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Ellis believes that excess wealth threatens democracy and supports wealth tax reform at the federal level.
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He said he was happy to pay higher taxes and said the proposed wealth tax was a step in the right direction but not enough.
The well-known article was based on a conversation with Scott Ellis, a 55-year-old millionaire living in Silicon Valley, about California’s proposed 5% billionaire wealth tax. Ellis is a member of Patriotic Millionaires, a group of wealthy Americans who advocate for a fair tax system, livable wages and equal access to political power. The following content has been edited for length and clarity.
I never thought I would live in California. I grew up in Colorado, went to college in Boston, and live in Texas. I came here for business school because I wanted to go to Stanford and because I could play golf in the winter.
Now I love it here. It has nothing to do with taxes; taxes are never on our list of criteria for deciding where to live. I wanted to live where my family was and loved the weather, jobs and energy.
Taxes are the price we pay for living in a civil society. We must work together. There are examples of effective government power all over the world, and like anything else, governments need funding. We should make it effective and efficient.
I’m proud to pay the taxes I do. It makes sense that I should pay higher taxes than other people because I have more wealth than other people.
My wife and I are financially successful in our careers
A lot of our financial success is due to my wife’s success, and my success early in my career.
I went to Harvard as an undergrad, worked at McKinsey for three years, and then went to Stanford. Then I worked at HP for almost eight years.
In 2007, my wife was a VP at Yahoo and we had two young children. I looked into boss jobs and CEO jobs and decided I no longer wanted those roles. I thought, “Uh-oh, I’m on this ladder, but it’s not really where I want to be.”
Eventually, my wife and I decided for me to step back and become a stay-at-home parent. My wife continued her career in the consumer Internet space with Yahoo, Google, and Pinterest.
I became interested in social issues in college
I studied poverty, American cities, housing, transportation, and sociology in college and started thinking more about questions like: What does equity look like? What does justice look like? What would building a great society look like?
I was busy pursuing my career, meeting my wife, and raising our children, but as time passed and our careers progressed, I rethought how we help those around us. I did a lot of volunteer work in different settings, eventually becoming the COO and then the Chief Safety Officer of a nonprofit called the Center for New Teachers, which provided an intensive mentoring program for new teachers.
Since 2012, I have founded and run multiple nonprofit organizations in the education sector and have provided strategic, financial, operational, and cultural advice to nearly 200 individuals and organizations.
I’m also really focused on addressing excess wealth and its impact on society, and thinking about a vision for the future of American democracy, which is why I joined Patriot Millionaires, an organization of wealthy Americans advocating for higher taxes on wealthy people like us, a higher minimum wage, and a broader distribution of political power in our society.
I was shocked by the huge accumulation of wealth
In recent years, I have been struck by the massive accumulation of wealth brought about by the consumer internet space, globalization, and the structure of the financial industry. This is different from the 80s and 90s; this is a whole new game.
Recently, I looked around Silicon Valley and saw all these incredibly wealthy, talented, successful people and realized how few of them considered the option of building a better society together.
They are excited about starting new companies and raising new money, but these people have more money than they can spend. Their next goal is to create more money, mainly for those who already have more money than they can spend.
At the same time, 10% of our society is in poverty. This does feel unfair and wrong and we can do better.
People don’t need more than $30 million
California’s proposed billionaire wealth tax would not directly impact me and my family. People might be thinking: “You’re happy to raise taxes on other people.”
But we need to start on a different topic, discussing how much wealth is enough, how much wealth is too much, and what is financial success?
I believe that if you have a fortune of $30 million, congratulations, you have won capitalism. If you do an analysis of reasonable investment returns versus inflation, you can buy a really nice first home, a nice second house, your kids’ college expenses are paid for, your end-of-life expenses are paid for, and you’re going to have a very, very luxurious ongoing life.
Success in life is largely a matter of luck. Yes, people absolutely get an education and work hard. But people have found that the richer people are, the more they tend to attribute their wealth to their own excellence and hard work.
I observed single moms working three jobs and working the night shift—many making less than $190,000 [the median household wealth] When it comes to wealth, they work very hard.
Once you get past $30 million – which almost no one reaches – your life gets so good that you really can’t materially improve your life anymore. We should impose a very aggressive 50% annual tax on all household wealth over $30 million. Excess wealth, through massive campaign contributions, translates into excess power, threatening and undermining democracy and capitalism.
Wealth tax is a step in the right direction — but not enough
I’m very pleased that we’re moving in this direction, but I think changes to the wealth tax need to happen at the federal level.
It’s distracting when wealthy people bring up moving out of California. Suddenly, instead of talking about the fact that millions of people are going to lose health care or pay more for health care, we’re now worried about the fact that 200 really wealthy people might move.
People are always moving. Companies move all the time for various reasons – it’s just part of the business. These conversations happen all the time – like, “Oh my gosh, there won’t be any more companies in Silicon Valley.” Well, 20 years later, look around. There are still some companies here; that’s okay.
It’s 65 degrees here and the sun is shining brightly. Nvidia’s CEO recently said they would stay in California because of the talent there. We have the Golden Gate Bridge, Hollywood, Lake Tahoe, redwoods, beaches, and great weather. I’m really not worried about people not wanting to live in California.
I like it here. My wife and I are considering living in a different city for a month at a time, but I have no plans to go anywhere else. While I absolutely love Colorado – I still have my Denver Broncos coaster and will cheer for my Broncos – I’m from Silicon Valley now and that’s where I’m going to be.
Read the original article on Business Insider
