Cat MacLennan: Millionaires and billionaires should act today

Cat MacLennan: Millionaires and billionaires should act today

Millionaires and billionaires can step up today and start making proper contributions to improving the world. They do not need to wait for governments to act.

A group of 83 wealthy people calling themselves “Millionaires for Humanity” earlier this week released an open letter calling on governments to raise taxes on people like them “Immediately. Substantially. Permanently.”

The rich signatories are from seven countries and include New Zealanders The Warehouse Group founder Sir Stephen Tindall and Hire Things founder Peter Torr Smith. The letter says that millionaires have a critical role to play in healing as Covid-19 continues to grip the world.

The wealthy signatories predict that the impact of the pandemic will last for decades and could push half a billion more people into poverty. Hundreds of millions of people will lose their jobs and children will be deprived of schooling, while inadequate investment will mean public health systems across the world will struggle to cope.

But it is the three paragraphs in the middle of the eight-paragraph letter that are the core of the signatories’ message. The super-wealthy acknowledge that the problems both caused and revealed by Covid-19 cannot be solved with charity. Rather, they state, government leaders must take responsibility for raising the funds required and spending them fairly.

“We can ensure we adequately fund our health systems, schools and security through a permanent tax increase on the wealthiest people on the planet, people like us.”

The letter says that the world’s interconnectedness has never been clearer and the globe must be rebalanced before it is too late. Urging speedy action, the letter warns that there will not be another chance to get this right.

The millionaires are correct.

At present, the world’s richest people have more than twice as much wealth as 6.9 billion people. Almost half of humans live on less than US$5.50 a day. Oxfam points out that only four cents in every dollar of tax revenue comes from taxes on wealth, while the super-rich avoid as much as 30 per cent of their tax liability.

Healthcare costs force 100 million people into extreme poverty every year, while the unpaid care work done by women is estimated to total US$10.8 trillion per annum – three times the size of the tech industry.

Good on the millionaires for finally speaking out and acknowledging what is plain to all.

But there is no need for the super-rich to wait for governments to act. Here are six steps they can all take today.

First, the signatories can immediately deposit money to their respective government’s bank accounts as a tangible sign that they are really serious about starting to pay their fair shares. That money could then start flowing out straight away to job protection, rebuilding underfunded health systems and other desperate needs.

It will take time for governments to pass laws to increase taxes on the rich, but that does not mean that the wealthy cannot contribute money right now.

Secondly, extreme wealth is typically accumulated by over-charging for goods and services. Tech companies are a clear example of that. Many use their economic might to squash competition, meaning that they can keep prices for their goods as high as possible.

In turn, those high prices lock the poorest and most disadvantaged out of access to technology, driving them further into poverty.

The wealthy should today drop prices for their goods and services so that access to them can be greatly broadened. That would immediately start reducing poverty because access to technology would enable the most economically-disadvantaged to begin participating in the global community.

Thirdly, the businesses run by many millionaires and billionaires pay the workers who actually create their wealth the minimum wage. That is not enough for their staff to actually live on.

The ultra-wealthy should accordingly start paying their staff liveable wages. Liveable wages, in fact, create wealth because those on lower incomes spend all of their pay straight away, meaning that money circulates in the community to keep businesses operating and create more jobs.

Fourthly, the super-rich need to stop setting up and financially underwriting foundations and lobby groups which campaign against climate change and act to disseminate false information on health issues such as tobacco and alcohol.

Those organisations are primarily backed by the super-wealthy, who have a vested interest in maintaining the status quo so they continue to financially benefit from activities which are destroying the planet and causing millions of deaths.

Fifthly, and in a similar vein, the ultra-wealthy need to pull their funding for those who work to corrode confidence in democracy and undermine the importance of the state. Rather than funding civics and voter education programmes, the economic elite typically chooses to back shadowy organisations which cynically seek to destroy faith in government and participation in politics.

The end result of that is dwindling participation in elections and reduced faith in politicians and the ability of states to support their citizens.

Finally, the super-wealthy should shut down their elaborate tax minimisation, tax avoidance and tax evasion schemes. If they actually paid the amount of tax already required by law, that would in itself provide much-needed income to governments.

Covid-19 has disrupted the world as we know it. The fact that the super-wealthy acknowledge that huge change is required gives cause for optimism that transformation can actually begin to occur.

Cat MacLennan is a journalist, barrister and researcher

This article can be republished under a Creative Commons CC BY-ND 4.0  license. Attributions should include a link to the Democracy Project.