On January 22, 2020, Lauren Hirsch writes on CNBC…
- The Patriotic Millionaires, a group of wealthy people who support hiking taxes on the rich, are taking their message global at the World Economic Forum.
- In a letter, the group is advocating international tax reform. Previously, the organization has focused its message on the United States, where it has lobbied in favor of a millionaire tax and against tax loopholes for investment funds.
- The letter, which will be released under the label “Millionaires Against Pitchforks,” warns that tax evasion has “reached epidemic proportions” and has contributed to “extreme, destabilizing inequality.” It was signed by 121 people.
Abigail Disney, president and chief executive officer of Fork Films, speaks during the Milken Institute Global Conference in Beverly Hills, California, April 30, 2019.Patrick T. Fallon | Bloomberg via Getty Images
The Patriotic Millionaires, a group of wealthy people who support hiking taxes on the rich, are taking their message global at the World Economic Forum.
In a letter the group plans to release Wednesday, the Patriotic Millionaires will call for international tax reform. Previously, the organization has focused its message on the United States, where it has lobbied in favor of a millionaire tax and against tax loopholes for investment funds.
The letter, titled “Millionaires Against Pitchforks,” warns that tax evasion has “reached epidemic proportions” and contributes to “extreme, destabilizing inequality.” It is timed to land as millionaires and billionaires gather here for the World Economic Forum — which the group’s president, Erica Payne, calls “one of the most obnoxious displays of privilege that is found on the world stage.”
“There are two kinds of wealthy people in the world: those who prefer taxes and those who prefer pitchforks. We, the undersigned, prefer taxes,” the letter says. It is signed by 121 people, including Disney heiress Abigail Disney, Celtel-founder Mo Ibrahim, former Unilever CEO Paul Polman and “Love, Actually” filmmaker Richard Curtis.
The letter cites a 2018 IMF report that found that $12 trillion of multinational investments is “completely artificial” and sitting in empty corporate shells across the globe. Meanwhile, the world’s roughly 2,000 billionaires have more wealth than 60% of the planet’s population, researchers at Oxfam said earlier this week. They warned that “extreme wealth is a sign of a failing economic system.”
The Patriotic Millionaires argue that taxes are the solution.
“Taxes are the best and only appropriate way to ensure adequate investment in the things our societies need. Individuals who reject this truth pose a dual threat both to the climate and to democracy itself,” says the letter.
The group is urging tax reform for individual and corporate taxes.
The Patriotic Millionaires was founded in 2010 and is chaired by former BlackRock executive Morris Pearl. Until now, its focus has been exclusively in the U.S., where it has run publicity campaigns and lobbied lawmakers to support its causes. The group stood by then-President Barack Obama’s side for his 2012 Tax Day address. Last month, the group unveiled its first spate of endorsements for 2020 congressional elections.
But the group believes the global tax landscape is so fraught it must expand is mission overseas, Payne said. A number of the group’s signatories, like Polman, are not members of the U.S. organization. Payne said it took months to find global millionaires and billionaires to support its cause.
“The number of wealthy people concerned with their fellow humans is minuscule. That is true domestically and it appears to also be true internationally,” Payne said.
Djaffar Shalchi, an Iranian-Danish businessman who helped the Patriotic Millionaires build their European network, said many requests for signatures were left simply left unanswered.
“The feedback was they didn’t want to sign it,” Shalchi said. “Most rich people are scared to sign something like that.”
But if the letter resonates as the group hopes, the Patriotic Millionaires will look for more global allies, and jump more heartily into the debate, Payne said.
As they do, they will be joining a corporate tax debate that has been reverberating across the international stage for years. Globalization has made it easier for companies to seek shelter in countries with lower corporate tax rates. That challenge is heightened by the rising tech giants like Facebook, Amazon and Apple that render taxing based on physical presence an antiquated notion. The global corporate tax has essentially halved in the past 35 years. It stood at 49% in 1985 and is 24% today, according to the IMF.
Former IMF Chairwoman Christine Lagarde has called existing global tax rules “fundamentally out of date.” Apple CEO Tim Cook said earlier this week the global tax system needs to be “rehauled.” The Organization for Economic Cooperation and Development is working to develop a framework tax solution for the wealthy countries that make up its membership, including Australia, the U.S., France and Ireland.
But efforts to create change have been stymied by diplomatic tensions. A frequently discussed potential solution is the imposition of a “digital tax” through which countries can tax an internet company doing business in its region. With most of the world’s largest technology companies based in the U.S, though, there are fears such a tax offers other nations a chance to prosper from the fruits of these American firms’ success.
As such, the U.S. has been sparring with France, Italy and Britain over threats of a digital tax. The debate has also clouded the negotiation of an OECD framework. U.S. Treasury Secretary Steven Mnuchin earlier this month informed OECD Secretary-General Angel Gurria that he has concerns about mandatory digital taxes being included as part of its global tax solution. President Donald Trump and French President Emmanuel Macron, meanwhile, called a truce in the matter, Reuters reported.
While Shalchi said he’s supportive of any efforts to close global tax loopholes, he said there may be an easier approach.
“We’re just complicating with 10 different kinds of taxes. They can tax the corporations, tax the stock markets — so on and so on — let’s just make it simple: Let’s just tax the wealthy,” he said. “But we are talking about the 1% here, come on.”
Read the letter:
To Our Fellow Millionaires and Billionaires Across the Globe,
There are two kinds of wealthy people in the world: those who prefer taxes and those who prefer pitchforks. We, the undersigned, prefer taxes. And we believe that, upon reflection, you will as well.
For that reason, we urge you to step forward now – before it’s too late – to demand higher and fairer taxes on
millionaires and billionaires within your own countries and to help prevent individual and corporate tax avoidance and evasion through international tax reform efforts.
We make this request as members of the most privileged class of human beings ever to walk the earth.
Extreme, destabilizing inequality is growing across the globe. Today, there are more billionaires on earth than ever before, and they control more wealth than they ever have. Meanwhile, the incomes of the poorest half of humanity remain virtually unchanged.
In many nations, tensions caused by inequality have reached crisis levels. Low social trust and a pervasive sense of unfairness are diminishing basic social cohesion. This breakdown within nations exacerbates tensions between countries. The resulting dynamics guarantee that the global community will fail to adequately respond to the looming climate catastrophe. This will be disastrous for everyone, including millionaires and billionaires.
It is time for us to act. Despite vocal protests to the contrary, most reasonable people understand that philanthropy has always been, and always will be, an inadequate substitute for government investment. Taxes are the best and only appropriate way to ensure adequate investment in the things our societies need. Individuals who reject this truth pose a dual threat both to the climate and to democracy itself, as those seeking to avoid their tax responsibilities are often the same ones manipulating governments and democratic processes around the world for their own gain.
Globally over the last several decades, tax receipts from the ultra-wealthy and corporations have declined
precipitously. In some nations, the wealthiest actually pay lower effective tax rates than those of modest means.
Many of the world’s largest corporations abuse tax havens, some pay no tax at all. Internationally, tax avoidance
and tax evasion have reached epidemic proportions. Studies show that, at the low end, at least $8 trillion – close to 10% of the world’s GDP – is hidden in tax havens. A recent IMF study, estimates that 40% of foreign direct investment – about $15 trillion – passes through “empty corporate shells” with “no real business activities.”
To be clear, every solution to this global crisis requires higher taxes on millionaires and billionaires like us. You
can join us in accepting this simple fact, and then help us get on with the business of repairing our fractured world – including working together to advance effective tax systems within our respective countries and internationally – or you can refuse to be part of the solution and accept that if we fail, you will be to blame.
Please join us in this most essential fight.
Sincerely,
Your Fellow Millionaires and Billionaires
Gary Reber Comments:
If the wealthy capital asset ownership class really want to reverse economic inequality they would work to and advocate advancing broad-based personal ownership of the capital asset wealth formed in the future simultaneously with the growth of the economy.
One such means to accomplish this goal would be to support and advocate for the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
In a world where we’ve just got to distribute the wealth more equitably, even perhaps to ensure the survival of humanity, here’s a one-minute video, “A Billionaire Redo,” I made on the subject: https://www.youtube.com/watch?v=SkLux2SWmK8