’re going to fight for—by any means necessary that do not include the violence their side already uses against the poor every single day. Fuck the billionaires. The bill is due, and we’re coming to collect.

The Deeper Breakdown

Who actually benefits from the “billionaires are job creators” storyline, and by what mechanism?

The beneficiaries: The small class of people whose wealth is tied up in corporate equities—primarily founders, top executives, and large shareholders. The central mechanism is the “buy, borrow, die” strategy: they accumulate wealth as unrealized capital gains, borrow against those gains tax-free to fund their lifestyle, and pass the assets to heirs at a stepped-up basis that erases the entire capital gain. The financial-services industry also benefits from managing these fortunes and arranging the tax-avoidance structures.

The cost-bearers: The working population, whose wages have stagnated as labor’s share of national income has fallen. Public services suffer because the ultra-rich’s effective tax rate is far lower than that of median earners; the government forgone revenue that could fund healthcare, education, and infrastructure.

The receipts that prove it:

• Productivity-pay gap. The Economic Policy Institute’s analysis (updated 2023) shows that from 1979 to 2020, net productivity increased 61.8 percent, while the typical worker’s compensation—wages plus benefits—rose only 17.5 percent. The gains went to capital owners. This directly contradicts the claim that innovations broadly raise living standards.
• Wealth concentration. Federal Reserve Distributional Financial Accounts (Q4 2023) show the top 1 percent holding 31.4 percent of total household wealth, while the bottom 50 percent hold 2.6 percent. The wealth share of the top 1 percent has risen steadily since the 1980s.
• Tax avoidance. ProPublica’s “Secret IRS Files” (2021) revealed that the 25 richest Americans paid a true tax rate of only 3.4 percent from 2014 to 2018, because their wealth consists of unrealized capital gains. Jeff Bezos paid zero federal income tax in 2007 and 2011; Elon Musk paid zero in 2018. They use “buy, borrow, die” strategies to avoid taxation entirely.
• Monopoly profits. Research by Jan De Loecker, Jan Eeckhout, and Gabriel Unger (Quarterly Journal of Economics, 2020) finds that aggregate markups in the U.S. have nearly tripled since 1980, from 21% above marginal cost to 61%. These monopoly rents largely accrue to shareholders, not workers.
• Nordhaus study limitations. The oft-cited Nordhaus (2004) study covers 1948–2001, a period before the platform monopoly era, the explosion of intangible assets, and the rise of buybacks. It measured the fraction of total social gain captured by the innovator in a stylized model, not the actual distribution of profits from modern rentier capitalism.

Missing information: The piece does not address the enormous public investments—in research, infrastructure, and legal frameworks—that underpin private fortunes. Nor does it acknowledge the regressive nature of the current tax system for the ultra-wealthy, who face an effective rate that is lower than that of many middle-class households.