Taxes Should Promote Philanthropy

By SAM URETSKY

Millionaire (noun):  one whose wealth is estimated at a million or millions (as of dollars)

(archaic) a rich person

There was a time when the filthy rich were a socially useful group.  A person who accumulated enough money to have a bit left over at the end of the year would write a check to a symphony orchestra , university, hospital, opera company, or museum. In return, they were given a plaque, and most likely a dinner, which was also useful since good food is also a part of culture and should be considered among the arts.

The donations weren’t all that expensive, since tax rates could be fairly high. In 1918 the top marginal rate was 77% and in 1944, the top rate peaked at 94% on taxable income over $200,000 (a bit over $3 million in today’s dollars).

Do it right and you could influence the way you’re remembered long after your death. US News ranks Rockefeller University #76 among global universities while Ida Tarbell’s “History of the Standard Oil Company” is still in print, but rarely read. Yale University, ranked #4 among US national universities, is named in honor of Elihu Yale, who donated the proceeds from the sale of nine bales of goods, some books, and a portrait of King George I.

Today, the billionaires have higher aspirations. On Jan. 26, 2015, the New York Times reported “Koch Brothers’ Budget of $889 Million for 2016 Is on Par With Both Parties’ Spending.” According to the report, “In the last presidential election, the Republican National Committee and the party’s two congressional campaign committees spent a total of $657 million.” What hath Koch wrought?

More recently Jeff Bezos ($202 billion) and Elon Musk ($173 billion) have been engaged in a race to space, Bezos with his company Blue Origin and Musk with  Space-X. They have been competing for a government contract  to build a module that will land the next US astronauts on the moon, but  also for bragging rights, which may be more important.  The first company to land an astronaut on the moon will be listed in the history books, the second might rate a footnote.

It’s worth pausing to read Neil de Grasse Tyson’s “Astrophysics for People in a Hurry.” Dr. Tyson is the closest thing we have to a public intellectual, and his arguments in favor of space exploration are well written, convincing, and like the best writing, fairly brief. At the same time, it seems fair to ask whether a race to an airless, waterless satellite ranks ahead of other needs closer to home. In November 2015, the journal Health Affairs published a report, “Food Insecurity And Health Outcomes,” which stated, “Food insecurity, a condition in which households lack access to adequate food because of limited money or other resources, is a leading health and nutrition issue in the United States. In 2013 almost 50 million Americans (14.3%) were food insecure. About one-third of these were at a more serious level known as “very low food security.”

Feeding America projects that 42 million people (1 in 8), including 13 million children (1 in 6), may experience food insecurity in 2021. The COVID-19 shutdowns have almost certainly exacerbated the problem. Starving children vs. walking on the moon?

An argument can be made that the billionaires are spending their own money, and can do what they want with it. Mr. Bezos is reportedly buying a $500 million yacht that will have its own support yacht with a helipad. But it seems worth asking whose money they’re really spending. According to Forbes, “Elon Musk has moved his primary residence from California to Texas … which means the three richest people in American—Musk, Amazon CEO Jeff Bezos and Microsoft cofounder Bill Gates—now all reside in states that don’t collect income tax.” Their federal income tax levels are unknown, because they each have a phalanx of lawyers and accountants ready to find every loophole in the tax code, as well as a collection of politicians who are expert at creating loopholes.

Warren Buffet, another billionaire, has said that his secretary is paying a higher tax rate than he is. If the billionaires were playing on a level field they would be entitled to full discretion on how they spend their money, but when it comes to taxes, they have a hellova home field advantage.

On March 1, Senators Elizabeth Warren and Bernie Sanders proposed a wealth tax – 2% per year on households and trusts from $50 million to $1 billion, and 3% on wealth over $1 billion. There are problems with the plan that would have to be worked out, but the truth is, these guys are taking ego trips to the moon with our money, and we should have some say in how it’s spent.

Sam Uretsky is a writer and pharmacist living in Louisville, Ky. Email sdu01@outlook.com.

From The Progressive Populist, July 1-15, 2021

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