Super-rich call for more taxes on themselves
Is tax the best way to share wealth? Eighty-three of the world’s richest people have written an astonishing letter to governments asking for more of their money to be taken away from them.
Few letters in recent times have made more surprising reading. Among those who have signed it are the co-founder of Ben and Jerry’s ice-cream, Jerry Greenfield; Walt Disney’s great-niece Abigail Disney, and the screenwriter Richard Curtis. “Today,” it says, “we, the undersigned millionaires, ask our governments to raise taxes on people like us. Immediately. Substantially. Permanently.”
The coronavirus crisis, they argue, has had little effect on them, but it will push hundreds of millions of others into poverty – and the problem is too big for charities to solve. Governments must take responsibility and they should start by calling on the super-rich.
“We are not the ones caring for the sick in intensive-care wards [...]. But we do have money, lots of it.”
The letter concludes that the pandemic offers a unique chance to “rebalance our world” before it is too late. “So please. Tax us […]. Humanity is more important than our money.”
The millionaires are right to say that the crisis has affected the poor far more than the rich. The world’s wealthiest man, Jeff Bezos, has given $100 million (£81m) to counteract it – but with many more people depending on Amazon for deliveries, his fortune has increased by $75 billion (£60bn) in the last six months.
There are over half a million “ultra-wealthy” people on the planet, defined as owning more than $30 million (£24m) – more than the populations of Iceland, Malta or Belize. But historically they have been more interested in dodging taxes than in paying more.
Leona Helmsley, a New York hotelier who famously declared: “Only the little people pay taxes”, was sentenced to 16 years in prison for hiding tax liabilities amounting to millions of dollars – though she only served 19 months.
The Chicago gangster Al Capone, who was held responsible for many violent crimes including the St Valentine’s Day Massacre, was finally brought to justice when he was given an 11-year sentence for income-tax evasion.
More recently, the actor Wesley Snipes served two years in prison for failing to pay tax on earnings of $37 million (£30m). The comedian Jimmy Carr was criticised for paying just 1% tax on £3.3 million, while singer Gary Barlow and two other members of Take That were forced to pay £20 million after investing in a tax-avoidance scheme.
Many rich people, of course, have given away a large proportion of their money. But they have usually done so by donating to good causes or – like Bill and Melinda Gates – setting up their own charitable foundations.
Is tax the best way to share wealth?
Disparity or charity
No. Giving money to Donald Trump to build his wall or to Boris Johnson to pay for Brexit seems wrong to many people. If you had a spare billion, why not set up your own foundation, like Bill Gates who focuses on eradicating disease, and control where the money goes?
Yes, of course, tax is the best way. Giving to charity cannot be compared to paying tax. Charities are there to fix problems. Governments can redistribute wealth from the richer to the poorer. Charities are run by boards of half a dozen people. Democratically elected governments represent the will of the entire people – whether you agree with them or not.
- Which good cause would you most like to help support with money?
- Is trying to avoid tax immoral?
- Design a poster encouraging people to pay their tax because it is the right thing to do.
- Make a list of three new taxes that you would bring in if you were leader of your country – and three that you would abolish.
Some People Say...
“Little else is requisite to carry a state to the highest degree of opulence […] but peace, easy taxes, and a tolerable administration of justice.”Adam Smith (1723-1790), Scottish economist
What do you think?
Q & A
- What do we know?
- A huge proportion of the world’s wealth is owned by an extraordinarily small number of individuals. According to Oxfam’s Time To Care report issued in January, the 2,153 richest people (the billionaires) own more than the 4.6 billion poorest. The 22 wealthiest men in the world have more money than all the women in Africa put together.
- What do we not know?
- One main area of debate is around whether having high taxes for the very rich is counter-productive. Governments that do so generally find that the people in question simply move to other countries. It is arguably more efficient to attract them with low taxes, in the hope that the money they spend will provide a good income for other people who can then be taxed as well.
- Abigail Disney
- US documentary maker whose grandfather Roy was Walt Disney’s older brother and business manager. She created the Daphne Foundation to combat poverty in New York.
- Richard Curtis
- A British writer and director whose films include Four Weddings and a Funeral, Mr Bean’s Holiday, and Love Actually. He co-founded Comic Relief.
- A volcanic island just south of the Arctic Circle. Its parliament, the “Althing”, is thought to be the oldest in the world, dating from 930.
- An island country in the Mediterranean Sea. It was of vital strategic importance in WWII, and survived such heavy bombing by the German air force that it was awarded the George Cross.
- A country in Central America which used to be called British Honduras. It became independent in 1981.
- Leona Helmsley
- Nicknamed “the Queen of Mean” because of her penny-pinching ways. She died in 2007, leaving $12 million (£10m) to her dog.
- A person who owns or manages a hotel or chain of hotels.
- St Valentine’s Day Massacre
- In 1929, Capone’s henchmen shot his rival, Bugs Moran, and six others dead in a garage. But because Capone delegated his dirty work to others, he eluded the police until they had the idea of charging him with tax fraud.