Elon Musk is no Andrew Carnegie

America used to be a middle-class society. But income and wealth disparities began rising rapidly during the Reagan years, and by the late 80s many observers began drawing parallels between the new era of inequality and the Gilded Age.

At this point, however, it’s clear that we are not experiencing a mere replay of the reign of the robber barons. We are living through something much worse. The tech bros make the “malefactors of great wealth” called out by Theodore Roosevelt look benign by comparison.

Some widely used measures of inequality suggest that income disparities, which soared in the 1980s and 1990s, have plateaued since then. But the concentration of wealth at the top is continuing to soar. Today’s oligarchs control a huge share of America’s wealth — much larger than their share even at the end of the 1980s:

The growth in wealth concentration is even more extreme if we look at the very, very top. Gabriel Zucman, one of the world’s leading experts on wealth and income inequality, argues that the concentration of wealth is now much higher than it was at the peak of the Gilded Age:

Source

Tellingly, unlike the robber barons of yore, many modern plutocrats show little sense of gratitude for their good fortune, little inclination to give back to society by devoting a significant part of their wealth to good works. Forbes reports that Elon Musk and Peter Thiel have devoted almost none of their wealth to philanthropy, while Mark Zuckerberg and Jeff Bezos are only slightly better.

More important than the stinginess of the superrich, however, is the fact that their wealth has brought great political power, arguably more than the robber barons ever possessed — power that they abuse on an epic scale.

Thanks to the Roberts Supreme Court’s “Citizens United” ruling, plutocrats are able to pump vast amounts of money into elections. Here’s a recent headline from the New York Times:

One example of many: Peter Thiel bankrolled J.D. Vance’s Ohio Senate campaign, burying his Democratic populist rival under a flood of PAC money. Without Thiel’s big bucks, J.D. Vance would not now be a heartbeat away from the presidency.

And Elon Musk actually controlled a significant part of U.S. government operations in 2025 — control that he used, among other things, to eviscerate foreign aid. Those aid cuts have already led to hundreds of thousands of preventable deaths, mostly children, with millions more deaths likely to come.

The big political question going forward is whether there will be a significant backlash against the concentration of wealth and power in the hands of a small number of mean-spirited men.

I believe that there will be such a backlash, indeed that it is already starting, and that there is a political opening for some genuine populism if politicians have the courage to take a stand.

Polling suggests that an overwhelming majority of Americans — roughly speaking, almost everyone except MAGA Republicans — now consider the gap between rich and poor a major problem:

Source: YouGov

And anger over the Trump administration’s corruption — which isn’t the same as anger over the power of the superrich but overlaps with it — is clearly on the rise, becoming a major issue for the midterms.

What we need to push back against 21^st century oligarchy are political figures who won’t let themselves be intimidated by the hysteria the wealthy always exhibit at any hint of an effort to limit their privileges. That hysteria is on full display right now in New York City, where some of the wealthy are crying persecution over a planned tax on expensive pieds-a-terre — apartments owned by nonresidents. It’s even more extreme in California, where a proposal for a one-time wealth tax has led Google’s Sergey Brin to compare the state to Soviet Russia.

What politicians and pundits need to understand is that while the ultrawealthy would like us to believe that concern about their excessive power and privileges is a radical, left-wing, anti-centrist position, it isn’t. It is, in fact, a view shared by a large majority of Americans. And in any case, as G. Elliott Morris has shown, few voters, even those who describe themselves as moderate, really support what pundits call “centrism.”

It’s true that any politician who proposes a pushback against modern American oligarchy will face a tidal wave of lavishly funded venom. But given the realities of who today’s plutocrats are and what they do, there are big opportunities for leaders willing to pull an FDR and declare, “I welcome their hatred.”

MUSICAL CODA

[Editor’s Note: Sales consultant and former startup founder Ron Davis is a candidate for the Washington state Legislature, who has written for GeekWire previously on startup sales hiring practices. GeekWire publishes guest opinion pieces representing a range of perspectives. The views expressed are those of the author.]

If you tune into the local conversation about Washington state taxes on LinkedIn, you might think that Olympia is on the verge of snuffing out Seattle’s regional economy with extreme taxation. There are exceptions, but most of these posts are long on rhetoric, short on rigor. Given Washington’s pressing needs, we should do better. And given our community’s capacity for data-driven thinking, we can do better. 

Contrary to popular myths, our taxes are relatively low, haven’t exploded skyward, and are nowhere near the point of creating serious damage to the commercial sphere.

Washington taxes are low

Let’s consider why a conservative economist recently called Washington a “tax haven, like the Cayman Islands,” when it comes to the rich. First, we only recently even reached the halfway point among states when it comes to taxes as a share of its economy, and our taxes are actually down from a few years ago. We have lower taxes than every other deep blue state, and nine red states too, including Kansas, Kentucky, Utah and West Virginia.

Second, our taxes disproportionately coddle the rich, while simultaneously stiffing working families. Until recently, Washington was the most regressively taxed state in the union, which meant that the poor pay a much bigger share of their income than the rich. Thanks to the tax on capital gains windfalls over $250,000 in a year, we are now only the second most regressively taxed — just above Florida. 

Currently, the top 1% of Washington earners pay 4% of their income in state and local taxes — less than either Texas or Idaho. The national average is 7.2%, nearly twice as much as Washington. In Massachusetts, California and New York, the top 1% pay 9%, 12% and 14% of their income. On the other end of the spectrum, the bottom fifth of earners in the Evergreen State pay through the nose — 13.8% of their income. The national average is 11.4%. Low income families ARE overtaxed relative to their peers in other states, but this does not figure into the discussions on LinkedIn.

Let’s remember the national and global context as well. United States taxes, including state and local, are far lower than most rich countries — 32nd out of 38 in the OECD. We pay 25%, while the rich Danes, Dutch, Japanese and Austrians, or the fast-growing Spanish and Poles, all pay 35%-43%. No wonder our life expectancy, inequality, healthcare coverage and infrastructure are so poor! The only countries* with taxes lower than ours in the OECD are Costa Rica, Turkey, Colombia, Chile and Mexico.

In other words, the notion of a tax burden — especially for the rich, especially in Washington state — is a myth.

Washington’s budget growth is sustainable

One often hears hyperventilating claims about the growth in Washington’s budget. It is true that if Washington’s budget had grown at exactly the rate as the population and general inflation combined over the last decade, it would be 29% lower. But as any public finance economist can tell you, that information is close to useless. 

Cost disease means that services inflation in both the public and private sectors is higher than overall inflation. Since government work is service-intensive, government costs go up faster than general inflation. Governments build stuff, too — so they buy lots of land and land also gets expensive faster in growing economies. This is why the cost of keeping government services flat usually increases much faster than inflation. Ergo, economists instead look at how much of our state income (GDP) taxes take up.

You might think we’ve run up spending in the last few years at an unsustainable rate. Think again. In 2019, taxes were 10.6% of our economy. Today they are 8.47%. Perhaps we should look back to the depths of recession-era austerity, in 2010? It was 9.9%. Taxes as a share of our economy have shrunk. They are flat from 25 years ago, and down from the 1970s, 1980s and 1990s. 

And if you think GDP numbers are somehow distorted or are not representative of individual experiences, the same analysis holds true of personal income. Taxes are lower, and our economy boomed when our taxes were higher.

The millionaire tax won’t hurt the economy or prompt a mass exodus

In conversations online, for all the talk about tax flight and comparative disadvantage vibes, there is surprisingly little discussion in our community about the real, measured, economic impact of higher taxes on the wealthy. So what does the cold, hard, evidence say?

Well, setting aside the question of whether retaining every last wealthy person is the highest goal of public policy, the evidence is pretty darn clear that the wealthy on balance are nowhere near as price-sensitive as we are told. In fact, millionaires move less than everyone else. 

Researchers estimate that eliminating all tax differences between the states would reduce national millionaire migrations by only about 250 families per year — out of roughly 12,000 total. Regions like ours are “sticky,” as the product people say.

Moreover, studies suggest that when the wealthy do move, they mostly move to other high-tax jurisdictions! Certainly some people cite taxes when they move to Wyoming and some people buy extra homes and play domiciling games to avoid taxes. But the macro, net effect appears to be pretty negligible.

Unfortunately, studies of millions of people seem to have little impact on people’s beliefs when “everyone they know” is “thinking” about moving. 

So let’s put this in terms of some specific stories. New Jersey raised taxes on the rich and Massachusetts raised taxes on millionaires. New York raised taxes on the rich twice, and so did California. In every one of those cases, businesspeople predicted an economic apocalypse, and talked about how the people they knew were leaving. Then the number of rich people in all those places increased markedly. In fact, in California — where taxes went up a lot — their “market share” of U.S. millionaires even increased.

It’s almost as if “the economy” is an immensely complex emergent phenomena, instead of a simple equation where prosperity is perfectly inversely correlated with rich people’s taxes or commentator’s vibes about them.

It’s a serious problem that these kinds of facts so rarely figure into pronouncements about the imminent demise of our local economy every time we do something like raise the minimum wage, labor standards, or taxes. While there is plenty of room for discussion about the right kind and level of taxation, it is time we stopped having a discussion that is just devoid of basic empiricism. 

Washington taxes aren’t high, haven’t spiked, and raising them on the wealthy doesn’t risk economic ruin. This community built world-changing companies by following evidence wherever it leads. It’s time we demand the same standard from our political discourse.

* Ireland is officially on this list, but its tax rate is seriously distorted, because GDP is massively inflated by companies shifting profits there on paper for tax purposes. Ireland has addressed this distortion with a gross national income number and this puts their true tax rate between 35% and 40%.

Note: I used these population numbers, budget history and this inflation calculator.

When the first edition of Into Thin Air was published not long after the 1996 Mount Everest calamity, during which eight climbers died in a violent storm, I assumed that the disturbing events I described in my book would convince amateur climbers that paying a lot of money to be guided up the highest mountain on Earth was a bad idea. I was wrong. The deadly hazards I wrote about attracted novice climbers to Everest like gamblers to a slot machine. The owner of one of the prominent guiding companies told me that Into Thin Air was better advertising for his business than anything he could have imagined.

When I climbed to the summit of Everest in May 1996, I was, according to the Himalayan Database, only the 621st person to arrive there since the mountain was first summited, in May 1953. During the 30 years following my ascent, Everest was climbed approximately 13,000 times. At least 90 percent of those ascents were made by clients and employees of commercial guiding companies. As this astounding number suggests, scaling the world’s highest mountain is a very different experience than it was in 1996. Most notably, Everest climbers are now much less likely to die. From 1921, when the first serious attempt to climb the mountain was made, through 1996, one person was killed, on average, for every five who reached the summit. Over the next 28 years, that ratio diminished to one death for every 68 summits. In 2025, only five climbers died and 866 reached the summit, a ratio of one fatality for every 173 climbers who got to the top.

The greater likelihood of surviving an Everest expedition might come as a surprise, given the numerous photos of alarming traffic jams on the mountain that have gone viral in recent years. But the very real risks posed by these crowds have been mitigated by other developments. Weather forecasts are more accurate, oxygen masks are more efficient and reliable, guided climbers are now provided with as many oxygen canisters as they are willing to pay for, and each commercial climbing client is typically ushered up the mountain by at least one personal Sherpa guide.

Perhaps the most significant change in the past 30 years, however, is the transfer of authority and agency on the mountain: from European and American climbers and guiding companies to Nepalis. Thanks to the greater demand for high-altitude workers on Everest, many more Nepalis are now employed by commercial guiding operations; today they represent a majority of the highly qualified guides. Even more noteworthy is the dramatic increase in the number of expedition services owned and run by Nepalis, which currently make up most of the guiding companies on Everest.

No longer do Nepalis primarily function as kitchen workers and load carriers. They are now frequently the most skilled and accomplished guides on the mountain. For all intents and purposes, climbing activity on the Nepali side of Everest—where most ascents take place—is controlled by Sherpas. They install and maintain the dozens of ladders and miles of fixed rope on the mountain. They call the shots. They’re the gatekeepers. This is entirely appropriate, given that the mountain rises from the homeland of the Sherpas, a native ethnic group, and they have been a crucial presence on Everest expeditions since the earliest attempts to climb it.

[Read: The last place on Earth any tourist should go]

This remarkable transformation can be traced to a variety of factors, but among the most consequential was the creation of the Khumbu Climbing Center, a project launched by the American climbers Jenni Lowe and Conrad Anker to teach technical-climbing skills to Nepali high-altitude workers. The idea to create a training program for Sherpas came from Jenni’s first husband, Alex Lowe, a friend and occasional climbing partner of mine, who had been appalled, on numerous Himalayan expeditions, by how little technical training most Sherpas had received, putting them at great risk.

Tragically, Alex was killed in an avalanche on Shishapangma, a 26,335-foot Tibetan peak, in October 1999, before he had an opportunity to accomplish his goal. In 2004, Jenni, along with her second husband, Conrad, launched the first Khumbu Climbing School in Phortse village. (I volunteered as an instructor that inaugural year, and again in 2005.) The Khumbu Climbing Center, as it is now known, has certified more than 1,000 Nepali guides, who are presently employed by commercial guiding companies on Everest and throughout the world.

Nepali workers deserve much of the credit for making Everest a less dangerous mountain than it used to be. But climbing it is still exceedingly hazardous, especially for the Sherpas themselves. Because clients now receive a lot more supplemental oxygen than they used to, workers must make even more trips through the deadly Khumbu Icefall (a constantly shifting, 2,000-foot-high jumble of house-size blocks of ice) to carry additional canisters to the upper mountain. Furthermore, the rapidly warming Himalayan climate is making the carapace of snow and ice that covers much of the Everest massif more unstable, which makes the icefall more likely to be the site of another mass-casualty event like the avalanche that killed 16 Nepali workers on April 14, 2014.

Despite the dire risks they face, the Nepalis have often failed to receive the respect they deserve from foreign climbers. Resentment over this has festered for decades among Sherpas. In 2013, the frustration erupted on a steep ice face at 23,000 feet. (The incident was most thoughtfully recounted in Melissa Arnot Reid’s climbing memoir, Enough.) Earlier that year, Nepali expedition leaders announced that on April 27, a large Sherpa team would begin installing fixed ropes on Everest’s Lhotse Face, and asked all climbers to stay far away for the duration of the operation. Everyone heeded this request except for two acclaimed professional alpinists, Ueli Steck and Simone Moro, and the cinematographer documenting their ascent, Jonathan Griffith. The European climbers stayed more than 100 feet away from the Sherpa team for most of their climb, but to reach Camp 3, they had to pass directly above the Sherpas as they worked. When doing so, the Europeans inadvertently knocked off small chunks of ice that struck a few Sherpas.

According to Arnot Reid, who was on the mountain that day, the Sherpas were furious—in part because the falling ice was a genuine hazard, but mostly because they considered the Europeans’ defiance of the closure incredibly disrespectful. An altercation broke out on the steep ice face, during which Moro directed an obscene insult at Mingma Tenzing, the leader of the Sherpa rope team. This was so objectionable to the Sherpas that the entire team immediately abandoned their unfinished work and descended to Camp 2. When the European climbers came down to that camp shortly thereafter, a mob of 100 angry Sherpas confronted them, hurling rocks at the climbers and kicking them after they fell to the ground. As the melee escalated, Arnot Reid persuaded Moro to get down on his knees and apologize. When he reluctantly acceded, the mob dispersed, allowing Steck and Moro to flee down the Khumbu Icefall with minor injuries and their tails between their legs.

[Read: The year climate change closed Everest]

The confrontation was ugly, but it led to a more honest, long overdue accounting of the historic relationship between Sherpas and foreign climbers—an assessment reinforced by a labor strike prompted by the 2014 avalanche. These shocking incidents compelled foreigners to acknowledge that Sherpas have played an essential role—and have been exposed to disproportionate risk—on almost every significant Everest expedition since the very first one in 1921, yet have seldom been regarded as equal partners or elite mountaineers.

A pivotal event in the Sherpas’ struggle for respect occurred on January 16, 2021, when 10 of Nepal’s most accomplished mountain guides endured gale-force winds and a temperature of 58 degrees below zero to complete the first winter ascent of K2, the planet’s second-highest summit—a much more difficult and dangerous peak than Everest. Considered the last great unsolved challenge in high-altitude mountaineering, a K2 winter ascent had been attempted many times without success by some of the strongest climbers in the world before the all-Nepali team arrived on top, 28,251 feet above sea level, and belted out Nepal’s national anthem en masse. A video of this moment went viral, generating accolades from around the world. According to one of the team leaders, Mingma Gyalje Sherpa (also known as “Mingma G”), their astonishing feat was “about giving justice to our future generations.” Roughly 100 years after the first Sherpa deaths on Everest, the hard-won respect achieved by Nepali climbers was wonderful to behold.

Other developments since 1996 have been less wonderful. The swarms of climbers who now arrive every April to be guided up the Nepali side of Everest give a big boost to the regional economy, but their presence is highly damaging to the environment, and new regulations concerning trash and human-waste removal have failed to adequately address the degradation.

Developments over the past 30 years have wrought a different kind of degradation as well. Climbing to the highest point on Earth is still an adventure that entails considerable risk and typically requires weeks of immense effort. But the commodification of the mountain has stripped away much of what once made climbing Everest such a uniquely profound experience. As the journalist Carl Hoffman mused in a review of a recent book about the Everest guiding industry, these companies perform an admirable service by providing expertise and assistance that now enables almost anyone to climb Everest. Nevertheless, he writes, “it’s hard not to look at those pictures of clients stacked on the side of the mountain in long lines, clutching their handrails and not think: Gross. That something fundamental to exploration and adventure and the human experience of it has been lost, is lost; that the thing they’ve purchased is a thing so vastly different from its very idea as to render it meaningless.”

This is true, I’m sad to say. But if you have what it takes, it is still possible to ascend Everest in the same manner as mountaineers of yore—including the minimalist style of Reinhold Messner’s renowned solo ascent. On August 20, 1980, Messner reached the summit of Everest alone, in stormy monsoon conditions, via a partially new route on the Tibetan side of the peak, without relying on bottled oxygen, established camps, a rope, or other humans of any nationality. It is still considered the greatest mountaineering feat of all time.

If you’re unwilling to go full Messner, you can honor the mountain’s historic stature and avoid the hordes by forgoing the relatively favorable weather of the spring climbing season and attempting your ascent in the colder, much snowier autumn months, or simply stay away from the two primary guided routes. By taking a direct route up Everest’s immense North Face instead, or trying the remote Kangshung Face, you are unlikely to encounter other people, and are guaranteed to experience all the adversity you might desire. You also stand a better chance of getting killed. Which explains, of course, why such routes remain uncrowded: Most of the multitudes who attempt Everest these days simply want to reach the summit with as little effort and risk as possible, by whatever means offer the greatest probability of success.

After what I experienced in 1996, I’m not inclined to fault them.

This essay was adapted from the 30th-anniversary edition of Jon Krakauer’s Into Thin Air, which is out May 10.

A billionaire acquaintance of mine who moved from Manhattan to Miami during the pandemic was talking with me recently about New York City’s proposed pied-à-terre tax—an annual surcharge on second homes that are valued above $5 million. When Mayor Zohran Mamdani and Governor Kathy Hochul announced the proposal earlier this month, the tabloids and the business press insisted that it would chase the rich away. But my acquaintance didn’t seem too worried. He had kept his New York apartment, as many recent arrivals to Miami do, and had no intention of giving it up. He is very tied to the city—socially, professionally, and philanthropically—and travels there frequently.

There’s a lesson here for cities and states that are considering raising taxes on their wealthiest residents: The specific type of tax matters. The key is to design it around something the rich don’t want to give up—such as their home in the most economically and culturally important city in the world—not something they can easily avoid by simply changing their tax residence.

For a long time, academic research said that the rich don’t move because of taxes. Studies of millionaire migration, going back decades, found that high-income households had lower migration rates than the middle class. The rich were embedded in the places where they had built their careers, their networks, and their lives. The one real exception was a modest flow of New Yorkers moving to Florida late in life.

[Annie Lowrey: So nobody is going to pay taxes now?]

That used to be true because the rich had no real choice. Their businesses were in New York or San Francisco or, in the case of Jeff Bezos’s Amazon and Howard Schultz’s Starbucks, in Seattle, and they had to be near them. But digital technology, and especially the successful experiment in remote work during the pandemic, severed the bond between where a business is and where the owner lives. Once that bond broke, everything changed.

Recent years have seen a parade of billionaires, including Bezos, Schultz, Ken Griffin, Larry Page, and Sergey Brin, leaving blue cities for the low taxes, warm weather, and lifestyle of Miami. At first, the rich tried a more holistic version, relocating big chunks of their company with them. Griffin, for example, moved Citadel from Chicago to Miami. Then they figured out that they didn’t have to move the business at all; they could just move themselves. Bezos left Seattle for Indian Creek Island, but Amazon is still in Seattle. Page bought a compound in Coconut Grove for nearly $180 million, but Google is still in the Bay Area. Mark Zuckerberg picked up a $170 million waterfront mansion on the same island where Bezos lives, but Meta is still in Silicon Valley. Schultz bought a $44 million penthouse at the Four Seasons at the Surf Club, just north of Miami Beach, but Starbucks is still in Seattle.

Florida makes this easy because it has no real residency requirement. The wealthy simply declare a Florida home as a homestead, and as long as they don’t spend more than the threshold number of days in their other homes—in New York, Los Angeles, Aspen, the south of France—they are Florida residents for tax purposes. That probably explains why Bezos became a Florida resident before selling $8.5 billion in Amazon stock in 2024. (Florida has no state capital-gains tax.)

This is what Miami and Palm Beach and a handful of other places are becoming: lifestyle tax havens, which offer sunshine, great nightlife, and an ideal place to dock a yacht, as well as tax advantages. Places for the rich, and, more and more, for the rich alone. Meanwhile, an exodus of the less advantaged, the working classes, and the merely affluent has begun. Miami-Dade County had the third-largest loss of domestic population of any county in the country last year. (The outflow of residents used to be covered up by international migration, a process disrupted by President Trump’s immigration crackdown.) As the Miami Herald has reported, the people leaving the city have annual incomes that are half of what new arrivals make, on average. The rich have altered Miami’s housing market and pushed prices up, and they and the key employees they brought with them have taken up the limited supply of private-school slots.

For the ultra-wealthy, the hollowing-out of a city can be a blessing in disguise. Less traffic, less congestion, and fewer people competing for housing and schools are more benefit than burden. They would prefer their lifestyle tax haven to be even more like Monaco. But a city that works for billionaires and few others is not a city. It is a resort with a tax code.

The importance of lifestyle helps explain why a tax on second homes might be the one kind of tax that the super-rich—like my billionaire acquaintance—will grudgingly tolerate. The pied-à-terre tax is unlikely to chase many people away, because it applies to a fixed asset, such as a house, condo, or co-op. The only way to get around the tax is to sell the asset. But that asset is also their home in a place where they really want—and, in many cases, need—to be, and many wealthy people would rather hang on to it.

The amounts involved are also smaller than income or wealth taxes. New York City’s proposal is estimated to raise up to $500 million in annual revenue, according to the city comptroller. Although the details have not yet been released, under a previous proposal, which used a sliding scale rising to 4 percent on value above $25 million, Griffin’s Central Park South penthouse would generate a surcharge of about $9 million a year. That’s real money, but a fraction of what income or wealth taxes cost the ultra-wealthy. If Bezos had still been living in Seattle when he off-loaded Amazon stock in 2024, his Washington State capital-gains-tax bill would have come to about $600 million. The proposed California Billionaire Tax, a onetime 5 percent levy on net worth above $1 billion, would have cost Larry Page roughly $14 billion had he not preemptively fled the state.

[Brian Galle: The myth of the mobile millionaire]

A pied-à-terre tax could, then, actually help refill city coffers instead of just eating away at the tax base. The only problem is that the mayor has made a political football of it. Mamdani could have pushed the tax through without making new enemies. Most of the uber-wealthy would have shrugged, like my acquaintance, perhaps grumbled a little, and paid it. Instead, the mayor shot a video outside Griffin’s apartment building and named him as an example of someone who could pay. Gerald Beeson, Citadel’s chief operating officer, immediately called the spectacle shameful and signaled that the firm might pull out of its multibillion-dollar new Manhattan headquarters building. Billionaires do not take well to being made an example of. Griffin, after all, relocated Citadel from Chicago to Miami after feuding with the mayor and governor over taxes and crime. The purpose of a pied-à-terre is emotional, not financial. After enough public shaming, a rich person might lose their taste for keeping a place in the city.

There is also a harder truth underneath the political rhetoric. Blue cities cannot keep taxing their way out of their budget problems. The differentials between high-tax and low-tax states are now too large, and the mobility of the rich too real, for that playbook to keep working. Cities like New York have to get serious about the cost side of their budgets—about efficiency, productivity, and what they spend. The revenue side alone cannot close the gap. A pied-à-terre tax is a useful tool if it is used smartly, but it is not a substitute for running the city well.

None of this means the idea of taxing the rich is wrong. The inequality that has built up in this country has reached levels that are corrosive to the economy and to the fabric of our cities. But income taxes and wealth taxes cannot do the job at the city or state level. They have to be levied at the national level, where there is no state line to cross. Local governments should tax what cannot move, which means fixed assets and real estate above all. A pied-à-terre tax is one version of that idea, and there are others. For cities like New York, the lesson is straightforward. Stop trying to tax what the rich can carry with them, and start taxing what they want to keep.

Six months ago, the AI sector was looking pretty bubbly. Companies were plowing hundreds of billions of dollars, much of it borrowed, into building new data centers, but had no clear path to profitability. Experts and journalists, myself included, were comparing the AI build-out to the railroad bubble of the 1800s and the dot-com bubble of the ’90s, in which speculation led to overinvestment that eventually crashed the stock market. Even OpenAI CEO Sam Altman voiced public doubts. “Are we in a phase where investors as a whole are overexcited about AI?” he said last year. “My opinion is yes.”

Today, however, we’re in a very different world. Software developers are adopting AI tools en masse and reporting astronomical productivity benefits. The worry that the country is building too many data centers now coexists with the fear that we won’t have enough of them to satisfy the public’s growing appetite for these products. And the company previously known as OpenAI’s junior competitor has become possibly the fastest-growing business in the history of capitalism. Anthropic’s revenue is increasing faster—much faster—than Zoom’s during the pandemic, Google’s during the early 2000s, and even Standard Oil’s during the Gilded Age. If the company’s current growth rate were to continue, then by early next year it would be taking in more money than any company in the world.

The cause of this turnaround can be summarized in two words: Claude Code.

When Anthropic released an update to its flagship product in November, AI seemed to cross some invisible threshold between interesting gadget and life-changing technology. With Claude Code, a team of autonomous AI agents could take over your computer and, in minutes or hours, complete programming tasks that previously would have taken humans days or weeks. In many cases, the final product required few, if any, human changes. Other companies have since released updates to their own coding tools, such as OpenAI’s Codex and Anysphere’s Cursor, which are considered nearly as impressive as Claude Code. “This really was a step change,” Ethan Mollick, a co-director of the Generative AI Lab at the University of Pennsylvania, told me. “For years now, we’ve been in an era of chatbots that mostly just say things. Now we’ve officially crossed into the era of agents that can actually do things.”  

The implications are enormous for any industry that relies heavily on software. Jordan Nanos, a member of the technical staff at the semiconductor-research firm SemiAnalysis, told me that his small team produces four times as much software as it did last year despite having the same number of employees. Tim Fist, the director of emerging-technology policy at the Institute for Progress, told me that “it feels sort of ridiculous” to be working on his computer-science Ph.D., because “Claude can basically do 90 percent of it.” Meta recently announced that it will lay off 10 percent of its workforce; a few months ago, Mark Zuckerberg told investors that, thanks to AI, “projects that used to require big teams” can “now be accomplished by a single very talented person.”

Academic research backs up these anecdotal claims. Last year, the think tank Model Evaluation & Threat Research ran an experiment in which software developers were randomly assigned to do coding tasks with or without the use of AI. To everyone’s surprise, developers completed tasks 20 percent slower when using AI, in part because they were spending so much time correcting the AI’s output. (That study factored heavily into an article I wrote in September suggesting that AI was indeed a bubble.) Recently, however, the same researchers re-ran the experiment using the latest AI coding tools. This time, the same developers completed tasks almost 20 percent faster with AI than those without it. And that’s probably an underestimate, because some power users had become so hooked on AI tools that they refused to participate in the second experiment.

Now that AI is providing clear productivity benefits, companies have few qualms about spending money on it. By one estimate, the percentage of American businesses with a paid subscription to at least one AI tool or service has risen from about a quarter at the beginning of 2025 to over half today. Researchers at Goldman Sachs who conducted interviews with 40 software companies about their AI use in mid-April found that many were “overrunning their initial budgets” for AI tools “by orders of magnitude,” with some companies already spending as much as 10 percent of their total engineering labor costs. “It typically takes enterprises much much longer to adapt to new technologies than it takes consumers,” Gabriela Borges, a software analyst at Goldman Sachs, told me. “So the speed at which we’re seeing companies adapting these tools is actually quite surprising.”

This dynamic has turned the economics of AI upside down. Six months ago, data-center investments appeared to be getting ahead of demand; today, demand is rising so fast that AI companies lack the physical infrastructure to satisfy it. Anthropic has been forced to limit customers’ use of its coding tools during “peak hours,” and OpenAI has scrapped its video-generation app to free up computing power. Semiconductors are in such high demand that even Nvidia’s fourth-best AI chip, released back in 2022, costs more today than it did three years ago.

When demand for your product outpaces supply, you tend to make a lot of money. In just the past two months, Anthropic’s annual run rate—the amount the company is on track to make in the next year based on the current month’s revenue—has gone from $14 billion to $30 billion. As Axios’s Jim VandeHei recently pointed out, Anthropic grew four times as much during the first quarter of this year than Google did over three years during its peak expansion. And although Anthropic is the standout, the rest of the sector is growing quickly too. OpenAI’s annualized revenue increased by nearly 20 percent from December to February. Google, Microsoft, and Amazon reported in February that their cloud revenue had grown by 48 percent, 39 percent, and 24 percent respectively, compared with the year prior, largely driven by AI firms using their services. CoreWeave, a “neo-cloud” company that rents out chips and data-center space to AI companies, saw its annual revenue grow by 168 percent last year; the chipmaker Micron’s revenue nearly tripled. “It’s very important to emphasize that this pace of revenue growth is absolutely not normal,” Azeem Azhar, a widely cited AI-industry analyst, told me. “Even the biggest AI boosters, myself included, have been caught by surprise by just how fast these companies are taking off.”

Perhaps most important, the AI models behind all of this revenue growth keep getting better. In early April, Anthropic announced Mythos, a new model apparently so powerful that the company did not release it to the public. Mythos has blown away just about every benchmark of AI progress, including completing complex coding tasks and solving graduate-level problems across a range of subjects. (It also has discovered cybersecurity vulnerabilities that had gone undetected by humans for decades, hence its limited release.) OpenAI’s newly released GPT-5.5 isn’t far behind. “On basically every indicator we have, we were already seeing a big acceleration in the pace of AI progress,” Jean-Stanislas Denain, a senior researcher at Epoch AI, a think tank that measures AI capabilities, told me. “And that was before Mythos.”

Some people, however, still believe that the AI sector only appears to be on solid footing. In this telling, surface-level indicators are masking what is, in fact, the peak of a speculative frenzy.

Flagship AI companies, including OpenAI and Anthropic, might be bringing in lots of revenue, but they aren’t yet profitable. They are still spending all of that money and more to cover the cost of developing their next model. In order for these companies to turn a profit, their revenues need to continue growing quickly for at least a few more years. (Anthropic expects to turn a profit in 2028 and OpenAI in 2030.) The question is whether their current growth rates are sustainable.

The pessimistic case starts from the premise that software development is different from the rest of white-collar work. Coding involves huge amounts of training data, a relatively limited range of possible outcomes, and outputs that can be objectively evaluated—all of which makes it ideally suited for AI automation. That isn’t true of all knowledge work. A legal brief or marketing campaign cannot be quickly checked against some objective measure of excellence, and relatively little domain-specific data exist to train bots on such tasks. That could make companies in those fields less willing to spend on AI products. “Even if white-collar workers use these AI tools for some things, it won’t look like anything close to what we’re seeing right now for coders,” Paul Kedrosky, a managing partner at SK Ventures and research fellow at MIT who has become a prominent proponent of the bubble thesis, told me.

AI companies are investing even more money into chips and infrastructure in anticipation of even more demand. But if the current boom turns out to be limited to coding, then by the time the new data centers are built, there won’t be enough customers to pay for them. Instead of turning a profit, the AI companies—not to mention the chipmakers, data-center builders, and cloud providers—will be stuck with huge losses on their books. At that point, the AI bubble will be even bigger than it was six months ago, and the pop could be even more painful. “The best analogy to me is the real-estate market in 2006, 2007,” Kedrosky said. “Market hype leads to more demand. More demand makes you think you need more supply. Before you know it, you’ve built more homes than anyone can actually afford. And eventually it all falls apart.”

This is where a debate superficially about finance turns out to hinge on deeper philosophical questions about the nature of human work. A separate school of thought holds that most knowledge-work tasks share the same basic structure, and thus can be automated. As a group of analysts at SemiAnalysis recently argued, all knowledge work, including coding, is made up of four basic components: consuming information (“Read”), applying existing knowledge (“Think”), producing a structured output (“Write”), and checking that output against some standard (“Verify”). Coding might have certain qualities that make it easier for AI to perform this basic four-step process—such as more data to read and objective standards to verify an output—but that doesn’t make the field unique.

For instance, even if no objective standard for a “good” academic paper or legal brief exists, experts in those fields tend to have a clear sense of better or worse. Perhaps AI systems could develop such a sense if given enough high-quality examples to learn from. “There’s clearly a spectrum here, with coding on one end and things with really hard-to-judge outputs, like short-form fiction writing, on the other,” Mollick, the University of Pennsylvania professor, told me. “But a lot of knowledge work—law, finance, consulting, marketing—falls somewhere in the middle. And many of the tasks in those jobs are probably closer to the coding side of things.”

As a professional writer, I find this suggestion unpalatable. But the evidence in favor of it is growing. A recent MIT study attempted to quantify the ability of AI systems to perform some 3,000 real-world white-collar tasks, such as designing an education curriculum and creating a product-launch plan. After the AI models performed the tasks, the researchers asked human experts to rate the output. Any output that human reviewers considered good enough to be sent to a manager with no human edits was considered “complete.”

In mid-2024, leading AI models were able to successfully complete 50 percent of white-collar tasks that would take a human three to four hours to complete; just over a year later, they were able to complete 65 percent. At that rate, the authors estimate, AI systems will be able to complete 80 to 95 percent of text-based tasks by 2029. “This pace of improvement isn’t quite as fast as what we’ve seen with AI and coding,” Matthias Mertens, one of the co-authors of the study, told me. “But it’s still really, really fast.”

That study considered only chatbots. So-called agentic tools, such as Claude Cowork, are capable of taking over a worker’s laptop and performing a whole suite of noncoding tasks, such as creating PowerPoint decks, sending emails, and scheduling meetings. And workers are only beginning to learn how to use them. Azhar, the AI-industry analyst, told me that when he and his colleagues are planning to launch a new product, they will have their AI agents create a panel of artificial customers broadly representative of their actual customer base, conduct a focus group with these robot customers, produce a report based on what they’ve found, and then turn that report into a list of specific product improvements. All of this happens while the human product managers are sleeping; the end result is waiting for them when they wake up. “That is the kind of process that used to require a whole team of workers and months of time,” Azhar said. “Now we’re doing it three times every week.”

Six months ago, people arguing that AI was a bubble were pointing to real-world facts, whereas people arguing against the bubble hypothesis were making speculative promises about the future. Today, the roles have reversed. AI’s explosive growth may yet encounter some new unforeseen obstacle. But the burden of proof has shifted to the naysayers.

Fury took over the city of Seattle this week after its “White Female Mamdani” mayor, Katie Wilson, was caught blowing precious taxpayer dollars on a giant, 60-foot-long personal limousine with its own dedicated lanes of traffic.

“As if it’s not enough that she’s riding high in her personal electric limo for herself and her Transit Riders Union posse, she’s also demanding it have its own dedicated lane of traffic painted red with the blood of her sworn enemies,” said one source who wanted to stay anonymous due to fear of retribution. “That socialist psycho even has her staff literally roll out a red carpet to it before she boards and heads back to her home on The Hill so she can keep looking down on the rest of us poor car drivers.”

Asked if she planned on ever keeping her high public office from going to her head and exploiting taxpayer dollars for such personal luxuries, Mayor Wilson said she would be doing nothing of the sort.

“I’m tired of everybody hating and acting like they don’t want to live the way that I live,” Mayor Wilson said cooly as she adjusted a pair of Dolce & Gabbana sunglasses. “Don’t be ridiculous—everybody wants this. Everybody wants to be us.”

At press time, King County Executive Girmay Zahilay had also reportedly been caught using taxpayer dollars on personal dance party limos installed with stripper poles.