We all understand addictions, and extreme wealth could be seen as such. But it is much more than that – addictions tend to primarily harm the addict, while the extreme rich steal from the poor in many, many ways (see my book The Rich Cheat).
The ridiculously rich are more analogous to the Gray Goo, a science-fiction concept where a self-replicating organism subsumes all around it until the entire universe is gray goo.
When you reach a certain level of wealth, in general, you cannot stop.
Someone with $2M in the bank might get an income of $100K from it (at 5% interest if that ever returns). They probably own their own home, so that would enable a comfortable life without working. They might save a little, or they might spend it all.
Someone with $10M in the bank has more options:
- Outrageous lifestyle – spending $10K per week is hard otherwise
- Saving it for no real need
- Reinvesting and getting richer
The latter is the choice of many – they use money to make money. With that level of wealth, their life changes from one of leisure to one of greed. Whether they use a “family office” to make “investments” or if they actively choose where they store their wealth, their life is now different. They have a purpose of becoming needlessly richer.
They can still have an outrageous lifestyle, but there will be money left over, nagging them… If it cannot be spent, it needs to be put somewhere.
Just as I have proposed determining a new minimum income by which anyone can live with dignity (albeit poor), I am suggesting that an upper limit should be determined, where an average person might consider that they have more wealth than they could possibly need. Such a limit could then be used to decide taxes of constraint, rather than arbitrary numbers like $100M or the 1%.
It can be determined like this:
Make a list of the most expensive year-round travel costs, the most expensive mortgage repayments, the most expensive food and clothes. And for each, remove the top 1% (cost-wise) that is available as being obviously ridiculous. A $100M apartment is not twice as good as a $50M apartment.
That income can be a point at which extreme taxation kicks in, and quite likely it won’t deter the greed, but simply spread the wealth. We can also have a wealth tax (to cover any trickery) where the wealth limit is the income limit times whatever a typical investment return is for the middle class.
It is a brutal idea but it can be softened a little, towards the insanely rich using their money for good. Seed investment (like, really, really, seed), charity (not museums and the hospitals/universities of the rich), and infrastructure (get a road named after you because you built it all).
Once a set amount is determined – it can be debated, different models can be used, but there will still be a range – we can ask the maniacally rich, why do you need more?