Ever since the PowerMonsterMegaBall hit $1.6 billion, “Lottery Mike,” a highly fictionalized version of myself who becomes an overnight billionaire, has been a pre-occupation. What would Lottery Mike do with all that money?
Had Lottery Mike hit that number (and the person who did hasn’t cashed it in yet, btw) the cash-out-worst-case-option would have been a check for about $980 million. That’s more money than I could spend in what’s left of my life. That includes all the money I’d spend to extend my life. Lottery Mike could have very well ended up a sentient head in a jar.
This is a fantasy hardwired in many of us, raised on the promise of an America that I’d like to think still exists but have seen little evidence to this point.
So when I heard about a Democratic proposal to establish a new marginal tax rate of 70 percent, my first thought was, “How will this affect Lottery Mike?”
Lottery Mike does not exist. But my instinct was to view this policy through his eyes. Oh my God, Rep. Alexandria Ocasio-Cortez wants to take away 70 percent of Lottery Mike’s winnings. That’s neither true or fair.
I did the math. I did it simply rather than accurately. If I were taxed 70 percent of $1.6 billion (and here’s where the simple/accurate bit comes in: I didn’t account for the first $10 million which would be taxed at a much smaller rate), I’d get a check for $480 million. Again, more money than I could spend in my lifetime.
So I think Lottery Mike would be okay with it. Especially since Lottery Mike doesn’t exist.
But part of what it means to be an American is to believe that Lottery Mike might one day exist.
And it is for that reason that a lot of people who will never, ever be affected by the top marginal rate no matter what percentage it is, are against the idea of a 70 percent tax rate. They got Lottery Mikes too.
You keep Lottery Mike’s hopes and dreams as close to your heart as you keep your own because you don’t want to wake up one day a billionaire and get caught flat footed. So when the real world shows you a scenario in which your wildest daydreams get a 70-percent cut, it feels real. It doesn’t feel hypothetical. But really, you’re just imagining up money. Imagine up a little more.
While you’ve got your imagination caps on, imagine what our society could look like with a fully funded public education system, without young people saddled with a lifetime of student loan debt, with cleaner air and water, with better roads and infrastructure, with funding for arts and humanities. When we had a top marginal rate of more than 80 percent, we went to the moon. We built the interstate highway system.
Pundits and politicians will squeal about it. They’ll complain. They’ll try to make you think you’re going to have to give up 70 percent of your income to the gubmint. They know better. They just can’t sell their greed to the public. That’s why they have to lie to you about it. They want you to pity poor Lottery Mike. They want you to believe you’re just a temporarily embarrassed millionaire who is one Republican vote away from opening up the opportunity that’s going to turn it all around for you.
But in the meantime, you don’t want to change the rules for rich people. — not when you’re so close to being one yourself one day.
Lottery Mike is a fantasy. He’s not a basis for sound economic policy. He’s not a lens through which one can see things as they are. You can’t make policy based on how it will affect Lottery Mike when real-life people are suffering.
So real-life Mike and Lottery Mike both support the idea of a 70 percent top marginal rate for income in excess of $10 million. If that makes you less likely to work hard and earn money then I question your motivations (and your understanding of marginal tax rates). In the meantime, everyone can benefit as we move forward together. We just have to give up worrying about how Lottery Mike is going to get by on $480 million.