Tell me how you feel about this:
By most accounts, if any billionaire could be considered a really good guy, it would be Warren Buffett. He seems not to care about money or possessions, he famously said years ago that the tax system should be changed so that he’d have to pay more, and he and Bill Gates established “The Giving Pledge” in 2010.
That is “a movement of philanthropists who commit to giving the majority of their wealth to philanthropy or charitable causes, either during their lifetimes or in their wills.”
Assuming the web site is up to date, 211 veryvery rich folks have signed on.
Sounds fair? Not to Anand Giridharadas, author of the book Winners Take All: The Elite Charade of Changing the World. In an Opinion piece that appeared in The New York Times, Giridharadaras called Buffett “the most dangerous kind of billionaire we have.”
Why? Because when billionaires are disreputable like the Sackler family, who knowingly profited from making opioids even more addictive, thereby leading to many deaths, we may be tempted to think in terms of better regulations or other ways to improve the system. But, he writes,
“…as America slouches toward plutocracy, our problem isn’t the virtue level of billionaires. It’s a set of social arrangements that make it possible for anyone to gain and guard and keep so much wealth, even as millions of others lack for food, work, housing, health, connectivity, education, dignity and the occasion to pursue their happiness.
“There is no way to be a billionaire in America without taking advantage of a system predicated on cruelty, a system whose tax code and labor laws and regulatory apparatus prioritize your needs above most people’s. Even noted Good Billionaire Mr. Buffett has profited from Coca-Cola’s sugary drinks, Amazon’s union busting, Chevron’s oil drilling, Clayton Homes’s predatory loans and, as the country learned recently, the failure to tax billionaires on their wealth.”
This is an important time for us to be talking about wealth and taxes. A majority of Americans—apparently, even in Joe Manchin’s West Virginia—support President Biden’s expansive plans on infrastructure and aid to families.
But talks with the Republicans have broken down because they won’t consider any type of tax increase on the wealthiest among us.
At the same time, we learned from ProPublica’s revelations based on an IRS leak that Buffett headed the list of Americans who’ve paid almost zero taxes over the years. They manage this feat, legally, because sources of their wealth, such as stocks, bonds, and real estate, are treated differently than income.
“From 2014 to 2018, Mr. Buffett’s wealth soared by $24.3 billion, according to ProPublica. (To underline, this is just the amount the fortune grew.) The amount of taxes Mr. Buffett paid over this period? $23.7 million. If middle-class Americans in their 40s enjoyed such a low effective tax rate, they would have paid a few dozen bucks per household over this same time period. Instead, as the ProPublica story notes, they paid around $62,000.”
Reading that, I felt it was worth checking to see if Buffett’s been living up to the Giving Pledge. In 2020, he gave away $2.9 billion. That made a total of $37 billion over the years, according to CNBC, but he still had about $67.5 billion worth of Berkshire Hathaway Class A (the best) stock.
Today, writes Geoffrey James in Inc., Buffett’s net worth is $82 billion.
“Buffett is 90 years old, so if he’s planning on giving away at least half his wealth, he’d damn well better get crackin’!”
James is extremely critical of the billionaires behind the Giving Pledge, which he said just “hasn’t panned out.” He states three reasons:
“1. Many billionaires give only to fake charities.”
James cites information from the Institute for Policy Studies that increasingly, such donations go to “tax-privileged private foundations and donor-advised funds” that forward little to actual charities, but do obtain tax benefits for the donors.
“2. Billionaires have totally rigged the system.”
There are a slew of ways these billionaires avoid paying taxes—beyond the offshore accounts and illegal schemes we’ve long heard about.
Although this wasn’t part of James’s article, the Associated Press observed after passage of the 2017 $1.5 trillion tax cut that money spent by lobbyists had “skyrocketed” prior to the passage of the bill, which was “hustled through Congress in less than two months and mostly written in private.”
I guess it’s not news that the billionaires’ lobbyists essentially wrote that law, but it does stand in stark relief to their professed concerns about “giving back” to society.
And it underscores how important the section of the languishing For the People Act (S.1) would be in revealing the sources of “dark money.” That battle is worth pursuing.
“3. The Giving Pledge thwarts real financial reform.”
The successful public relations aura billionaires have obtained as a result of the Giving Pledge has made financial reforms more difficult, James noted, unfairly burdening workers and small business people whose productivity has resulted in the 30 years of gains that have benefited those at the very top.
President Biden has asked for more money to help the Internal Revenue Service (IRS), which has been underfunded for years, improve its ability to enforce the tax laws affecting the wealthiest Americans. But it seems that what’s needed is greater reform of existing tax law to address the ways that the “superrich” accrue and protect their wealth.
For example, they use their wealth as collateral to take large loans so that they don’t have to sell assets and pay taxes; instead, they show losses from the loans while their fortunes increase. Maybe that’s a practice that should not be legal?
In the wake of the ProPublica disclosures, The New York Times reported that Senator Elizabeth Warren’s proposal to tax wealth instead of income through a two percent tax on the net worth of individuals with assets of more than $50 million may gain support.
According to the Times, even some Republicans are looking at possible changes in the tax code.
Senator Pat Toomey, one of the authors of the 2017 tax law that cut taxes so severely, said:
“My intention…was not that multibillionaires ought to pay no taxes. I believe dividends and capital gains should be taxed at a lower rate, but certainly not zero.”
A bipartisan effort to enhance tax equity by insisting the billionaires—“good,” “bad,” or otherwise—pay their fair share? An actual tax on wealth? Hmmm. What would Minority Leader Mitch McConnell say to that? Think we’ll see such action any time soon?