As legislators in Washington State debate a proposal to create the nation’s first state wealth tax, one Seattle-based CEO has weighed in with a tweet calling billionaire philanthropy “[o]ne of capitalism’s biggest PR scams.”
According to the Chronicle of Philanthropy, giving by the fifty biggest donors in the United States totalled $24.7 billion in 2020 — up from $15.8 billion in 2019 — with Jeff Bezos’ $10.15 billion in giving topping the list. But with the net worth of the billionaire class soaring during the pandemic, many billionaires are facing increased scrutiny and criticism for giving a relatively small percentage of their wealth to charity. Only ten billionaires on the 2020 Forbes 400 list have given more than 20 percent of their wealth over their lifetime, and billionaires such as Bill Gates and Warren Buffett continue to see their net worth grow by leaps and bounds even as they’ve pledged to give half of their wealth to philanthropic causes.
The disparity between the rapidly increasing wealth of the ultra-wealthy and the struggles of millions of ordinary Americans during the pandemic has not escaped the attention of philanthropic and nonprofit leaders, who repeatedly called on Congress in 2020 to temporarily double the mandatory payout rate for private foundations to 10 percent and mandate a 10 percent payout for donor-advised funds as a way to unlock much-needed funds for communities and charities impacted by COVID-19.
To help address some of those impacts, Washington State’s House Bill 1406 would impose a 1 percent wealth tax on households in the state with an income above $1 billion — the first such tax in the nation. According to a Tax Foundation analysis, while there are about a dozen billionaire households in the state, just four of those households — Amazon.com CEO Jeff Bezos; his former wife, MacKenzie Scott; Bill & Melinda Gates Foundation co-chairs Bill and Melinda Gates; and former Microsoft CEO Steve Ballmer and his wife, Connie, co-founders of the Ballmer Group — would account for 97 percent of the revenue from such a tax.
Critics of the proposal argue that it is punitive and that “billionaires don’t need to pay taxes because they already donate.” But as Gravity Payments CEO Dan Price tells MarketWatch, “In reality, the amount [billionaires] donate is a fraction of what they would pay if their tax rates were in line with the working class.”
Price, who made headlines in 2015 for announcing he would pay every employee at his Seattle-based payment processing company a minimum base salary of $70,000 — and cutting his own $1.1 million salary to $70,000 — had argued in a tweet over the weekend: “The average billionaire donates 1 per cent of their fortune to charity yearly — less than non-billionaires. But when you donate $200 you don’t get glowing articles, a hospital named after you, and a massive tax write off.”
Though hardly a mega-philanthropist, Price has been walking the talk at his own company, telling MarketWatch that when the company’s revenue fell by half in the early months of the pandemic, he avoided layoffs by asking his employees to take pay cuts and later paying employees back.
“I think billionaires donate for various reasons,” he muses, “but it’s clear that giving away the equivalent of what’s in their couch cushions helps them avoid having to face steeper bills that would actually make a difference in solving systemic problems,” adding “[I doubt the world] needs another billionaire philanthropist, because we’ve been relying on billionaire philanthropists for so long, and I don’t really think that’s working out very well for us.”
Source: PND
