The Patriotic Millionaires are a US based organisation that argues that the wealthy have a duty to pay more taxes. Like many others, they issued a David missive. In their case it was a letter to their fellow wealthy citizens of the world.
You could argue that the Patriotic Millionaires have missed the point by not asking whether it's right that they are millionaires.
And you could argue that measures to address reward misdistribution may be more appropriate than taxing wealth.
But given that these are not on many agendas right now this argument is still worth considering:
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
It always helps that some who will be taxed more agree with the fact that this should happen. This lot are saying that. I'll take it at face value for now.
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Is this the letter Simon Pegg signed that was in the news today? Is there a list of individual signatories anywhere? “Your fellow millionaires and billionaires” doesn’t really do it for me!
I do not have it
Tim – You can find a list of signatories here
https://www.millionairesagainstpitchforks.com/pages/signatories
Thanks to you and Graham. Yes, Simon Pegg is on it.
Meanwhile, the power of the largest global corporations is such that the capacity of mere national states to tax them, even within the legitimate ambit of own sphere of national sovereignty, is now under existential threat. These corporations can now martial the overwhelming power of the US state, virtually at will (perhaps even without even willing it); specifically to serve and protect their direct taxation interests in foreign states; including the notable capacity to profit in foreign states without paying conventional, standard taxes (not special customs tariffs) in the places they operate. Realpolitik has been corporatised. I am sure the well informed may point to recondite examples of this happening before; nevertheless, I think this is a watershed. Global corporatism is a chameleon; it changes its face with facility, is everywhere and nowhere at the same time, and claims to serve while it takes unilateral control.
“Sovereignty” in a state, whatever the rhetorical flourishes of its constitution, ‘de facto’ depends first on its capacity to issue its currency and exercise its power to tax.
Only the EU and PRC (China) have sufficient power to negotiate with serious intent with the US on a reasonably level field (not just on tariffs or regulations, but conventional taxation). Of course the UK is about to leave the EU …..
https://www.millionairesagainstpitchforks.com/
If it is genuine, you can be pretty sure Nick Hanauer is a guiding light, given the “pitchforks ” reference.
See:
https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014
I suppose we shouldn’t be too curmudgeonly or ungracious when a handful of the cosseted thousands seek to apply to rejoin the rest of human race.
The irony, of course, is that, for all their wealth, they think that any extra tax they’ll pay will actually pay for more real goods and services.
Even one of the high priests of German ordoliberalism, Hans-Werner Sinn, understands that spending is generated by money created for that purpose and that taxes withdraw money and effectively destroys it:
https://www.theguardian.com/business/2020/jan/23/who-pays-for-the-eus-1tn-green-deal
I accept that he’s moaning about the possibility that the ECB might create money to buy green bonds, but this is the key passage:
“If the additional demand created by an expansion of green projects is funded by printing money instead of collecting taxes, it will not withdraw demand from other sectors of the European economy and would therefore be potentially inflationary.”
The opposition to sensible fiscal policies is melting away….
Stephanie Kelton agrees we need to tax the rich more
It’s not because we need their money
It’s because they don’t need it
I expect you, of all people, are well aware that it far more profound than this. Governments that have the power to create money also have the power and responsibility both to control and influence how much money is created additionally by banks and to direct and influence on whom and on what the total supply of money is spent. The mix of direct government spending and taxation combined with the application of the other policy tools and instruments available to governments and the application of those available to central banks determine the extent to which economies will achieve their productive capacity in a manner that avoids inflation and destablilising sectoral imbalances (both individually and in aggregate).
When governments fail to extract (and effectively destroy) via taxation the necessary amount of money the inevitable results are shortfalls in productive capacity, asset bubbles, increased inequality and rent capture and destabilising sectoral imbalances. And it is, of course, a convenient fiction, favouring the powerful and wealthy, that if governments need to extract money in excess of that extracted by taxation they have to pay for the privilege by issuing bonds.
I’m not sure that these “patriotic millionaires” fully grasp this reality. If they did, I doubt they would be so enthusiastic about paying tax. I also suspect that the thousands of others in this income and wealth bracket are well aware of the reality and will continue to deny it and suppress its communication to the general public.
I fully get all this
But I also think there is value in narratives
This narrative, that not all resent tax, helps right now
How much tax are they thinking of and how to prevent avoidance/evasion? Even at 99% Bezos would still have more than he needs. Prevention is better.
(Max is because someone else is using Graham which I normally use)
I have no particular issue with this proposal, howeverI think the devil is in the detail. A couple of points:
– what is the definition of a ‘millionaire’? i.e. is it annual income, debt free assets, does it include assets etc. I can’t see a definition in the letter. Presumably individual governments will decide?
– the issue of more tax on millionaires ‘because they don’t need their money’ – who decides what any individual needs. I think there is danger in this approach in that if I have £x over some limit then the state will by some means remove this money from me.
Appreciate your views.
I don’t see it as a proposal per se
I see it as an idea
The detail is elsewhere
And the idea of 100% tax over a limit is not there