Amazon founder and CEO Jeff Bezos saw his net worth grow by $9 billion in just 48 hours. That’s nine times more money than what Arizona teachers are asking for.
What Arizona Teachers Are Asking For
Arizona is currently in the midst of a statewide walkout by the state’s public school teachers, which enters its fourth day on Tuesday. Teachers are demanding not only a 20 percent pay increase, but roughly $1 billion in additional funding for K-12 schools that has been cut over the last decade as a result of recession-era austerity policies.
Governor Doug Ducey (R) has partially met teachers’ demands, offering a 20 percent pay increase by 2020 and a $371 million funding increase for schools over a five-year period. However, teachers aren’t holding their breath. Arizona Education Association President Joe Thomas told local media that details of both proposals have not been shared with educators.
“We’ve not seen a lot of trust with the legislative process, and the governor so far,” Thomas said.
According to Reuters, Arizona teachers (approximately 48,866 according to Ballotpedia) are paid some of the lowest salaries in the country, and many of the state’s estimated 2,267 schools are in disrepair. As Grit Post reported last week, teachers have to teach with history books that state George W. Bush is the current President of the United States, and some schools have maps and globes that show the Soviet Union still exists. Other Arizona teachers say dealing with mice is a daily struggle, with rodents jumping out of students’ lockers and invading classrooms.
AZ classrooms with desks that try to attack you, printers from 1997, history texts about our President George W. and maps that include the USSR. Is YOUR school falling apart? Show me. #RedForEd #beheard #AZteacherproblems pic.twitter.com/DWSoiRLWU6
— Mrs. Larsen (@LarsenChemistry) April 4, 2018
Even though $1 billion seems like a lot of money, Amazon’s Jeff Bezos made nine times that amount in just a 48-hour period last week. According to Forbes, Bezos’ net worth is now approximately $130.2 billion, largely thanks to the 78.83 million shares of Amazon stock he owns. Amazon’s stock jumped in value after the company announced it would be increasing the cost of Amazon Prime memberships to $119 per year, up $20 from the current price.
Bezos’ net worth is likely to increase significantly in 2018, as the company’s cloud business has one Wall Street forecasting firm predicting the stock’s share price to jump to as much as $1,800. All of this market activity is happening while approximately one in three Amazon employees in Arizona are paid so little they qualify for food stamps, according to The Intercept.
While it’s obviously not practical to single out Jeff Bezos and his wealth as the culprit for Arizona’s lack of K-12 education funding, the juxtaposition of the rapidly increasing net worth of the world’s richest man with roughly 50,000 striking teachers in Arizona shows how much could be gained with a potential wealth tax.
A Wealth Tax Could Provide the Funding Teachers Are Demanding
As New York University economist Daniel Altman told the New York Times in 2013, a wealth tax on assets like stocks, bonds, trusts, art collections, and yachts could feasibly replace all revenue generated from current income, estate, and gift taxes. The money generated from such a tax could easily give teachers what they’re demanding, with the world’s wealthiest still remaining far richer than most people on the planet could fathom. Under Altman’s proposal, the tax would be levied progressively, with the first $0 to $500,000 in wealth taxed at zero percent, $500,001 to $1,000,000 taxed at one percent, and all wealth above $1,000,000 taxed at two percent.
Using that system, the $9 billion in new net worth Jeff Bezos acquired would amount to $180 million in tax revenue. Taxing Bezos’ $130 billion in wealth would amount to $2.6 billion in revenue. And, hypothetically, if the combined $2.39 trillion net worth of the United States’ 540 billionaires were taxed at two percent, it would create $47.8 billion in new tax revenue.
If we were to apply the Altman tax to the estimated 9.4 million Americans with a net worth between $1 million and $5 million — and estimate a $2.5 million average net worth for all of those people — that would mean the combined net worth of those individuals would be in the neighborhood of $23.5 trillion, amounting to $470 billion in new tax revenue assuming a flat two percent wealth tax. That money makes up about 14.2 percent of the $3.3 trillion in total tax revenue the federal government collected in 2016, and comes from just the wealthiest 3 percent of the U.S. population.
To put that in perspective, the federal government spent $70 billion on the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) in fiscal year 2017, meaning just one year of taxing millionaires’ wealth at two percent could feasibly fund food stamps for more than six years.
While it’s unlikely the current Republican majority in Congress, let alone billionaire real estate mogul President Trump, would pass a wealth tax, it may be a topic that gets traction should Democrats retake both houses of Congress in November. Taxing wealth could be even more likely if organized public employees like the tens of thousands of Arizona teachers walking out continue to shut down schools due to a lack of funding.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.