The Flee-Circus of the Billionaire Class

In an ordinary Flea-Circus (if any actually exist anymore), no one cares much where the fleas live, as their maintenance costs are very close to zero.

The fleeing of billionaires to tax havens matters a good deal, but perhaps not as much as tax collectors, and the politicians who worry over them, might think.

On the other hand, Mark Twain was quoted as having said, “Fleas can be taught nearly anything that a Congressman can,” and he had not yet been introduced to billionaires.

So, let’s ponder that for a moment, as I find myself in a pondering mood.

If my informants are correct, Florida and Texas are the winners in the actual body-count of this economic incursion, and California, New York and Illinois the losers, in an ongoing (and relatively recent) conflict.

Although the youngsters among you may find it hard to believe, there was a time during my 35-year business career when the wealthy gladly paid their fair share in taxes, and were proud to do it.

But that was the 50s and 60s, when being a millionaire was quite enough riches for most.

Today’s high earners mostly see legal tax avoidance as their sworn duty, rather than as a crime that doesn’t require a gun and a mask.

Profit, in its overwhelming principle, is mostly legal but not a very pretty thing to watch. And yet those we celebrate these days are mostly sports heroes and investment fund managers. I understand the sports thing because, unlike wars and economic depressions, they’re over quickly and have a winner and loser. We love winners and despise losers.

I accept that, but it makes me grumble.

Looking for an analogy to the flight of capital, the landscape architect remaining in me suggests comparison to a tree.

The roots are corporate engineers, factories, suppliers, and employees.

The trunk supports middle, and occasionally upper management, while the juicy, leafy, upper part, with all the fruit, represents the Owners, Shareholders, and Boards of Directors.

Yum.

Over the past several decades, we’ve seen both roots and trunk stay pretty much in place. A company may continue to draw nourishment from its roots, but the strategic decisions that keep the wealthy wealthy, are increasingly decided elsewhere.

Nor does it matter, as interconnected as we have become.

California has seen a number of high-profile departures from its high-tax location over the past decade, including major dudes such as Elon Musk, Larry Ellison, Joe Lonsdale, and others, all of whom established residency elsewhere.

Interestingly, and contrary to what one might imagine, at the same time, California has for the most part maintained its progressive tax structure, sustaining one of the nation’s highest top marginal income tax rates.

California voters have continually, for some decades, elected governors and legislators who favor relatively high taxes. Funding education, healthcare, transportation, environmental programs, and social services are important to the state’s voters. From the perspective of many policymakers, the proof is in the pudding, and the obvious benefits of those returns on investment outweigh the risk of some wealthy residents leaving.

What you may not know, is that California is home to the 4th largest economy in the world, up recently form 6^th place.

California sets the stage for much of what’s right in America, and so, with slightly modified wording, trading ‘a Billionaire for a Blackbird,’ a song springs to mind:

Pack up all my cares and woe,
Here I go singing low
Bye Bye Billionaire

Where somebody waits for me,
Tax relief is sweet to see,
Bye Bye Billionaire.

No one here loves and understands me,
Oh! What hard luck stories
they all hand me.

Make my bed and light the lights,
I’ll arrive to get my rights
Billionaire, Bye Bye.

All that’s missing is the late, great, Ella Fitzgerald to sing it.

Just so California doesn’t seem like too much of an outlier, there’s Zohran Mamdani’s election in New York. Too soon to tell?

Maybe, maybe not.

Most interesting to me, is not so much what he’s done, but who he is and where he came from. Those are the things upon which history is built, and New York City is no small deal.

Mamdani was born in Uganda, in 1991 and, beyond his charm, forthrightness, and wide smile, he’s a Muslim.

That cracks me up, you gotta love a 35-year-old, with that background becoming Mayor of an American international city, the best of the best, New York.

In his first months in office, he expanded childcare, including more than 2,000 new free 2-K places immediately after taking office, one of his signature campaign promises. City-owned grocery stores are next, and while they’ve not yet opened, the project jumped into the city’s planning process much faster than expected. And, the beat goes on, with a deed-theft office, fixes to a hazardous cycling bottleneck on the Williamsburg Bridge, using a relatively small infrastructure project to signal a broader emphasis on street safety and active transportation.

New York City is home to 123 billionaires, making it the city with the largest billionaire population in the world.

Together, they have an estimated combined net worth of about $759 billion. Ex Mayor Bloomberg was one of them, so we’ll soon see how all that shakes out.

My bet is that Mamdani will never be one, or care to be…