The best evidence yet for why we need to tax wealth
If Donald Trump takes power this November (perish the thought), he’ll owe his victory in no small part to one of the richest Americans alive in 1920: Pittsburgh banker and industrialist Andrew Mellon, who was treasury secretary for Warren G. Harding, Calvin Coolidge, and Herbert Hoover.
I’ve noted this before, but it bears revisiting now because Timothy Mellon — Andrew’s grandson — has just donated $50 million to a super PAC supporting Trump, according to new federal filings. It’s among the largest single disclosed contributions — ever.
Timothy Mellon is the first donor to give $100 million in disclosed federal contributions in this year’s election. He was already the single largest contributor to super PACs supporting both Trump and Robert F. Kennedy Jr. (Mellon previously gave $25 million to both).
Andrew Mellon, Timothy’s grandfather, is the source of this money. As secretary of the Treasury, Andrew cut the estate tax by half, arguing that “the social necessity for breaking up large fortunes in this country does not exist.” He also whittled down the top income tax rate from 73 percent to 25 percent and eliminated the gift tax.
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These changes enabled Andrew to shift much of his personal fortune — estimated to be $600 million in 1932 (about $9 billion today) — tax-free to his heirs, including Andrew.
Forbes estimates the Mellon family is now worth $14.1 billion.
Like his grandfather (and like Donald Trump), Timothy Mellon rages only against handouts to people who were born without silver spoons. In his self-published 2015 autobiography, Timothy argued that expanded social programs have only made Black people “even more belligerent.”
“For delivering their votes in the Federal Elections, they are awarded with yet more and more freebies: food stamps, cell phones, WIC payments, Obamacare, and on, and on, and on. The largess is funded by the hardworking folks, fewer and fewer in number, who are too honest or too proud to allow themselves to sink into this morass.”
The $100 million Timothy has shelled out to Trump and RFK Junior comes courtesy of a tax system pioneered by his grandfather that allows the perpetuation of dynastic wealth and the maintenance of its political power.
The Mellon money trail exemplifies the perils of dynastic wealth — and why we need a wealth tax in America. Alternatively, the capital gains tax must be applied to the appreciated value of assets held during someone’s life, before they die and hand them off to their heirs at current market values.
When he was a Virginia legislator, Thomas Jefferson sought legal ways to prevent the perpetuation of great fortunes, fearing that the rise of an American “aristocracy of wealth,” would cause more “harm and danger, than benefit, to society.”
The wealth and power extending from Andrew Mellon to his grandson Timothy proves Jefferson right.
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Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/