Why Doesn’t Bernie Sanders Try to Tax Billionaires in Vermont?
WASHINGTON, D.C. — Senator Bernie Sanders has discovered a revolutionary new principle of democratic socialism: the most effective way to redistribute wealth is to find a state where you don’t live, locate billionaires you don’t represent, and explain how wonderful it would be if somebody else confiscated their money.
The Vermont independent has enthusiastically campaigned for California’s Proposition 40, a proposed one-time 5% wealth tax on billionaires, intended largely to finance healthcare. California has roughly 200 billionaires. Vermont has historically had about one.
This makes California the perfect laboratory for Sanders’ economic theories. If the experiment succeeds, Bernie can claim victory. If it fails, he can return to Vermont, where the maple syrup is plentiful, the mountains are beautiful, and the taxpayers haven’t yet been introduced to the full cost of his imagination.
According to Associated Press reporting on the billionaire tax campaign, even California Governor Gavin Newsom opposes the proposal, fearing the departure of wealthy residents. The standoff between Sanders and Newsom has been building for months.
When Gavin Newsom believes a California tax proposal goes too far, economists generally recommend checking whether Sacramento has accidentally declared war on arithmetic.
California Billionaire Tax: Socialism Works Best When Other States Pay for It
Sanders has spent decades warning Americans that billionaires possess too much money. His solution is straightforward: take more of it. His geographic strategy is considerably more sophisticated: begin somewhere safely beyond the Vermont border.
California is an excellent choice. Its economy is enormous, its billionaires are conveniently concentrated, and its voters have spent generations proving they will consider practically any economic theory provided it arrives wrapped in enough compassionate vocabulary.
The senator’s proposal offers several important advantages.
First, Sanders doesn’t have to administer it.
Second, he doesn’t have to explain the results to his own constituents.
Third, if the billionaires leave California, Bernie can condemn their selfishness without worrying about what happens to the state’s future tax receipts.
This is the political equivalent of visiting your neighbor, recommending he burn down his garage to reduce property inequality, and then going home to enjoy your heated driveway.
A Sanders economic adviser explained the intellectual breakthrough.
“California has something Vermont doesn’t: enough billionaires to survive several rounds of progressive experimentation. It’s important to test socialism on a population large enough that the economic consequences can be blamed on capitalism.”
The arithmetic is equally impressive. California’s proposed levy would take 5% of qualifying fortunes. On a billionaire worth $10 billion, that represents $500 million. To ordinary people, that’s an extraordinary amount of money. To a socialist economist, it’s the down payment on a committee to investigate why healthcare still costs too much.
Supporters argue the tax could generate substantial healthcare funding. Critics worry that wealthy residents will move, taking investment and future tax revenues with them.
Voters haven’t helped settle it. Pollsters at the Public Policy Institute of California found thin majorities of likely voters backing Proposition 40 and also backing the two measures written to cancel it.
“Californians have told us they’d like to vote for the billionaire tax and for the thing that stops the billionaire tax,” said one pollster familiar with the numbers. “We asked twice. They said yes twice.”
Bernie considers all of this a philosophical problem. After all, if wealthy people are free to leave a jurisdiction where their assets are being targeted, how is government supposed to demonstrate that wealth belongs to everybody?
The senator has also introduced a national annual billionaire wealth-tax proposal, which technically would include Vermont billionaires. But a federal proposal and an aggressive state campaign are two very different things.
One allows Bernie to promise a nationwide revolution. The other actually puts somebody’s state economy on the operating table.
And California has volunteered to be the patient.
Vermont Billionaires: Why Bernie Won’t Experiment on the State’s Last One
Vermont’s billionaire population has traditionally been so small that a statewide billionaire conference could be held in a Subaru.
The Forbes billionaire ranking for Vermont identifies John Abele, co-founder of Boston Scientific, as the state’s lone billionaire.
That creates a serious problem for Sanders. If Vermont implemented California’s billionaire tax, there would be relatively little wealthy prey and far too many people interested in dividing the proceeds.
California can assemble an entire battalion of billionaires. Vermont has historically had to hope its billionaire answers the telephone.
A Department of Progressive Revenue official explained that targeting one wealthy resident would create unacceptable administrative complications.
“We’d have to know his name, figure out where he lives, and possibly encounter him at the grocery store. It’s much easier to tax billionaires in California, where they’re anonymous enough to serve as political villains.”
A memo circulating inside the department, obtained by this reporter, lists “identify Vermont billionaire” as action item eleven. It sits beneath “order more lanyards” and above “schedule a meeting about the meeting.”
Vermont also lacks California’s convenient supply of technology entrepreneurs, Hollywood financiers, and people whose companies are worth $40 billion despite never having produced a profit. There are only so many fortunes that can be made selling maple syrup, skiing equipment, and artisanal cheese to tourists who drive electric cars.
Sanders could certainly campaign for a Vermont-specific billionaire tax. But there is a practical concern.
What if Vermont’s last billionaire simply moved to New Hampshire?
The entire state would have to identify a new economic enemy. The Department of Revenue might be forced to classify a man with three snowplows and a profitable hardware store as an oligarch.
Vermont dairy farmer Earl Bickford expressed his concerns while repairing a tractor he had already paid for twice.
“Bernie says rich people need to pay their fair share. I bought a combine, paid sales tax, property tax, income tax, and fuel tax. Then I paid another man to fix a computer that wouldn’t let me start the damn thing. I’m beginning to suspect I’ve been paying everybody’s fair share.”
Bickford suggested a simpler approach.
“Why doesn’t Bernie bring one California billionaire here? We could tax him, sell him some maple syrup, and charge him $900 to watch us milk cows.”
The farmer’s proposal was immediately rejected by a progressive policy committee because it involved actual commerce. Minutes from the session record that the idea was tabled “pending development of a commerce-free framework,” and that the meeting adjourned after a motion to form a subcommittee on subcommittees passed unanimously.
Vermont Single-Payer Failure: Bernie’s Plan to Make California Poor Enough to Understand Vermont
There is one uncomfortable precedent Sanders doesn’t particularly need California voters discussing.
Vermont once attempted to establish a statewide single-payer healthcare system. Democratic Governor Peter Shumlin abandoned the plan after concluding its financing requirements would be too disruptive to the state’s economy.
As Vermont Public’s examination of the abandoned single-payer healthcare plan reported, the projected financing included an 11.5% payroll tax and an income-based assessment of up to 9.5%.
The program never actually operated. Its financial requirements were sufficiently alarming that Vermont canceled the experiment before sending everyone a bill.
For socialists, this was a tremendous intellectual achievement. They had successfully demonstrated that an attractive government promise could become unaffordable before the government even attempted to deliver it.
Most businesses wait until bankruptcy to discover their business model doesn’t work. Vermont discovered the problem during the presentation.
California, however, appears determined to advance the science. Its proposed billionaire levy is not the same policy as Vermont’s abandoned healthcare plan, but both illustrate the unpleasant part of government generosity: someone eventually has to explain how the checks get funded.
California economics professor Dr. Marvin Redistribution defended the approach.
“The beauty of socialism is that its supporters never consider the experiment finished. If the government runs out of money, the obvious conclusion is that it hasn’t taxed enough people.”
Asked whether higher taxes could encourage some wealthy residents to relocate, Redistribution dismissed the concern.
“That’s simply capitalism interfering with our results.”
He further recommended that departing billionaires be required to leave their net worth behind, preferably in carefully labeled containers.
California entrepreneurs reportedly have a less complicated interpretation.
“If Sacramento wants my fortune, I can move my fortune,” explained one Silicon Valley founder. “My company is mostly computers, intellectual property, and employees working remotely. I don’t have to drag a steel mill across Nevada.”
That observation identifies the fundamental inconvenience of modern wealth taxation. Money travels. Businesses relocate. Investors adapt.
Government spending, however, has demonstrated an extraordinary ability to remain precisely where it is, expanding even after the original taxpayers have departed.
For Sanders, the ideal outcome would be California collecting enormous revenues while billionaires cheerfully remain in place, continuing to invest, create jobs, and finance the programs designed to make their continued existence politically unacceptable.
It’s an elegant system. Unfortunately, it depends on wealthy people behaving with less economic self-interest than the politicians taxing them.
Wealth Tax Verdict: Vermont Offers California the Benefit of Its Experience
The debate ultimately raises a question nobody in Sanders’ political orbit seems especially eager to answer.
If taxing billionaires is the key to prosperity, why isn’t Vermont the world’s leading demonstration project?
The answer is partly mathematical. California has a much larger pool of billionaire wealth, and Sanders supports federal taxation too. But mathematics has never been the most popular guest at a socialist fundraiser.
In the Sanders worldview, economic success creates a moral obligation to surrender more money, while government failure creates a moral obligation to surrender even more. The taxpayer is responsible for both outcomes.
California can test that theory with roughly 200 billionaires. Vermont can observe from a distance, enjoying its mountains, autumn foliage, and remarkably low number of billionaires available for public humiliation.
And should California’s wealthy residents begin relocating, Sanders will undoubtedly explain that their departure proves exactly what he has believed all along.
Capitalism is selfish.
Billionaires are greedy.
And socialism would have worked beautifully if the taxpayers had simply stayed where the government put them.
The final irony? Bernie Sanders has spent a political lifetime declaring that nobody should become too rich. Now he’s campaigning in a state that actually managed to produce hundreds of billionaires, explaining how government can make better use of their success.
Vermont produced the socialist.
California produced the wealth.
Naturally, the socialist wants California to pay for both.
Five Observations on Taxing Somebody Else’s Billionaires
- Vermont has one billionaire. One. That’s not a tax base, that’s a guy. You don’t fund a health care system on a guy. You plan a fishing trip around a guy.
- California’s billionaires can move their money by lunch. Vermont’s can’t even move the snowplow out of the barn. That’s the real wealth gap. It’s mobility.
- When Gavin Newsom tells you a tax goes too far, that’s like the guy who owns the buffet telling you that’s too much shrimp. He’s seen what’s back there.
- Vermont killed single-payer because of the price tag, which is the most Vermont thing ever. They read the menu before they ordered. California’s the guy who orders the tomahawk steak, then asks where his wallet went.
- The plan only works if billionaires stay put and keep being billionaires. You’re asking people who got rich by spotting loopholes to ignore the exit sign. That’s not economics, that’s asking a cat to guard the aquarium.