Anand Giradharandas recently nailed it in a New York Times article when he exposed the fantasy of the “Good Billionaire.” He, among many other writers, have been questioning whether there should even be billionaires. When ProPublica revealed that Warren Buffett–the Sara Lee of billionaires (nobody doesn’t like Warren Buffet, who famously suggested that the rich should be paying more in taxes)–is the champion of the billionaire pack in avoiding paying taxes, it confirmed two things. First, the rigged tax code that creates billionaires and excessive wealth is a systemic problem, not about individual virtue or behavior.
Second, it confirmed the rarified thinking of the rich: we can do a better job at deciding where the money should go than a democratically elected government. Of course, that is sometimes true. Billionaire philanthropists have filled some of the gaps in public investment. A better democracy could also lead to filling some of the gaps.
However, as former Supreme Court Justice Oliver Wendell Holmes said, taxes are the price we pay for civilization. He didn’t say tax avoidance, hoarding wealth, or even charitable contributions. We live in a democracy (supposedly), where taxes are meant to be collected according to one’s ability to pay, and then distributed based on a common sense about how best to help our country and all of its citizens thrive.
Democracy is about collective choices. It doesn’t work when a handful of billionaires make all the decisions for the rest of us: Is the Koch fountain in front of the Metropolitan Museum of Art more important than funding art education in public schools, can climate change wait ten years for Bezos’ $10 billion commitment to be fully spent, or should we trust the same people who fund political campaigns and lobbyists to do their bidding to help protect voting integrity?
Buffett made the following statement in responding to the ProPublica article about his tax avoidance: “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt.” What’s truly ironic (or absurd) about Buffett’s statement is that he and his little club of billionaires are the reason we have mounting deficits. Through monopolistic practices, tax avoidance, low tax rates, and wealth extraction from the middle and working classes, our economic growth, climate, and virtually all social indicators have suffered as has the tax base that provides for the common good.
The 90-year-old Buffett will certainly have his pay-no-taxes dream come true. Rather than pay a dime in estate taxes to help fund government programs – although a $30-40 billion tax bill is not exactly a dime – all of his money will likely sit in someone’s private foundation, probably the Bill and Melinda Gates Foundation.
Now we’re learning that Bill Gates isn’t such a good billionaire either, and that both his personal life and his approach to philanthropy have a dark side. Perhaps if he had paid his fair share in taxes, the government might have used the money to develop a vaccine that would be more readily available than the Gates-funded ones, and half a dozen new drug billionaires would not have been created by taking advantage of the Covid crisis and their patents.
The CCC is approaching its one-year anniversary. We launched (appropriately on Bastille Day) the Crisis Charitable Commitment to spur giving by the rich individually and through their donor-advised funds and foundations. The nation has suffered at the hands of a pandemic, so it would seem that those most able to give back would readily do so. We now have 92 signatories, individuals and foundations that are giving at levels twice as high as their peers–an impressive $550 million. But where are the billionaires? We have only one billion-dollar foundation and NO individual billionaires signed on. In fact, based on news reports, there is one and only one billionaire, MacKenzie Scott, who has met the Charitable Standard for individual giving in 2020 at a level commensurate with her bank account (minimum 5% for wealth over $25 billion). Meanwhile, the almost 700 US Billionaires have increased their wealth by more than $1 trillion since the pandemic began and have accumulated total assets in excess of $4 trillion.
There are only two ways to reduce this massive hoarding of wealth and all of the problems associated with it: first, encourage, as we do with the CCC, a voluntary increase in charitable giving, ideally in ways that transfers decision-making to people and organizations close to the ground; and second, taxes. It must be philanthropy AND taxes, not as Mr. Buffett suggests, philanthropy or taxes. When the 700 richest households in America start to make charitable contributions at a reasonable level on top of paying their fair share in taxes, they may eventually no longer be billionaires, but they will be good.
Thanks for reading, and a particular thanks to all of the CCC signers for stepping up to the plate.