Friday, February 14, 2014

Love in Tom Perkins' 1% War

It looks like love.

But love of what, or for whom?

Tom Perkins is the highly-educated, incredibly wealthy, and extraordinarily egotistical entrepreneur who wrote the infamous letter to the Wall Street Journal in which he compared society's hatred of America's One Percenters to the Nazi pogrom against Jews on Kristallnacht.

After a miniature firestorm erupted over his short little tirade, Perkins apologized for recklessly sensationalizing his opinions with an insensitive reference to the Holocaust, but he came roaring back into the public's consciousness last night during a forum dubbed "The War on the 1%" at the Commonwealth Club of California in San Francisco.
Tom Perkins on February 13 in San Francisco
Admittedly, some of Perkins' opinions are relatively easy to accept.  For example, he believes that taxation itself isn't necessarily punitive, but excessive taxation is.  Shouldn't most of us, regardless of our tax bracket, be able to agree with that sentiment?  Of course, Perkins used the term "persecution" instead of punitive, which is an inflammatory twist designed to capture his audience's attention.  While it is understandable for a person who has worked so long and so successfully for the money he has to detest a governmental hand dipping deeply into his bank accounts, one would have hoped Perkins learned his lesson with exaggeration and the misappropriation of misery.

Kristallnacht violated the civil rights of Jews, and that's no exaggeration, but the right not to taxed punitively isn't exactly a civil right.  Even taxation rates upwards of a whopping 94% during World War II - the highest they've ever been in the United States - weren't enough to erode the civil rights of wealthy Americans.  But times are different now, and it would be difficult to justify any tax rate of that magnitude.

Today, the highest tax bracket is around 40%* for people earning $400,000 or more per year.  That's probably still a bit steep, but punitive?  Unfair, maybe.  Yet certainly not any sort of persecution.

Of course, for that kind of a tax rate, and the corresponding amount of raw dollars it digs out of One Percenters' income, billionaire Perkins opined last night that if he and his peers are going to be forced to comply, they should be politically rewarded.  He thinks wealthy taxpayers should be rewarded with, oh, say, one million votes for every million dollars they pay in taxes.  At first, when he said that, his audience laughed, perhaps hoping that he was only joking.  Afterwards, however, he tried to clarify his remarks to head off another PR gaffe by postulating that since so few Americans pay any income taxes, "we've gotten ourselves into a mess."

Perhaps Perkins' view comes from an updated version of "no taxation without representation," since the people who are purportedly funding a disproportionate amount of our government comprise a single percentage point of the population at large.  Some of this concern over taxation is based on the snapshot statistic that something like 47% of American voters don't pay any taxes.  However, such a percentage doesn't reflect the retirees who've already paid income taxes their whole working lives, the discounts middle-income families get even while they pay other taxes, and the fact that the lower down the income ladder one gets, the greater the tax burden relative to cost-of-living indices.  True, when it comes to income taxes, it would be nice if all taxpayers had some "skin in the game," but it's also true - at least according to the Bible - that "to whom much is given, much is required."

One Percenters fomenting fear about taxes causing them some sort of crisis sounds like the flip side of the class war they blame left-wing liberals of staging.

Sour grapes sound equally bad to the middle class, whether they're coming from the poor folks at the bottom who complain that the government isn't doing enough for them, or the rich folks at the very top, who assume that everybody else wants their money.  And it doesn't help matters that even the income for the top 1% of Americans, while very high, pales in comparison to the uber-wealthy .01% of Americans, which is the stratospheric orbit in which Perkins lives - and from which he grouses about the other 99.9% of us.

Meanwhile, what's overlooked in all of this are some of the other comments Perkins made in his original letter to the Journal.  You may not be aware that new urbanism, the reigning fad of millennials and thirtysomething tech wiz kids, has driven young Silicon Valley employees into San Francisco proper.  And the already expensive, liberal, and stratified city has found itself embroiled in a fresh round of class warfare.  Big luxury coach buses leased by distant tech firms lumber through San Francisco's storied streets to ferry employees living in the city's cramped residential neighborhoods out to the sprawling corporate campuses of Google and other billion-dollar businesses.  Tech employees have practically priced themselves out of San Jose, and now they seem to be pricing everybody else out of San Francisco, and the locals - a hardy band of disestablishmentarians, gay rights activists, and socialists are livid.

It is in this unexpected civic cauldron that Perkins maintains his primary residence, and apparently, he sees what's taking place in San Francisco as representative of what's happening all across the United States.  Small gangs of radical locals protest the tech employees on San Francisco's streets, and have picketed some of those luxury coach buses.  Perkins is horrified at the acrimony being vented towards young, highly-paid strivers by a bunch of people he presumes are layabouts and handout-takers, and his misperceptions are creating for him the specter of mass, forcible revolt by the unwashed masses from sea to shining sea.

Oh - and there's also the bit about some supposedly "libelous and cruel attacks" in one of the local newspapers against his ex-wife, the author Danielle Steel, who also lives in San Francisco, and for whom Perkins apparently still carries a torch.  Somebody in some public context called the wealthy writer and prolific philanthropist a "snob," and Perkins angrily wonders if such temerity against "our number-one celebrity" represents a "dangerous drift" for "'progressive' radicalism.'"

Frankly, it simply sounds more like lovers remorse on the part of the divorced Perkins, doesn't it?  Living the single life as an aging billionaire in a luxurious penthouse apartment in the City by the Bay...

Today is Valentines Day, after all.  Perhaps we should be heartened that romance of the interpersonal variety may still be alive and well in Perkins' heart, considering his valiant defense of Steel in the Journal.

Otherwise, it'd be too easy to suppose that his love is all for money.

And we know what that's the root of, don't we?

*FYI:  Don't assume that Perkins is paying 40% of his income every year in taxes.  Consider this perspective from Bloomberg's Barry Ritholtz:

"The superwealthy pay lots of taxes in actual dollars. On a percentage basis, though, not so much. Indeed, the wealthier you are, the more likely the bulk of your income comes from capital gains. These are taxed at about half the rate of wages and salary for a comparable high earner."

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