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Bad Billionaires: How Dems Demonize Wealth Going into 2020

In late November, Michael Bloomberg, former mayor of New York City and billionaire, paid at least $30 million for a week’s worth of television ads in support of his presidential campaign. In a single stroke, Bloomberg spent more on ads than any of his fellow candidates have all year. Senator Bernie Sanders condemned this move and called it “just the latest example of a rigged political system that we are going to change when we’re in the White House.” This moment encapsulates the recent schism within the Democratic party, a division based on views of wealth. While candidates like Warren and Sanders loudly decry the role of money in politics and call for the ultra-wealthy to cease using money as a form of influence, billionaires Bloomberg and Tom Steyer are using their own resources to their individual political advantages. This ideological division around how money and spending should figure into politics is just the latest issue that Democrats must internally grapple with in defining a clear platform for 2020. 

This moment represents another manifestation of the centrist versus progressive debate that rages on moving into the election. Though money should not buy political influence, this normative argument may limit Democrats’ ability to regain the White House or to succeed on the same scale that Trump has in commercial venues. To completely decry the importance of big time donors could limit Democrats, who far too often subject themselves to unrealistically rigorous standards of ideological purity of such intensity and high excellency that they seem self selecting. Candidates like Warren and Sanders, the loudest wealth critics, must seriously consider the political efficacy of their anti-billionaire strategies if they want a serious shot at a presidential victory.

In an article for the LA Times, Evan Halper asserts that many Democrats have found a new target for criticism this election cycle: billionaires. He states that this stance is a shift from former behavior, when Democrats feared that criticism would alienate both aspirational Americans and big money donors. However, recent incidents of fraudulent behavior by billionaires, widespread economic inequality, and the reduced clout of mega-donors have led to the villainization of the wealthy, which is not entirely undeserved. 

Some candidates, like Warren and Sanders, have taken this characterization even further than their peers. For example, Sanders sends out campaign bumper stickers that state decisively, “Billionaires should not exist.” The Warren campaign makes mugs with “Billionaire Tears” written on them. 

However, recent events such as this October’s Democratic debate, where candidates squabbled over the question of whether billionaires should exist, have made it clear that not all liberal candidates subscribe to this thinking. This ongoing debate was evident in liberal billionaires’ responses to Warren’s proposed wealth tax, which specifically targets their large fortunes. The concept of a wealth tax in general can be viewed as quite extreme, as it goes beyond the typical income and estate taxes and, instead, taxes everything a person owns. Warren’s tax proposal seeks to levy a wealth tax on Americans with fortunes worth more than $50 million, with increasingly higher rates applied to billionaires. Halper says that Warren “takes pride in the forecast by hedge fund billionaire Leon Cooperman that a Warren presidency would send the stock market into a plunge, reposting his warning on social media to amplify her argument that the rich and powerful feel most threatened by her.” Billionaires who have been known to support liberal causes, including Bill Gates and Mark Zuckerberg, have spoken out about some of Warren’s proposals, including the wealth tax and her policies around breaking up big tech companies. According to the Boston Globe, even in Warren’s home state of Massachusetts, “Local corporate titans will tell you that Warren has become too progressive to be electable and that her unflinching support for Medicare-for-All feels more like a pipe dream than a plan.” The ultra-progressive agenda that Warren has espoused, especially her wealth tax, is in conflict with the interests of rich liberals, whose support may be needed on the path to presidential victory. This conflict is a clear diversion from President Obama’s path. Obama’s top donors in the 2012 presidential election include Jeffrey Katzenberg, chief executive of DreamWorks animation, and Irwin Jacobs, founder and former chairman of Qualcomm. Particularly in 2012, the Obama campaign actively relied on the support of wealthy donors, as contributions from everyday voters dwindled going into his second term.

Similarly, Bernie Sanders has released a wealth tax proposal that, according to Vox, goes even further than Warren’s plan in targeting the ultra-wealthy. Sanders’ plan would reduce the number of American billionaires by half within 15 years and would entirely close the gap in wealth growth between billionaires and the average American family. Sanders’ plan has more brackets for individuals and families and, when compared to Warren’s plan, leaves fewer possibilities for evasive loophole maneuvers by rich couples. NPR’s Greg Rosalsky writes that Sanders’s Tax on Extreme Wealth makes Warren’s plan “look moderate.” Rosalsky asserts that “Under Bernie’s proposal, if you’re a billionaire, and you want to get richer, you’re either going to have to be a financial genius, extremely lucky, or have really good accountants and lawyers to even just maintain your level of wealth.” He adds that, if put into place as it is designed, Sanders’s plan would “eat fortunes.” Clearly, both Sanders and Warren have made the bold goal of tackling the wealth gap in America a mainstay of their campaigns. 

Warren and Sanders are right in their characterization of the pervasive and gross levels of economic inequality in America. In the last 30 years, the top 1 percent of earners have seen their wealth triple, while the bottom half’s wealth has flatlined. The moral basis of the plans that Warren and Sanders have put out is completely sound. However, some believe thatWarren and Sanders’ big bets may not be politically sound. By alienating billionaires, Warren and Sanders may be shooting themselves in the foot by limiting the support they can receive from influential and wealthy liberal donors who may not support their proposals. Ultra-wealthy donors like S. Donald Sussman and James and Marilyn Simons have been known to donate astronomical amounts to Demorcratic candidates in recent elections. By villainizing billionaires, Warren and Sanders are limiting their ability to access this type of capital. 

This bold move by Warren and Sanders, who maintained similar views and practices in 2016 and relied entirely on grassroots donations, demonstrates how the two have decided to stand out out from the status quo going into 2020. They seem to be aiming to dismantle many aspects of the existing system, from healthcare to wealth taxes, in contrast with more mainstream candidates. Some say that the entrance of Michael Bloomberg into the race will provide Warren and Sanders with a strategically vital foil against which to demonstrate these intense ideologies. Bloomberg, a Wall Street billionaire, serves as the exact example of the wealth accumulation that Warren and Sanders constantly criticize. Perhaps his joining the race will provide Warren and Sanders with the ideological ammunition that they need in order to overcome the absence of billionaire backing that their rhetoric has produced. In an article for the New York Times, Jamelle Bouie asserted that anxious, anti-Warren billionaires speak out against her because they “want assurance that the Democratic nominee won’t be too disruptive. They want a restoration of the pre-Trump status quo, not a revolution.” This analysis encapsulates a major schism in the Democratic party, a question that extends beyond wealth taxes and billionaires to all facets of society: should the Democrats seek a revolution? Should they go with a centrist candidate, who may be “safer,” or a revolutionary force for groundbreaking change?

In recent remarks to donors ahead of 2020, President Obama commented that “everyone needs to chill out about the candidates” and urged party members not to  subject themselves or each other to tests of ideological purity that may not be helpful going into the general election. He did say, however, that he is open to the idea of higher taxes on the wealthy while also claiming that he “already pay[s] really high taxes.” These remarks relate, again, to Democrats’ modern quandary. President Obama’s legacy is romanticized by many Democrats as a prior repudiation of modern horrors. The exact question, though, is how Democrats should relate to wealth and to existing systems of power. Democratic candidates are clearly in the middle of grappling with what the best strategy for success is in the next election. Though Democrats’ ideal strategy may not be clear at this point, candidates like Warren and Sanders have made decisive claims and hedged their bets for the future of this country and the Democratic party on these bold policies.

Photo: Image via makeroadssafe (Flickr)