You are not buying what America’s billionaires sell. The CEO known for raising his employees’ base salary to $ 70,000 says wealthy people who donate their money and are rewarded with “shiny items, a hospital named after them, and a massive tax write-off” amount to “one of the Capitalism’s Biggest Public Relations Scams “.
“‘One of the biggest public relations scams of capitalism is the’ philanthropist ‘. The average billionaire donates 1% of his fortune to charity annually, less than non-billionaires. But when you donate $ 200 you don’t get shiny items, a hospital named after you, and a massive tax write off. ‘ ”- Dan Price, CEO of Gravity Payments
As proof, Price cited a recent ranking of the biggest charitable contributions of 2020, which included big-money donors like Amazon AMZN, -2.13% founder Jeff Bezos. Critics of wealth inequality have pointed out that billionaires have seen their fortunes increase during the pandemic, but the contributions they have made to charity represent a small fraction of their growing wealth. Price was inspired to comment on philanthropy because the state of Washington is debating a proposal to create the nation’s first state wealth tax, he told MarketWatch. The tax would apply to people whose net worth exceeds $ 1 billion. Price said one of the most frequent criticisms he has heard of the proposal is that “billionaires don’t need to pay taxes because they already donate.” “In reality, the amount they donate is a fraction of what they would pay if their tax rates were in line with those of the working class,” he said. Billionaires pay the lowest tax rate of any income group nationally, Price added. In Washington state, the richest pay 3% of their income in taxes, while the poor pay 18%, he said. (That’s according to a report from the Institute on Taxation and Economic Policy, a left-wing think tank.) “I think billionaires donate for various reasons, but it is clear that giving away the equivalent of what is in their sofa cushions helps them avoid having to face higher bills that would really make a difference in solving systemic problems.” Price told MarketWatch. The average American donates about 2% of their disposable income to charity each year, according to Giving USA, an annual report on charitable giving. It‘s hard to estimate how much of their wealth billionaires give away. They don’t always publicly advertise their charitable donations, and many are not required to reveal how much they give away. Bezos was the number one donor of 2020, according to the Chronicle of Philanthropy. He pledged $ 10 billion to establish the Bezos Earth Fund, but only a portion of that money went to charity last year. The fund provided $ 791 million in grants to environmental groups in 2020. Bezos also donated $ 100 million to Feeding America, a national network of food banks. Meanwhile, Bezos’ net worth soared to around $ 188 billion by November 2020, according to the left-leaning Institute for Policy Studies, a frequent critic of Bezos and other billionaires. Using those figures, which are a moving target, Bezos donated roughly 0.47% of his net worth in 2020 (an Amazon spokesperson declined to comment). America’s billionaires stepped up their donations to charities in 2020, with the 50 largest donors disbursing a total of $ 24.7 billion to address pressing issues, including the pandemic and its economic consequences, and calls for racial justice. The 50 largest donations in 2019 totaled $ 15.8 billion. Despite the economic turmoil created by the coronavirus pandemic, charitable giving overall, from both billionaires and non-billionaires, increased in the US in 2020, according to a recent estimate. Price made headlines in 2015 after announcing that he would pay each employee at his company at least $ 70,000 a year. In the early months of the pandemic, Gravity, a credit card payment processor that works primarily with small businesses, saw its revenue drop by 50%. Price said he avoided layoffs by asking his employees to accept pay cuts. The company later returned the money to those employees. Price also cut his own salary from $ 1.1 million to $ 70,000 along with the rest of his employees. Some observers have suggested that if he had kept his own salary high, he would have more money to donate to charity, he previously said. But Price doesn’t think “the world needs another billionaire philanthropist,” he said, “because we’ve been relying on billionaire philanthropists for so long, and I really don’t think that’s working very well for us.” He added that he would prefer to see a system with more “justice and integrity” and companies that serve their workers.