- BBC World News
Dan Price is tired of billionaires who do charity work and donate to the underprivileged.
It bothers him because he thinks it is a good excuse for not doing what they “really should” do: pay more taxes and better wages.
Price is the founder and CEO of Gravity Payments, a company that processes credit card payments.
He became known internationally when in 2015 he announced that he had decided to lower his salary by US $ 1 million and raise the salary of all his employees.
This is how he established a minimum salary of US $ 70,000 a year for the 120 employees of his company.
And he did so because he considered that it was a “moral imperative” to reduce salary differences between the heads of a company and their employees.
Six years later, Price thinks it was worth it.
He is now embarking on getting a wealth tax passed for the first time in American history.
His goal is to get the measure implemented in Washington state, though he’s also promoting the idea nationally.
“One of the main criticisms I hear from people is that billionaires do not need to pay more taxes because they make donations,” Price tells BBC Mundo.
And since every time they make a donation they receive great press coverage, he adds, that helps build a public image that favors them.
“Actually, the amount they donate is a fraction of what they would pay if their tax rates were in line with those of the working class, “Price explains.
“Billionaires Pay the Tax Rate more low of any income group nationwide. “
For example, in Washington state, “the richest pay 3% of their income in taxes, while the poor pay 18%,” says the businessman.
While he acknowledges that billionaires do charity work for a variety of reasons, he assures that donations ultimately benefit them, as they allow them to avoid making a much larger contribution to solving systemic problems.
“Billionaires use the philanthropy scam to prevent systemic change from occurring, “Price argues.
“That’s why I say that multi-million dollar philanthropy is a public relations scam.”
Like him, there are other Wall Street business and investor groups who advocate a tax hike for America’s richest.
The best known is the organization “Millonarios Patriotas”, which proposes tax wealth starting at $ 1 billion.
“We are talking about the richest, a few hundred people,” explained the group’s president, Morris Pearl, in a dialogue with BBC Mundo at the beginning of February.
Pearl is a former director of BlackRock (one of the largest investment firms in the world) who now lives off the profitability of his investments, after a successful career on Wall Street.
During the pandemic, his own fortune has grown even more thanks to the fact that stock markets are at all-time highs.
“I think we have to change direction and have the richest pay more taxes than the common citizen who works for a living,” says Pearl.
Disincentive to investment
But those who oppose these kinds of proposals argue that raising taxes is a disincentive to investment.
Therefore, a tax increase would make many entrepreneurs and investors move your money to other countries to achieve greater profitability.
In fact, in December 2017, the Donald Trump administration managed to pass the biggest tax cut in more than three decades.
“We want a tax reform that favors growth, that favors jobs,” said the former president at the time.
Chris Edwards, director of Tax Policy Studies at the Cato Institute in the United States, told the BBC’s Business Daily program that it is not productive to increase taxation of the richest with a wealth tax.
“They already pay high taxes,” he argued.
“Most of its assets are invested in businesses. For example, Amazon’s Jeff Bezos generates economic growth and thousands of jobs,” he said in an interview in early 2020.
“Most of the wealth in the US is generated by the innovation of billionaires like Bezos or Gates, by people who create new businesses that make them rich, but that benefit everyone, “he said.
Philanthropy amid a wealth boom
Elon Musk, Jeff Bezos, Mark Zuckerberg and six others tech moguls earned $ 360 billion during the pandemic, according to data compiled by the newspaper The Washington Post, based on the Bloomberg Billionaires Index.
Tech firms had a year of high returns. So much so that just six tech companies – Apple, Facebook, Amazon, Netflix, Microsoft and Google – were responsible for more than 60% of the S&P 500 index’s gains in 2020, according to Yardeni Research.
That is why the fortunes of the tycoons in a sector, dominated by few players, skyrocketed during the covid-19 pandemic.
According to Megan Tompkins-Stange, Professor of Public Policy at the University of Michigan, Jeff Bezos, founder of Amazon, donated US $ 150 million, equivalent to 0.1% of the profits he accumulated during the pandemic.
“Small increases in taxes look much better than small donations,” he wrote on his Twitter account.
Elon Musk would have donated 0.004%, Zuckerberg 0.36%, and Bill Gates 7.3% of the income obtained during the pandemic, according to the US newspaper.
However, the figures vary substantially depending on how the calculations are made and the source of information used. On the other hand, some millionaires make anonymous donations and many are not required to disclose the amounts given.
At the end of December, The Chronicle of Philanthropy published its annual ranking of the main charitable contributions of individuals and their foundations in 2020.
The first place is occupied by Jeff Bezos with his donation of US $ 10 billion for the creation of his own environmental fund “Bezos Earth Found”, dedicated to providing contributions to organizations that fight climate change.
On the list (organized according to the value of the amounts) Bezos reappears in seventh place for his $ 100 million donation to the Feeding America organization.
It is also in the ranking Mark Zuckerberg with two donations given to the same organization: Center for Tech and Civic Life. The first is US $ 250 million and the second is US $ 100 million.
The list also includes well-known donors like Phil Knight, Nike co-founder. The publication warns that two famous billionaires in the world of donations, MacKenzie Scott (Jeff Bezos’ ex-wife) and Jack Dorsey, CEO of Twitter, they do not appear on the list because their contributions were divided between different causes.
He estimates that adding up the various contributions, Scott contributed nearly $ 4 billion and Dorsey $ 300 million to more than a hundred non-profit organizations.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.