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Wealth Tax

Philanthropy is Good – Wealth taxes are better

Philanthropy is Good – Wealth taxes are better

“Why don’t you just give your money to philanthropy?”, is a question members of Millionaires for Humanity often get when advocating for a wealth tax. Whilst all our members find themselves with philanthropic work in one way or the other, philanthropy alone cannot solve our world’s most pressing issues. In fact philanthropy is often underpinned by integral injustices and finds itself  flawed in multiple aspects, notably when it comes to social representation and responsibility. Philanthropic action finds itself centred around the primary focus of its funders, these funders themselves typically lack diversity and unsurprisingly this in itself leads to a lack of diversity in the areas receiving said funding. Despite attempts to bring about real change, the lack of funding in key areas actively leads to the reinforcement of the status quo. 

This is not the only issue we can associate with philanthropic actions. We must look at the actual quantity of funding, philanthropic giving offers an easy out for many who are able to make token gestures by simply donating negligible quantities despite immense wealth, such as members of the billionaire class who can get away with donating a lower percentage of their actual wealth then many everyday people. Take this article from Business Insider which shows that a large proportion of billionaires give less than 1% of their wealth away on a yearly basis. This is an embarrassingly low figure, those that have the most should at least be paying their fair and appropriate share. 

Philanthropy as such is not bad and anything that is given to help others is a net positive, but philanthropy should not be seen as a substitute for fair and progressive tax systems which will always be a much more effective way of dealing with grotesque inequality. Great societal pressure can push us away from the path of dependency on philanthropy and lead to greater global equity. We’d like to use the recently released “Sunday Times Giving List” to highlight some of these issues, drawing from the list specific examples to argue our points. 

The Times Giving List – less than 1%… 

The Times Giving List which began in 2015 and has subsequently been updated with passing each year,  is designed to show “the good that comes with wealth creation” and “the acts of generosity, compassion and determination to affect change”. Yet it acts to shine a great spotlight on some persistent issues of philanthropy. Notability: the nature of token gestures and minimal donations. Take a glance over the list and you see a list of incredibly wealthy individuals donating significant sums of money to charity. Take a much closer look and you see that no one on the list ranking under 30th place gives more than 1% of their wealth away, a damning indictment of philanthropy. Take Sir James Dyson, 81st position on this list and the wealthiest to feature, the man who has the most to possibly give. Yet as a percentage of his wealth he  actually gives very little compared to his peers, Dyson gave as little as 0.11% of his £23 Billion fortune to charitable organisations over the year. Dyson is not the kind and generous man that some would lead you to believe, he is notorious for acting in his own best interests and his donations to charity can be seen in a similar light. Insignificant token gestures to improve his own positive image with no real action or challenges required for himself. 

Philanthropy os often disconnected from the reality of society

A secondary more veiled problem is highlighted by the list. Philanthropy often goes to a relatively narrow slice of the charitable sector: colleges and universities, hospitals, foundations, and donor-advised funds. That’s not a big surprise, given that previous research has shown that education and medical research are usually among wealthy philanthropists’ favourite causes. Not only do the wealthiest individuals in society decide where the wealth is given and applied but considering the racial makeup of the typical philanthropist (shockingly 73% of philanthropic donations today in the United States are made by caucasians americans). Then the causes that receive funding are the causes that resonate most with the typical white male donor, thus there is a racial bias and divide in the location of philanthropic funding leading it to be fundamentally disconnected to the needs of the people it seeks to serve. Just a quick skim through the Times Giving list and you can see these aspects in action, with a majority of the people on the list being older white men donating to causes that are not necessarily the priority of society.  A sad fact as the world still struggles to repair itself in the wake of a pandemic and calls for racial justice are seemingly ignored, that philanthropy is sadly not putting the money in the places it needs to be. 

How can we fix this? 

We believe that the issues raised above can be solved through the introduction of a wealth tax. Firstly, a wealth tax would remove the bias associated with philanthropic giving and allow for democratic processes to decide where funding should be implemented and received, governments would allocate funds relating to the will of the electorate. Giving the voice of social justice and power back to the people who helped create the wealth. Appropriately levied wealth taxes can also eliminate what we consider to be token gestures and the underfunding in relation to percentage of total wealth given. For example, applying a 1% wealth tax on all people who hold wealth over a certain threshold would eliminate this problem. It would also mean that wealthy individuals who get away with just hoarding their wealth and offering nothing to philanthropic causes can no longer hide and hoard. Philanthropy’s existence should be seen as a supplemental addition to successful wealth taxation, a place for passion projects to receive additional funding whilst ensuring that societal issues are not neglected due to the nature of philanthropic giving. 

Millionaires For Humanity is an organisation composed of HNWI’s who actively advocate for the implementation of wealth taxes as a means to meet the needs of society. This article is written by Millionaires for Humanity and should not be read to represent the entirety of our members. 

Our partners & collaborators

The Momentum Institute challenges the social and economic status quo by contextualising and disseminating scientific work. Developing proposals for a more sustainable and inclusive society since 2019.

Taxmenow focuses on initiating changes in the tax system. To do this, members use their privileged access to the media to highlight the damaging effects of wealth inequality.

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Millionaires for Humanity is a collective network of HNWI’s, using their voices to promote wealth taxes across the globe. Advocating for a 1% wealth tax on multimillionaires to achieve the SDG’s.

Patriotic Millionaires seek to combat the destabilizing level of economic and political inequality in America. Patriotic Millionaires members include investors and business owners from across the country.

Religions for Peace has been a movement changing the world and challenging the status quo through the mutual conviction that religions are more powerful, inspiring, and impactful together.

ActionAid Denmark is a movement that fights for a more just and sustainable world. Supporting youths in developing their voice and applying pressure on those in power.

Oxfam is a global movement of people who are fighting inequality to end poverty and injustice. Working across regions in about 70 countries, with thousands of partners, supporting communities to build better lives.

UNICEF works in over 190 countries and territories to save children’s lives, to defend their rights, and to help them fulfil their potential, from early childhood through adolescence.