“Cancelling Billionaires Before They Cancel Us: The Urgent Case for a Wealth Tax”

By Linda McQuaig and Neil Brooks 

It’s a bit difficult for me to read this book. That’s not the fault of the book, it’s well written and presents a solid case. It’s just that when you’ve seen Hamlet 50 times, the 51st might be a bit anticlimactic. 

The basic story is one that, in my old age, I have seen many times. The rich are getting an ever-larger share of society’s income and wealth. The size of their fortunes does not in any plausible sense correspond to their contributions to society. In fact, as McQuaig and Brooks (MB) show, it often stems from corrupt deals. 

This is told with a Canadian accent, as the authors are both Canadian. This introduces those of us south of the border to some fresh villains, like retail pharmacy baron David Katz and hedge fund billionaire Conrad Black, rather than the usual accounts of Zuckerberg, Musk, Ellison and the rest. 

They also point out that the rich have managed to reduce their tax burden over the last half century, leaving a larger share to be borne by the middle class and poor, often in the form of reduced public services. MB also give a good account of the evidence that higher taxes on the rich and less inequality are associated with better outcomes on a wide range of metrics most of us care about, such as health, education, democracy, gender equality, and environmental quality.

The book also has a discussion of various other efforts to tax the rich in addition to the wealth tax they push. I think they are a bit overly dismissive of the evasion/avoidance problem. The rich might be awful people, but they do care about their money. When it comes to finding ways to hang on to it, they can be very creative or at least hire people who can be very creative. 

As a genuine libertarian (some do exist) explained to me many years ago, if you have a 90 percent top tax bracket, you are paying people 90 cents for each dollar of income they can hide. That is a serious incentive. 

Anyhow, MB cite the work of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman on how to design wealth taxes and minimize evasion/avoidance. These are outstanding economists who have done great work, but to my mind, the evidence is more mixed than MB suggest, but I would be happy to be shown wrong. With some luck we will get to test this proposition in California, where a 5 percent wealth tax is on the ballot this fall. 

I would have been hesitant to push this initially. Its key feature is that the tax applies to people who lived in the state at the end of 2025. Some of the billionaires felt the threat serious enough that they moved or at least changed their official residence (these are very different things) prior to the December 31 deadline. 

Having already chased away some of the excessively greedy rich, there seems little reason not to move ahead with the tax. California still has enough billionaires that it should raise a ton of money if it passes and survives the inevitable court challenges. In addition to giving the state more money to fund things like housing, education, health care and other vital needs, the tax will also give us important new evidence on the impact of these taxes.

As much as I would like to see wealth taxes and other taxes on the rich succeed, I still hold the view that it is better to structure the economy to not give so much money to the rich in the first place. MB are somewhat attentive to this issue, even if it is not the main focus of the book.  

I have long focused on government-granted patent and copyright monopolies as interventions that transfer an enormous amount of money from the rest of us to the rich. Without these monopolies, centi-billionaires like Bill Gates and Larry Ellison might still be working for a living or surviving on their Social Security benefits. The sums involved are easily over $1 trillion a year, more than a third of after-tax corporate profits. And we would also eliminate a huge incentive for corruption, especially in the pharmaceutical industry. 

We could also structure the financial sector to be less conducive to waste and big fortunes. A modest sales tax on financial transactions, like we have on food and clothes, would eliminate a huge amount of waste in the sector and also downsize many fortunes. Similarly, bankruptcy laws that held the PE folks liable for the debts of the portfolio companies they put into bankruptcy likely would have crimped the fortunes of industry barons like Steve Schwarzman. 

I prefer nailing the rich before they get their money, both because it is much more efficient than trying to pry it back after the fact, but also because it takes away the rich’s shield, where they try to hide behind the free market. A government that funds research upfront and puts it all in the public domain is no less free market than a government that grants patent and copyright monopolies. Similarly, a government that taxes financial transactions, like every other item, is no less free market than one that makes a special exemption for the financial industry. And the market doesn’t tell us how to structure bankruptcy laws. 

But I learned long ago that intellectuals don’t care much about intellectual consistency and the rest of the world never hears the argument. So, let’s nail the rich where we can. 

Folks not familiar with the argument should read the book. Everyone should see Hamlet once, and two or three times will likely be worth it. Even the 51st time may still produce some value.