What Happens If We Remove a Billionaire? The True Economic Impact
Introduction: Garden/Farm Thought Experiment
Imagine you spend years building a huge community garden. You buy the land, plant the first seeds, install irrigation, and organize volunteers. Over time, it grows into a thriving space where hundreds of people come to pick fresh fruits and vegetables. Some even set up stands and make a living selling what they harvest.
Now, after all that work, you are able to back off and live off commissions from people using the resources you have built, 'Hey, you’re taking our money and you’re not doing anything. We all keep this thing going, maybe you shouldn’t own it at all.'
Meanwhile, many of the same people are benefiting from the produce, relying on what you built, yet now see you as the problem."
It highlights the complexity—yes, billionaires benefit massively, but they also created something that others now depend on. The question then becomes: Is there such thing as too much success?
Billionaires are often seen as either economic powerhouses or symbols of extreme wealth inequality. But what if we removed one from the equation? What would happen to their businesses, employees, and the taxes they contribute? Would the economy suffer, or would it adapt and move forward? Let’s explore the impact of removing a billionaire, starting with an average one before scaling up to someone like Jeff Bezos.
The Impact of Removing a Billionaire’s Ecosystem
A billionaire isn’t just an individual with vast wealth—they oversee businesses that generate jobs, pay taxes, and provide goods and services. If a billionaire disappeared, the effects would ripple through the economy in key ways:
Job Losses: Employees at their companies, from entry-level workers to executives, would be affected.
Tax Contributions: Their businesses and employees contribute significant tax revenue.
Consumer Disruption: People depend on these businesses for goods and services.
Investments and Philanthropy: Many billionaires reinvest in businesses, startups, and charitable causes.
The key question: Would the economy struggle to fill this gap?
What If We Removed an Average Billionaire?
If you completely removed an average billionaire—along with their companies and employees—you’d be taking away several major sources of tax revenue. Let’s break it down:
1. Income Taxes from Employees
Billionaires’ companies employ thousands or even millions of people who all pay income taxes.
Example: If a billionaire owns a company with 50,000 employees, and each worker pays $5,000 in taxes per year, that’s $250 million per year in lost tax revenue.
2. Corporate Taxes
Companies pay corporate income taxes on their profits.
Example: If the billionaire’s company makes $5 billion in profit and pays 21% in corporate taxes, that’s $1.05 billion in lost tax revenue per year.
3. Payroll Taxes (Social Security & Medicare)
Companies and employees both pay payroll taxes.
Example: If the company spends $3 billion on salaries, payroll taxes would be about $450 million lost per year.
4. Sales Taxes from Workers & Operations
If all the employees and the company itself stop spending money, states lose out on sales tax revenue.
Example: If workers collectively spend $2 billion per year on goods, and the average sales tax is 7%, that’s $140 million in lost tax revenue per year.
5. Property Taxes
The billionaire owns expensive buildings, land, and homes that all generate property taxes.
Example: If they own $500 million in real estate and pay 1.5% property tax, that’s $7.5 million per year lost.
6. Capital Gains & Investment Taxes
Billionaires sometimes sell stocks or businesses and pay capital gains taxes.
Example: If they sell $1 billion worth of stock in a year and pay 20% in capital gains, that’s $200 million in lost taxes.
Total Estimated Tax Loss Per Year
If you add all of these up, an average billionaire and their ecosystem might generate anywhere from $1.5 billion to $3 billion in tax revenue per year, depending on the size of their company.
So, while the billionaire personally may not pay much in taxes, their businesses, workers, and investments contribute a massive amount to the economy and government funding.
What If We Removed Jeff Bezos?
Jeff Bezos, the founder of Amazon, has built a vast business ecosystem that significantly contributes to tax revenues through various channels. If Amazon and its associated economic activities were to vanish, the impact on tax revenues would be substantial. Here's a breakdown:
1. Income Taxes from Employees
Employee Count: As of September 30, 2024, Amazon employed approximately 1,551,000 individuals globally.
Average Salary Estimate: Assuming an average annual salary of $50,000 per employee.
Income Tax Contribution: If we estimate an average effective income tax rate of 15%, each employee would contribute about $7,500 in income taxes annually.
Total Income Tax from Employees: 1,551,000 employees × $7,500 = $11.63 billion per year.
2. Corporate Taxes
Corporate Income Tax: In 2023, Amazon reported a current federal income tax expense of $8.7 billion.
3. Payroll Taxes
Payroll Taxes Paid: In 2023, Amazon paid $5.6 billion in federal taxes, which include employer payroll taxes, customs duties, and other taxes and fees.
4. Sales Taxes Collected
Sales Taxes: In 2023, Amazon collected $20.5 billion in various federal, state, and local taxes on behalf of employees and customers.
5. Property Taxes
Property Holdings: Amazon owns and leases numerous fulfillment centers, data centers, and office spaces worldwide. While exact property tax figures aren't publicly disclosed, these properties contribute significantly to local property tax revenues.
Total Estimated Annual Tax Contribution
Summing the available figures:
Income Taxes from Employees: $11.63 billion
Corporate Income Tax: $8.7 billion
Payroll Taxes: Portion of the $5.6 billion
Sales Taxes Collected: $20.5 billion
This totals approximately $40.83 billion annually, not including property taxes and other indirect tax contributions.
Therefore, the disappearance of Jeff Bezos's business empire would result in a significant loss of tax revenue, underscoring the substantial economic impact of such large corporations.
How Much Does the Average Person Contribute?
The average person in the U.S. contributes to taxes in multiple ways, including income tax, payroll tax, sales tax, property tax, and various other fees. Here's a breakdown of how much an average American contributes annually:
1. Income Tax
Average salary: ~$60,000 per year (as of 2023).
Effective federal income tax rate: ~13% for middle-income earners.
Income tax paid: $7,800 per year (on average).
State income tax: Varies, but typically adds another 3-6% (~$2,400 per year in high-tax states).
Total income tax (federal + state): $7,800 – $10,200 per year.
2. Payroll Taxes (Social Security & Medicare)
FICA taxes (Social Security + Medicare) = 7.65% of income (plus another 7.65% paid by employer).
$60,000 salary × 7.65% = $4,590 per year paid directly by the worker.
3. Sales Tax
Americans spend a large portion of their income on taxable goods (groceries, gas, entertainment, etc.).
Estimated spending on taxable goods: ~$20,000 per year.
Average sales tax rate: ~7%.
Sales tax paid: $1,400 per year.
4. Property Tax (If They Own a Home)
Average home value: ~$350,000.
Average property tax rate: ~1.1%.
Annual property tax: $3,850 per year (varies by location).
5. Other Taxes & Fees
Gas tax, car registration fees, tolls, sin taxes (alcohol, tobacco), and utility taxes.
Estimated at $1,000 – $2,000 per year per person.
How Many Average People Would It Take?
So, the average person contributes about $15,000 – $22,000 per year in taxes, depending on homeownership, spending habits, and location.
Total Estimated Tax Contribution Per Year
From the previous breakdown:
Jeff Bezos/Amazon ecosystem contributes: ~$40.83 billion per year in taxes.
Average person contributes: $15,000 – $22,000 per year in total taxes.
To find out how many average taxpayers it would take to replace Amazon’s tax contribution:
Low estimate ($15,000 per person):
$40.83 billion ÷ $15,000 = ~2.72 million peopleHigh estimate ($22,000 per person):
$40.83 billion ÷ $22,000 = ~1.86 million people
What This Means
It would take about 1.86 – 2.72 million average taxpayers to replace the total tax revenue that Bezos’s ecosystem contributes annually.
For context, that's about:
The population of Houston, Texas (~2.3 million).
More than the entire workforce of Walmart in the U.S. (~1.6 million employees).
Almost the entire state of Kansas (~2.9 million people).
So while billionaires themselves may not pay as much in personal taxes,
their businesses, employees, and economic activities generate massive amounts of tax revenue.
Things to think about?
Billionaires are being made to look like the bad guys. But are they really?
With this big of an ecosystem, could it be argued that billionaires are paying for the rest of us?
How much do we rely on big corporations?
What would it look like to not have any billionaires?
Are we prepared for that?
This blog was generated with the help of AI
