The private space race really accelerated recently as two of the world’s wealthiest men test drove their spaceships for the first time. Jeff Bezos followed quickly behind Richard Branson by briefly leaving the planet, boldly affirming the quality of their respective pet projects. The third of this group, Elon Musk, has disclosed he has secured a ticket to space but aboard of Branson’s rocket instead of his own. Achieving manned space flight brings excitement and momentum to the burgeoning industry as well as incredible marketing for their respective brands. SpaceX, Blue Origin and Virgin Galactic offer dreams of space tourism and the former two hope to develop multiplanetary communities. Building an infrastructure and supply chain for industry, transportation and space living is ambitious but it may be worthwhile for the world’s richest men. Space may be the final frontier for escaping the wealth tax proposed by US democrats.
The Ultra- Millionaire Tax Act is being offered here on Earth by Elizabeth Warren and several other Democrat lawmakers, including Bernie Sanders. This bill is the latest attempt by progressives in Washington to expand the federal budget and provide “free” services to citizens (and likely non- citizens). The proposal would pay for such necessities as beefing up the IRS to go after wealthy taxpayers, pumping more money into the public education system and providing childcare. Warren can be counted on to point out that it is unfair that wealthy Americans became wealthier during a pandemic and that they should dutifully pitch in a bit extra. Commonly, liberal officials in DC tell us that wealthy individuals and large corporations pay nothing in tax or that they just need to pay their fair share.
The proposal would raise $3 Trillion dollars over a decade to fund various progressive government programs and wealth transfers. The extraction of 2% of wealth above $50M and then an additional 1% on wealth above $1 Billion in personal wealth would be imposed annually. “Pitching in a little extra” would be a minimum of $19,000,000 in tax of wealth on top of taxes on earned income for an American billionaire. Fortunately, these people will also apparently be funding an expansion of the IRS to add large groups of agents to verify the value of their worth year in and year out. Also, the affected are not entitled to a refund if your assets decrease in value. This tax will be so fundamentally in opposition to the current notion that you must earn income for it to be taxable. This doesn’t matter though because the wealthy don’t deserve the assets they accumulated (see Marx for further detail).
So why accelerate their space projects? Aside from Bezos and Musk owing $6B and $5.3B per year respectively, the bill comes with a nasty penalty for denouncing your US citizenship. The Ultra- Millionaires Tax Act calls for a 40% forfeiture in order to declare yourself not a US citizen and excuse your assets from being ringed out for cash annually. Therefore, if you cannot escape this incredible overreach of government on Earth, I propose that an ultra- wealthy American that is already building an aerospace company might go to space permanently. This seems to be a loophole in the proposed bill as the IRS cannot possibly pursue a tax avoidance case on the moon.
The scheme works in multiple ways and would be able to help many other very wealthy and successful US citizens. First, this endeavor would take large capital infusions into private companies. The founders would bring down wealth as they sell stock of public companies and pay capital gains taxes. The transfers to privately held companies (Virgin Galactic being an exception) would also provide a more difficult task for IRS agents charged with determining the value of non- publicly traded firms. Shortening the ramp towards a viable multiplanetary society would likely also require more capital than the founders have available to reasonably deploy. This would allow for other ultra- wealthy Americans to participate in the funding of Blue Origin and SpaceX. These willing investors will likely begin to see the similar benefit as the Bezos and Musk. Not only would the other independent investors help secure their spot in the Exodus, but they would also bring considerable advantages to the development of space communities.
Once the wealthy escape to their Tax Haven among the stars, they will need to develop basic societal needs (procuring food, water, housing) but also complex systems of protecting their assets from the terrestrials. Luckily, these people are the single greatest creators of value in human history as evidenced by their accumulated net worth. Among the group of our financial elites are pioneers of fintech, ecommerce – supply chain and logistics, cloud computing, telecommunications and online communications. Increasingly, the wealthiest individuals seem attracted to crypto currency assets. They have done a good enough job of keeping the grubby hands of the US Senate off their money this long, surely these guys can come up with a lasting transferrable store of value for the Moon.
The government will be upset to have lost their additional revenue stream, but they do win in one sense. A stated goal for the wealth tax is that by applying the levy, income disparity in America will shrink. Lawmakers are relying on the notion that this level of financial unfairness will persuade large swaths of the public that taxing asset values is worthwhile. With some of the richest people leaving Earth, the wealth delta will be greatly dissolved. In addition, many people who loathe the rich will be happy to see them detach from society. Many who still claim to believe in American capitalism love to cheer on the billionaire entrepreneur story until they one day become the head of some illuminati- adjacent society. For Bezos’ troubles, nearly 200,000 people signed a petition to not let him return from his first voyage.
As one who believes that wealthy individuals currently pay most of the federal income tax in United States and their corporations pay large sums of state, local, payroll, and sales/ excise taxes, I say Godspeed. Income tax started in America with only a select few funding government revenues under the same argument as this Ultra- Millionaires Tax Act. Crossing beyond the threshold of earned income for a tax basis could always be pushed downward into lower levels of wealth. A robust IRS that chases around billionaires and their diverse portfolios may one day find the low hanging fruit of everyday Americans’ retirement savings. Unfortunately, middle class Americans would never be able to attempt such a daring escape.