Mr. Clemens on California’s billionaire tax, and the three measures it takes to vote on one
aA letter to the editor, from the desk of Mr. Samuel L. Clemens, lately of San Francisco, where I lost a good deal of money in the old days and have not yet been asked to pay a tax on it
aTo the Editor:
Sir —
I lived in California when it was young, and I can tell you that every man in the state was then a millionaire in expectation and a bankrupt in fact. I note with some professional interest that the arrangement has since reversed itself, and that a good many of the state’s residents are now billionaires in fact and, if the papers are to be believed, bankrupts in prospect.
On the third of November the people of that commonwealth will be asked whether to levy upon their billionaires a tax of five percent of everything they own, once. I confess the phrase “once” gave me pause. I have known a great many taxes introduced as a single occasion, and I have yet to meet one that did not turn out to be the first of a series. But the proponents have a point in their favor, which is that the measure says “once” and has been written down, and a thing that has been written down is at least harder to deny than a thing that has been merely promised.
The sponsors are a union of healthcare workers, who say the federal government is about to withdraw some hundred billion dollars from the hospitals and clinics and food programs of the state, and that the persons best able to make up the difference are the persons who own the most. They point out, and I think with justice, that a man whose fortune consists of shares in a company can live in great splendor without ever receiving a dollar that the income tax would recognize as income. He borrows against the shares, and he lives off the loan, and the Treasury gets nothing, for you cannot tax a man on money he has only been lent. It is a very clever arrangement, and I have rarely seen one more thoroughly enjoyed. The measure proposes to reach the fortune directly. About two hundred and fifty-five persons are expected to be affected, which is a smaller number than attends the average funeral.
Now, sir, I have also read what the opponents say, and I do not find them wholly without merit either. The fortunes of these gentlemen are not in a vault, as the cartoons would have it. They are in their companies. A man who owes five percent of a company he founded can pay only by selling a piece of it, and a man who sells enough pieces ceases to be the one who runs it. One of the research outfits that dislikes the tax has calculated that the founder of a certain delivery concern would be rendered bankrupt on the arithmetic of the measure, unless he could persuade someone that his holdings were worth less than the initiative says. Another, of the same persuasion, argues that the thing is so loosely drafted that the bill could come out far higher than five percent, which I would regard as a flaw in any tax and a catastrophe in a one-time one.
And the revenue is a matter on which no two parties agree. The sponsors say a hundred billion. The state’s own nonpartisan fiscal adviser says tens of billions and admits it cannot be more precise. A research institution of the opposing school says about forty, and that the state would be twenty-five billion the worse for it once its departing billionaires took their income taxes with them. I have noticed that in every dispute about money, the number tends to be exactly large enough to justify the speaker’s conclusion. It is a convenient habit, and I wish I had acquired it earlier.
It is the conduct of the parties, however, that has delighted me most. The head of a very large social-networking concern has, I am told, informed a committee of his own directors that he is considering leaving the state if the tax passes. The committee replied, in a filing, that it was critically important he continue to live in California and manage the company from there, and it approved a special class of stock which he could use to pay the tax. I will admit that I have never before seen a corporation insure its chief against a government, though I have seen many do the reverse. The head of a very large chip-making concern, by contrast, faces a bill of some eight and a half billion dollars, and has told a newspaper that he is fine with it. It is rare to hear a man say so, and I would pay a good price to see his accountant’s face.
Opponents of the tax, meanwhile, have put two measures of their own on the same ballot, with the happy effect that if either of them gets more yes votes than the tax does, the tax may be struck down. I take this as the most sincere compliment to the democratic process I have seen in years. When a man cannot defeat a measure by argument, he writes two more measures and lets them fight it.
I do not advise the reader how to vote. I would only observe that the proposition is long, and the opposing propositions are longer, and the people who wrote them were paid by the page. I should like to suggest that every voter read all three before marking his ballot, which I regard as an excellent reform, for no one in my experience has ever done it.
I remain, sir, as ever,
Mark Twain
(deceased, and, to the best of my knowledge, below the threshold)