Question: “Should the government raise taxes by 10% on the richest 1% of society in order to give this money to charities to help the least fortunate?”

When we think about how to solve today’s issues of poverty, the first solution we think about is the redistribution of money from the richest to the poorest. This proposal of having the government raise taxes by 10% on the richest 1% to give money to charities for the poor is admirable at best, but it doesn’t take the main issue here: the fact that the rich have too much, which is immoral. I believe that by continuing to be extremely wealthy is deeply immoral, and hence, the rich needs to give back more directly to the poor.

We look at the definition of “absolute affluence” proposed by Robert McNamara, former president of the World Bank. This refers to people who have more than enough money to accommodate any human’s needs. We look at people like Jeff Bezos who owns several multi-million door houses and condos to live in. Does he really need all these houses? How many houses does one person reasonably need? The answer is one. Millionaires and billionaires do not need several houses, and by owning more than one house is taking away houses that can be given to the poor to live in, making it immoral. As Current Affairs’ A.Q. Smith says, “Because every dollar you have is a dollar you’re not giving to somebody else, the decision to retain wealth is a decision to deprive others.”[1]

Arguably, it’s immoral for millionaires to not help the poor. This falls under the argument for an obligation to assist. For example, I’m in possession of a medication that can literally save someone’s life in that moment. Would I take it out and administer to them? Of course, I would! It’s the same with the rich: if I had excess amount of money, how would I contribute to the poor?

Starting up a charity sounds like a good idea initially, but studies show that it ultimately benefits the rich, giving hundreds and thousands in tax write-offs[2]. Surely, hundreds of millions of dollars to certain causes is a lot, but this accounts a very, very small percentage of their overall wealth[3]. If a billionaire were to give their actual half of their fortune away, the world would be completely different and probably for the better. The fact that it doesn’t happen means that billionaires would rather be benefitted from the poor staying poor than to fix problems, which is immoral.

Using Jeff Bezos again, he donated $2 billion to Montessori schools[4]. This is cool, except that he’s reaching $200 billion in wealth. Donating roughly 1% of your net wealth to build a rather specific school is nothing. He still has $180 billion left to spend. He can solve homelessness in America for $20 billion[5], and still have $162 billion left. The fact that he has yet to solve homelessness or other issues “within his budget” shows that being rich is essentially immoral. What does Bezos need all of that money for other than to do some illegal activities?

Even as rich people do give money away directly to others or organizations, they still want their names to be on them. For example, when the rich give money to a university for better funding, a lot of times, they want a building named after them or let it be publicly known that they donated money to education. We see this on our campuses as hundreds of millions are donated to CSUF with buildings named after rich people like Steven G. Mihaylo (who ironically only donated $8 million of the $30 million he pledged to donate, making the school remove his name from the college[6]).

This is also done to escape the real harm that billionaires are doing with their companies. Still using Jeff Bezos as our example, he may donate $2 billion towards education, but he faces a long and extensive history of his company, Amazon, of mistreatment of his employees, from union busting, wage theft, and so forth. In 2020, Bezos was amongst the billionaires who benefited the most during the COVID-19 pandemic. Rather than addressing this, he would rather shift doing charitable work to either ease his conscience or do good publicity for himself. This makes the charitable acts deeply immoral, as it’s simply a mask to hide the truth behind Amazon, Bezos’ source of wealth.

It’s not to say that all charitable acts are deeply immoral. Some people do it in the kindest of hearts to help the less fortunate. But when it comes to the ultra-rich and powerful, it is, as it only benefits them, whether it’s through tax write offs or to mend their bad reputation. The only way we can have the rich donate genuinely is for them to donate more than 10%, probably 30 to 40%. Tax loopholes when it comes to charitable donations need to be closed off, and that requires legislation (that is, if the 1% and corrupt politicians do not protest to these changes). Charities also need to start being more honest about where people’s donations go towards and be transparent who’s benefitting from their operations. This honesty would not only confirm what we all think about but is the beginning to change the structure of charitable donations being beneficial for the rich, but only for the poor.

Perhaps the best choice is to do direct payments from the rich to the poor, which requires a huge overhaul of what we perceive as charity. For example, during this pandemic, we saw that the three stimulus checks from the government did lift a huge amount of folks from poverty (around 8.3 million[7]), and that was the bare minimum. Looking at the business standpoint, it’s cheaper to give money than to deliver goods, as one must pay for the goods itself, the packaging, labor to create, deliver and administer such goods[8]. Ethically, it would be a lot better as it directly benefits the poor compared to giving money through charities. Until it happens, the 1% giving a small percentage to charities remains immoral.

Sources:

[1] https://www.currentaffairs.org/2017/06/its-basically-just-immoral-to-be-rich

[2] https://www.vox.com/future-perfect/2019/9/3/20840955/charitable-deduction-tax-rich-billionaire-philanthropy

[3] https://blog.datawrapper.de/weekly-rich-people-tax-charities-donations/

[4] https://www.livingmontessori.com/jeff-bezos-philanthropic-support-for-new-montessori-schools/

[5] https://www.globalgiving.org/learn/how-much-would-it-cost-to-end-homelessness-in-america/#:~:text=According%20to%20the%20Department%20of,homelessness%20in%20the%20United%20States.

[6][6] https://dailytitan.com/news/campus/csuf-severs-ties-with-steven-mihaylo-removes-name-from-business-college/article_77dcdc34-e7cb-11ea-a8c2-df7d1b49cec9.html

[7] https://www.urban.org/sites/default/files/publication/102711/using-cash-payments-to-reduce-poverty.pdf

[8] https://www.theatlantic.com/international/archive/2015/09/welfare-reform-direct-cash-poor/407236/

This blog post was made for a final project at Cal State Fullerton for the Spring 2021 semester.