Hating on billionaires is now the cool thing to do — but is the hostility deserved, or misguided?

How can most Americans see billionaires as a threat to democracy, but also make the Kardashians, Jenners and Ronaldos some of the most-followed (and revered) figures? How can so many rally against AI companies and data centers while half of Americans use the chatbots they power? And how can an increasing majority of residents support wealth caps while regularly using the services of (and/or being employed by) the companies the targeted individuals operate?

Arguments from both camps have their merits. Surely, no one should be able to hoard billions while so many of their compatriots are impoverished; but also, everyone is entitled to the American dream of becoming as successful as they set their mind to.

Is the concept of economic justice fair to those who already pay more than a fair share for innovating, working hard and employing Americans? Is the absence of economic justice fair to those who have little? And what about the political influence that the uber-wealthy hold, and the deals made behind closed doors that directly benefit them as a result?

The tax conundrum

In the U.S., the top 1% of earners provide anywhere from around 26% to 55% of all federal tax income, depending on state. The top 25 richest people in America alone were found to contribute a staggering $13.6 billion in federal income taxes over five years in the early 2010s.

The tax system, however, is certainly not without its vulnerabilities and loopholes, which can and have been exploited in more ways than one, including the hundreds of billions lost to social program fraud.

If we’re speaking of billionaires in particular, affluent figures like Elon Musk and Jeff Bezos have famously claimed zero income at certain points, largely by offsetting earnings with ordinary losses through their businesses. There are also ways to defer capital gains taxes, such as borrowing against investments or 351 ETF conversions. (The debate about how ethical capital gains levies are is a whole other story.)

As calls to increase taxes on the rich for this and other reasons get louder, some argue that continuing to punish this successful sect of people with more fees will naturally, at some point, drive away business and stifle both innovation and productivity.

The Laffer Curve is one framework that argues taxing people too much yields just as little in tax revenue as taxing them next to nothing, as it leaves no incentive for people to work. The more you tax people, the more incentive there actually is to either find ways around it or leave.

Deserved vs. undeserved wealth — and who decides what is “deserved”?

There is also the fact that, massive contributions to the tax base aside, many billionaires give far more to overall welfare and industry than the wealth they distill. As one paper from Stanford University’s Hoover Institution states, “most billionaires get to be billionaires by serving us, that is, by making us better off.” Another from the George W. Bush Institute highlights that “innovators capture a mere 2% of the value their inventions generate; the rest goes to consumers, in the form of lower prices, better products, and higher living standards.”

“The persistence of inequality does not prove that the wealthy are necessarily immoral or their wealth illegitimate,” it adds.

While many of us take advantage of the low prices, wide selection and quick delivery of Jeff Bezos’s Amazon, for example, it’s admittedly hard to stomach any portion of the average person’s hard-earned money going to someone that is already worth some $290 billion.

But what motive would Bezos have to continue working, or to create Amazon in the first place, if there was a limit on how lucrative it could get? (Which would also inherently limit what he could offer the public?)

“The trade-offs are stark,” the George W. Bush Institute said. “A marginally fairer distribution of wealth would come at the cost of dynamic enterprises that employ thousands and seed entire industries.”