Shocking: Super-Rich Man Rails Against Tax, Citing “Philanthropy”
Billionaires Descend On Davos To Disparage The Communist Method Of “Taxation” And Announce Their New Plan: Pretending To Be Moral
A few days ago at the World Economic Forum billionaire Michael S. Dell, founder of Dell Technologies and alleged creator of British singer-extraordinaire A Dell, railed against the revolutionary plan from New York congresswoman Alexandria Ocasio-Cortez to introduce “marginal tax rates”, in which people that have a lot of money (like himself) give some of it to programmes that either help save the environment or human lives. In his unprecedented step against the idea that he should be told to give some of his money to the needy, he called out the Democrat over her plan to introduce 70% tax rates on anyone that has decided to have a lot of money, as all people are (of course) able to do.
It just goes to show that in this bitter and divided partisan world, all people of one particular socioeconomic demographic can unite behind one cause: wanting to avoid paying their fair share of tax. The spirit of co-operation fostered by the top 1% and people like Michael Dell has prompted a new sense of social change in these troubled times, where billionaires are now openly sharing their reluctance to help people below the poverty line, currently living on government support and help schemes alone.
This proposal from Alexandria Ocasio-Cortez is ridiculous. If I was her, I’d be calling for a world where everyone who chooses to have a lot of money pays no tax on their smart decisions. People like her supporters, who decide to be poor, should instead just get more money or work harder. And those who just decide to stay poor for the hell of it should be paying 150% tax: why should I have to support those that have let themselves fall victim to the capitalist system I support so dearly?
The lawyers of Davos-attending billionaires have just perked up at the opportunity to sue me, a British student, for global and devastating defamation of their brand — so let me be clear, no one at Davos said those words (in public). However, Michael Dell, a man worth more than $25bn, did criticize Ocasio-Cortez’s plan at Davos’ version of a debate/roundtable, saying he “[didn’t] think it would help the growth of the US economy.” When asked why he gave a simple and frankly overused reply: “Well, name a country where [a 70% rate] has worked. Ever.” Unfortunately for Michael Dell, as Erik Brynjolfsson quickly pointed out, the U.S. itself actually had top marginal rates exceeding 70% in the post-Second World War period — in fact, the top marginal tax rate in 1952 and 1953 was 92%.
It is important to note, however, that the top 1% averaged a tax rate of 42% (in 2014, the top 1% averaged 36.4% tax) — as very few people within the US actually fell into the 92% bracket. Although it is still a big jump from 36.4% to 42%, it is not correct to say that taxing all of the 1% at rates higher than 70% “worked under Eisenhower”. Equally ridiculous, however, is the idea that lowering tax rates on the rich any further would promote job creation or “philanthropy”.
In fact, no matter how much billionaires claim to give to charitable causes it almost always works out to be less than what they would be paying if they paid even slightly higher taxes or stopped avoiding tax altogether. “Philanthropy” is in the most part a facade that not only means billionaires get to keep more of their precious gold to themselves but it also takes the re-investment of money to help people away from the public — i.e., the electorate can no longer decide where they feel it should be put — making philanthropy projects susceptible to personal wishes, bribery and corruption without any of the money actually helping the people that need it.
Looking at numbers alone (without considering where the money is donated to!), some billionaires are, however, notably exempt from using the facade of philanthropy to hide their unwillingness to part with their cash — the only case in which tax avoidance becomes partially less objectionable. The U.S. government currently spends 16% of federal spending (or $600bn) on defence spending and 6% of spending ($229bn) on debt interest, with a large majority of the rest going to help people — or ‘assistance causes’. Quick note: this next part is not a scientific method of spending! It rounds numbers, assumes that all tax is spent evenly across spending targets and only takes into account net worth and not income! But at the moment, it’s the best way I can present tax-philanthropy discrepancy with easy data.
Adding the percentage of spending that the U.S. government spends on specifically helping people or assistance projects, including science (1%), international affairs (1%), education (3%), veterans’ benefits (4%), Medicare and health (27%) and social security (33%) amounts to just under 70% of all federal spending on ‘assistance causes’. If a billionaire pays the current top marginal rate of 37%, then the amount going to ‘assistance causes’ as part of his tax payments is 25.9% of their income. As a result, the only 2 philanthropists from the New York Posts’ philanthropy listings that beat this loosely-calculated 25.9% value are Warren Buffet and the controversy-plagued Gates Foundation.
Unfortunately, a lot of billionaires now see philanthropy as a valuable market: being even a little charitable enjoys a PR-boost for a company that results in the person at the top getting even more money, which is certainly not re-invested into further philanthropic causes — or at least exceptionally rarely put towards people who need it.
So is it really a shock that billionaires like Michael Dell are so against Alexandria Ocasio-Cortez’s tax proposals, which would mandate that their money actually does go to help people other than them? For all the issues and criticism that any government gets for its inefficiency, it is clearly better at allocating money towards causes where it would substantially benefit people over a private corporation that gives money as an extension of a marketing department. To be clear: I still praise billionaires like Warren Buffet or the Gates family for not being greedy and hungry with their money and trying, at least, to put it back towards people who need it.
But as Dutch historian and Davos attendee Rutger Berman said, “we can talk for a very long time about all these stupid philanthropy schemes […] but, come on, we’ve got to be talking about taxes. That’s it. Taxes, taxes, taxes.”
