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It’s been a full decade now since I first predicted — warned, to be a bit more precise — that America would have its first trillionaire before 2040.
I stand by that warning today. Unfortunately, everything I said ten years ago has aged well. Too well. I explained back then how tax policy was supercharging the accumulation of obscene fortunes in America. Policymakers, I noted, had lifted the lid on wealth accumulation by decreasing taxes on inheritances and income from capital. That policy failure would go on to become substantially worse in 2017 with the passage of the Tax Cuts and Jobs Act.
Others would see this same ominous trend. In an interview with CNBC, several experts recognized the distinct possibility the world would have its first trillionaire by 2039, the year CNBC would turn 50. They offered various explanations for how that would happen, with most of them agreeing it would “take several Bill Gates-like successes from one individual to reach the trillion-dollar mark.”
I saw things differently, telling CNBC: “It might take the founder of five of today’s Microsofts to reach a trillion, but we’re going to see larger and larger Microsofts.”
More recently, the idea that a larger Microsoft would deliver our first billionaire has gained traction. Three years ago, USA Today reported on predictions that Amazon would raise Jeff Bezos’ wealth to trillionaire level as early as 2026.
Those predictions have turned out to be a bit aggressive — Bezos’ wealth climb has leveled off — but they may have been beneficial in an odd way. Historically, far too many Americans have looked at billionaire wealth the way they look at sports, as I noted in 2014:
The super-rich are setting new records, $10 billion, $50 billion, and soon enough $100 billion. Rather than objecting, our nation celebrates the increasingly obscene fortunes of the super-rich as we do athletes breaking sports records.
Reaching $1 trillion will be what hitting 73 home runs was before we knew Barry Bonds cheated to get there.
Will our first trillion-dollar fortune also be tainted by misdeeds of the achiever? Could that be what finally wakes us from our slumber?
In 2020, with Americans dying in large numbers from the pandemic, Bezos had become to billionaire wealth hoarding what Barry Bonds had become to home run records. As noted by USA Today, the reporting on Bezos becoming the first trillionaire occurred when Amazon workers were publicly protesting over safety issues.
Which caused the appropriate response to his predicted trillionaire status — anger — at least on Twitter. One tweet disdainfully noted: “Jeff Bezos will sometime in the near future have more money than the Netherlands. Totally normal. Nothing out of order here.” Another considered a headline announcing Bezos’ impending trillionaire status the most “disgusting and disturbing” he’d seen.
The reaction to trillionaire talk three years ago, unfortunately, may have been an anomaly, not the turning point I hoped it would be.
A case in point: The Motley Fool, a financial and investing advice company, has recently been promoting investment in a corporation it suggests could be as large as 17 Amazons, with a market capitalization of $17 trillion, an accumulation that would create the world’s first trillionaire. The promotional material doesn’t give the name of the corporation. To find it, you’d at least need to provide an email address, which would mean lots of unwanted promotional emails. Apparently, this corporation has technology that could supercharge artificial intelligence, or AI.
But the identity of that corporation — or the founder who stands to become the first trillionaire — isn’t the point here. After all, absent significant reform of America’s tax policy, we will see our first trillionaire, probably not much more than a decade from now.
Worse, too many folks may think that would be a good thing. In its promotional ad, Motley Fool gushes over how excited the prospect of a $17 trillion corporation headed by a trillionaire has investors, as if the super-rich becoming richer rates as a good thing in and of itself.
Most troubling: Motley Fool is using the prospect of someone achieving a net worth over $1 trillion as a selling point. This sort of advertising works because we have millions of investors out there who emulate the billionaire class.
Which brings us back to tax policy. Halting, then reversing, the obscene concentration of wealth in America will require Americans in overwhelming numbers demanding real tax reform. Without that tax reform, the concentration of wealth will worsen and, before we know it, we’ll see the arrival of our first trillionaire. And as our concentration of wealth worsens, the political power of billionaires will only continue to increase.
We’ll never have the collective mentality, as a nation, to take on the ultra-rich if millions of Americans identify with them and see the chase to become the first trillionaire the same way they see a football team’s pursuit of an undefeated season. We see this same identification in the response of everyday Americans to estate tax reform. In large numbers, many Americans oppose the estate tax because they think it will apply to them one day.
To be sure, many Americans do understand the perils of concentrated wealth. But to make real progress on tax reform, we need more than a bare majority of Americans opposing extreme wealth concentration and supporting higher taxation of the rich. We need to reach the point where for every average American citizen who sees billionaires as role models, another ten see them as the wealth hoarders they are.
Which means we should be fearing, not cheering, the prospect of an American trillionaire.
BOB LORDBob Lord is Senior Advisor, Tax Policy at Patriotic Millionaires and an Institute for Policy Studies associate fellow.Full Bio >
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God, money and Dairy Queen: How Texas House investigators secured the impeachment of Attorney General Ken Paxton
May 29, 2023
May 28, 2023
"God, money and Dairy Queen: How Texas House investigators secured the impeachment of Attorney General Ken Paxton" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.
A nefarious kitchen remodel and an extramarital affair. Alleged corruption and threats. God, money and Dairy Queen.
Those were among the many details of now-suspended Texas Attorney General Ken Paxton’s alleged misconduct that were aired on the floor of the Texas House on Saturday ahead of a historic vote to impeach the state government’s top lawyer.
Paxton had faced few political consequences for years for his many public scandals. Allegations against him included taking bribes from a real estate investor, trying to protect that same investor from legal action, abusing the powers of the office and firing staff members who reported his misconduct.
But after Paxton’s office asked lawmakers to use taxpayer dollars to pay a $3.3 million settlement to the whistleblowing staffers, the scandals proved too much for the Donald Trump-backed attorney general to shake off.
“No one person should be above the law,” state Rep. David Spiller, R-Jacksboro, a member of the House Committee on General Investigating, told his House colleagues on Saturday.
“We should not ignore it and pretend it didn’t happen,” he said. “Texas is better than that.”
The impeachment charges centered on Paxton’s entanglement with Nate Paul, an Austin real estate investor whose relationship with Paxton as a friend and political donor had caused several of his staff members to report him to federal authorities and prompted an FBI investigation — which Paxton allegedly refused to help law enforcement with. Paul was fined more than $180,000 and ordered to serve jail time by a state judge after he was found in contempt of court earlier this year.
“All roads lead to Nate Paul,” state Rep. Ann Johnson, a Houston Democrat and vice chair of the investigating committee, told the chamber before outlining Paxton’s yearslong relationship with his friend.
Members of the House committee that investigated Paxton said they believed he broke the law by using the agency to serve the interests of Paul, from whom he allegedly took bribes — including when the real estate developer was sued for fraud.
Eight top deputies from Paxton’s office reported him to federal authorities almost three years ago, alleging he had misused his authority to help Paul with a fraud lawsuit from the Austin nonprofit Roy F. & Joann Cole Mitte Foundation.
Spiller said Saturday that Paxton demonstrated an intense desire to help his friend with the lawsuit against the advice of his deputy attorney general. In return, Paxton allegedly received bribes and favors from Paul — from home remodeling to hiring a woman with whom Paxton had an affair.
In one now-infamous story, Paxton allegedly accepted $20,000 worth of countertop materials from Paul through contractors renovating his home in Austin.
Johnson said they learned of the story after talking to a “young man” who worked at the AG’s office. The employee, Johnson said, once observed Paxton and a contractor discussing a remodel. During the exchange, Johnson said, the contractor said he needed to “talk to Nate” before proceeding with a change to the kitchen countertops.
“This young man is disturbed” by the interaction, Johnson said as she retold the story. “In fact, he is crushed by it. He believes Ken Paxton is one of his heroes.”
The employee eventually turned down a promotion and then quit the office. But he allegedly continued to receive money from Paxton’s campaign for a few months after, Johnson said, implying that the monthly $250 checks were Paxton’s attempt to keep the young man quiet. She said the former staffer called the campaign to tell them to stop sending the money and sent it back.
Earlier in the week, a Paxton aide tried to cast doubt on the investigation by disputing the materials of the countertops involved in the home remodel. Paxton and his supporters also attempted to undermine the report by claiming that the allegations were largely made by “political” appointees — an assertion that House committee members swiftly shot down Saturday.
Committee members also claimed that Paul helped Paxton maintain his affair with a San Antonio woman by giving her a job at Paul’s company in Austin. It made her “more convenient” to Paxton, Johnson said.
Johnson claimed that a distraught Paxton once bemoaned his continued love for the woman he was having an affair with to his staff, who were gravely concerned that it was improper and could open the attorney general’s office to blackmail. Exposure of the affair, Johnson said, would have risked Paxton’s reputation as a “Christian man” who cherishes “family values” with his political base.
“He has an interest in attempting to keep this affair quiet,” Johnson said. “He also has an interest in continuing it.”
The attorney general’s wife, Angela Paxton, is a state senator. She learned of the affair four years ago, causing the couple to go on a brief break, according to testimony from the lead counsel for the investigating committee, Erin Epley.
“The affair is important because it goes to Ken Paxton’s political strength,” Johnson said. “In fact, when the affair comes out, there are a couple people in the office who say, ‘I can’t work for you.’”
In another shocking claim from the investigating committee, state Rep. Charlie Geren, R-Fort Worth, said that less than an hour after the committee report recommending impeachment was released on Wednesday, Paxton began calling House members attempting to intimidate them into voting against impeachment.
“I would like to point out that several members of this House, while on the floor of this House, doing the state business, received telephone calls from [Attorney] General Paxton personally, threatening them with political consequences in their next election,” Geren said.
And then there was the divinely inspired donation at a local Dairy Queen.
While Paxton was serving in the Texas Legislature as a state representative a decade ago, he became affiliated with the CEO of Servergy, a McKinney-based software company that courted him as a partner. William Mapp, the firm’s founder and former CEO, had donated to Paxton’s campaign and the two decided to go into business together.
At a Dairy Queen, the CEO reportedly said that “God had directed him” to give Paxton 100,000 shares of company stock, which Paxton argued shows the stock was a gift.
“However, documents … indicate that the stock was, again, for services,” the House Committee’s report said.
The Servergy relationship became the subject of a felony securities fraud indictment in 2015 that accused Paxton of recruiting investors without disclosing his own investment in the company or attempting to confirm the company’s claims about its technology.
According to the SEC, he persuaded five people to invest $840,000 into the company. The case is still ongoing.
The House committee’s members said they began probing Paxton’s behavior after the attorney general requested $3.3 million from the state to settle a lawsuit with the whistleblowers fired from his office after they accused Paxton of accepting bribes and other misconduct.
“There was no investigation prior to this time,” Geren, one of the committee’s five members, said on the House floor Saturday.
The settlement served Paxton by avoiding a trial that may have exposed to the public even more details of the attorney general’s wrongdoing, Geren said.
“Most disturbingly, the settlement agreement was made without prior approval of funds and obligates the Texas taxpayers — not [Attorney] General Paxton — to pay $3.3 million for his actions,” Geren told his House colleagues.
The long list of accusations against the attorney general were outlined as part of 20 charges of impeachment that the Texas House voted for Saturday — an unprecedented move that rocked the state’s Republican-controlled Legislature. The articles of impeachment include disregard of official duty, misapplication of public resources and obstruction of justice.
State Rep. Andrew Murr, R-Junction, the committee’s chair, said that a team of investigators that included experienced state and federal prosecutors and law enforcement personnel led the investigation, which the committee summarized.
Hours before a stunning 121-23 vote to impeach the attorney general, Johnson impassionately called on lawmakers to act. “God help us” if they didn’t, she said.
“If millions of Texans can’t trust us to do the right thing, right here, right now, then what are we here for?”
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Update:
The text of the legislation, titled the Fiscal Responsibility Act of 2023, is now available here.
Earlier:
Progressive economists and advocates warned that the tentative debt ceiling agreement reached Saturday by the White House and Republican leaders would needlessly gash nutrition aid, rental assistance, education programs, and more—all while making it easier for the wealthy to avoid taxes.
The deal, which now must win the support of both chambers of Congress, reportedly includes two years of caps on non-military federal spending, sparing a Pentagon budget replete with staggering waste and abuse.
The Associated Pressreported that the deal "would hold spending flat for 2024 and increase it by 1% for 2025," not keeping pace with inflation.
The agreement would also impose new work requirements on some recipients of Supplemental Nutrition Assistance Program (SNAP) benefits and Temporary Assistance for Needy Families (TANF) while scaling back recently approved IRS funding, a gift to rich tax cheats.
In exchange for the spending cuts and work requirements, Republican leaders have agreed to lift the debt ceiling until January 1, 2025—a tradeoff that House Speaker Kevin McCarthy (R-Calif.) is pitching as a victory to his caucus, which includes far-right members who have demanded more aggressive austerity.
President Joe Biden, for his part, called the deal "a compromise, which means not everyone gets what they want."
"After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors."
Lindsay Owens, executive director of the Groundwork Collaborative, said in a statement Saturday night that "this is a punishing deal made worse only by the fact that there was no reason for President Biden to negotiate with Speaker McCarthy over whether or not the United States government should pay its bills," alluding to the president's executive authority.
"After inflation eats its share, flat funding will result in fewer households accessing rental assistance, fewer kids in Head Start, and fewer services for seniors," said Owens. "The deal represents the worst of conservative budget ideology; it cuts investments in workers and families, adds onerous and wasteful new hurdles for families in need of support, and protects the wealthiest Americans and biggest corporations from paying their fair share in taxes."
The agreement comes days before the U.S. is, according to the Treasury Department, set to run out of money to pay its obligations, imperiling Social Security, Medicare, and Medicaid payments and potentially hurling the entire global economy into chaos.
House Republicans have leveraged those alarming possibilities to secure painful federal spending cuts and aid program changes that could leave more people hungry, sick, and unable to afford housing, critics said.
"For no real reason at all, hungry people are set to lose food while tax cheats get a free pass," wrote Angela Hanks, chief of programs at Demos.
While legislative text has not yet been released, the deal would reportedly impose work requirements on adult SNAP recipients without dependents up to the age of 54, increasing the current age limit of 49. Policy analysts and anti-hunger activists have long decried SNAP time limits and work requirements as immoral and ineffective at boosting employment. (Most adult SNAP recipients already work.)
"The SNAP changes are nominally extending work requirements to ages 50 to 54. In reality, especially as the new rule is implemented, this is just an indiscriminate cull of a bunch of 50- to 54-year-olds from SNAP who won't realize there are new forms they need to fill out," said Matt Bruenig, founder of the People's Policy Project.
Diane Yentel, president and CEO of the National Low Income Housing Coalition, wrote on Twitter that the agreement is "cruel and shortsighted," pointing to the work requirements and real-term cuts to rental assistance "during an already worsening homelessness crisis."
"House Rs held our nation's lowest-income people hostage in exchange for lifting the debt ceiling," Yentel continued. "The debt ceiling 'deal' could lead to tens of thousands of families losing rental assistance... Expanding ineffective work requirements and putting time limits on food assistance adds salt to the wound, further harming some of the lowest-income and most marginalized people in our country."
The White House and Republican leaders also reportedly agreed to some permitting reforms that climate groups have slammed as a boon for the fossil fuel industry. According toThe New York Times, the agreement "includes measures meant to speed environmental reviews of certain energy projects," though the scope of the changes is not yet clear.
And while the deal doesn't appear to include a repeal of Biden's student debt cancellation plan—which is currently before the U.S. Supreme Court—it does reportedly contain a provision that would cement the end of the student loan repayment pause, drawing fury from debt relief campaigners.
The deal must now get through Congress, a difficult task given potentially significant opposition from progressive lawmakers who are against attacks on aid programs and Republicans who want steeper cuts.
As the Times reported, "Lawmakers in the House Freedom Caucus were privately pillorying the deal on Saturday night, and the Congressional Progressive Caucus had already begun to fume about it even before negotiators finalized the agreement."
Amy Hanauer, executive director of the Institute on Taxation and Economic Policy, said Sunday that "it's a relief to see that congressional leaders and the president have come to an agreement to raise the debt limit and avert an economic disaster."
"But by instituting work requirements for critical assistance programs and rescinding important funding to crack down on wealthy tax cheats, this deal will rig the economy even more in favor of the most well-off Americans while failing to fix the real structural problems that led to the current debt crisis in the first place," said Hanauer. "The deal avoids the elephant in the room: it includes no new revenues even though tax cuts of the past few decades were a primary driver of deficit growth."
"And next up, many Republican lawmakers want to double down on tax cuts by pushing through many more tax cuts that would most help wealthy families and corporations," Hanauer added. "They should do the opposite."
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