During the height of the COVID-19 pandemic, billionaires set a new record for the percentage of their wealth given to charity. Unfortunately, that record was for an all-time low. This came at the same time when billionaires were reaching new levels of worth that many thought would take decades to reach. While they were adding to their wealth, more than 150 donated less than one percent of that to charity.
After an outcry from the public about billionaires hoarding wealth, the pendulum swung the other way the following year. The world’s richest donated $27 billion in a one-year span, with the 25 richest people donating nearly $200 billion in their collective lifetimes. People are pushing back at billionaires to give more to charity, especially as their net worths are skyrocketing while most other people are remaining stagnant or seeing their purchasing power decline.
There is one major problem with billionaires donating to charity, however. Many feel that these mega-rich people who are also CEOs of major corporations should be focusing on paying their fair share in taxes and supporting their employees with livable wages. People argue that these charitable donations are nothing more than a way to make the billionaire look better in the public eye.
This is why you’ve seen politicians like Bernie Sanders, a former Presidential candidate, push for billionaires to be taxed more. Those on the other side of the aisle argue that the government would be overstepping and simply misallocate those funds. They also say that since the billionaires made the money, they should be able to do what they want with it.
However, a report from the White House has shown that billionaires are certainly getting off much easier than the average American when it comes to paying taxes. The 400 wealthiest families in the United States were found to pay an average of only 8.2 percent of their income. In a press brief, the White House added that “For decades, our economy has worked great for those at the very top, while hardworking Americans who built this country have been cut out of the deal and left behind.”
So why is it that billionaires have to be dragged kicking and screaming just to pay a marginally higher percentage in taxes while they’re willing to shell out hundreds of millions toward charity? Is there some sort of kickback that these billionaires are getting from foundations compared to helping those in need within their own country?
It turns out that many of these donations are nothing more than surface-level publicity stunts. That’s because, with these massive donations, many of them are tax-subsidized. Studies have shown that for each $1 (yes, just one dollar) that billionaires give to charity, the American public has to chip in around $0.75 in lost tax revenue. Eventually, the money flows back to the company, so each donation only ends up being a small hit if not a gain in wealth.
Some have compared billionaire philanthropy to legal money laundering with a positive PR slant. Others have said that billionaires are simply donating a part of their morning’s pay. Philosopher Slavoj Zizek has said that billionaires will spend a few hours making millions off the backs of hardworking people, then use that money to donate for good PR. They don’t need the $10 million that they made that morning since they’re already worth billions, but a donation that size always looks good in a headline.
A lot of billionaires are also setting up their own charitable organizations, which should be a massive red flag. Investigative reporter Jesse Eisinger said that billionaires like Mark Zuckerberg (Facebook/Meta) were simply moving money “from one pocket to the other,” and that they were “likely never to pay any taxes on it.” In the end, there are loopholes that allow for this to happen, so money laundering and tax evasion can be, well, evaded.
Of course, billionaires are more inclined to donate to politicians who are willing to give them these tax breaks and keep these loopholes in place. This means that it’s essentially the ultra-wealthy who are running the show rather than the politicians who were voted in. When they are donating to causes that you like, you can see these billionaires as amazing philanthropists, but when they donate to the other side, you can see them as pure evil.
It’s a real Catch-22 when it comes to billionaires donating. Obviously, some of them are doing some amazing work around the world and providing underserved regions with resources they’ve never had, while others are taking advantage of the system and padding their own net worth through good publicity.