Patriotic Millionaires urge the rich to pay 'higher and fairer taxes'

Transcript

A group of wealthy people, business leaders and investors is calling for "higher and fairer taxes on millionaires and billionaires" as leaders and powerful people from around the globe gathered today at the World Economic Forum in Davos, Switzerland.

In a letter titled Millionaires Against Pitchforks, the group Patriotic Millionaires said that tax avoidance and tax evasion have reached "epidemic proportions" and contributes to "extreme, destabilizing inequality."

The letter cites an IMF study that estimates about $15 trillion or 40 per cent of foreign direct investments "passes through 'empty corporate shells' with 'no real business activities.'"

"Every solution to this global crisis requires higher taxes on millionaires and billionaires like us," the group said in the letter. "Individuals who reject this truth pose a dual threat both to the climate and to democracy itself."

At least 121 people signed the letter, including Disney heiress Abigail Disney, Mission: Impossible actor Simon Pegg and Morris Pearl, chairman of Patriotic Millionaires and ex-managing director at BlackRock Inc., one of the world's largest investment firms.

Pearl spoke with As it Happens host Carol Off. Here is part of their conversation.

What's the argument you're giving as to why they should look into this idea of paying more taxes?

Well, I'm telling people that the world is changing — that people are not putting up with this anymore. That's what we saw in 2016 of the election here in the United States — that people were rejecting the status quo. I think that's what we saw in the United Kingdom when people voted to exit the European Union.

In both cases, it's sort of they want to believe there's some enemy that's causing their problems and deal with it. They don't want to co-operate and be part of this globalized economy because it's not working for them.

We don't want the very richest people deciding how society's wealth should be spent ... We need all the people through the elected representatives they vote for making those decisions, not just the few wealthiest deciding to spend a tiny, tiny, tiny fraction of one per cent of their money.- Morris Pearl, chairman of Patriotic Millionaires

It's not working for at least half the people in the world, in the country. And so I think we — the wealthy people, the investors, the business people — have to realize that if we don't change, it's not going to be working for us anymore, either.

You saw the gross inequality in South Africa that did not end well for the rich people, either, in the 1980s, and I'm afraid that as we said [in] the letter that people are going to start marching with pitchforks, and we're going to have social unrest and things are going to be bad. So we have to have a change.

So, the argument is enlightened self-interest.

Yes, I don't claim to be purely altruistic. I don't think anyone is. Maybe some people are. But I think it's in the enlightened self-interest of the wealthy people to change — to do something.

I think Warren Buffett started talking about this some years ago when he discovered his secretary was paying more taxes than he was — that this had to change. And yet it continues that the rich people continue to try and find ways of avoiding paying taxes. So why is that?

Well, I think some people are just greedy. Not everyone. You know, Warren Buffett pointed that out, but even he was talking about the income tax rate he paid on a fee on $10 million or so dollars of taxable income he makes every year disregarding the billions of dollars he makes every year and the appreciation of his ownership of his company, Berkshire Hathaway.

I think we have to realize that wealthy people are just so much more wealthy than everyone else that it's becoming clear to everyone else that they don't have a chance that their wealth is concentrated [in] so few hands that it's hardly worth asking people to co-operate anymore.

If you're telling them that the alternative to acting on this and having a more fair distribution or redistribution of wealth, if you don't do that, you're going to be facing pitchforks. Isn't that just more of a reason for them to be wealthy, so they can protect themselves from that?

Well, sure, I mean a few people can protect themselves in some way.

A small number of people can do things like buying a small private island off the coast of New Zealand and building their own airport and hiding out there. But most people don't want to be there. They want to be here in New York and San Francisco and in London and Toronto — places where people go to enjoy their lives.

And we're talking not just to 100 people. We're talking to hundreds of thousands of people, say the top one one hundredth of one per cent of the people in the world. And I think that not a lot of people can really protect themselves. And so...I think it's much better and, most people agree, that we want to avoid revolution, not sort of plan to deal with revolution.

You're the chair of Patriotic Millionaires and you're an American. So ... why are you looking to make this a global movement and not just focus on your own country?

It's really an international problem because so much wealth can be easily moved from nation to nation. The very wealthiest can easily move from nation to nation. 

So we've got interest from people in other countries from Denmark from Canada, and we're helping them start their own movements for Patriotic Millionaires in their countries.

When they're told that 'OK, this is how much you're going to pay in taxes.' Do you think that they'll balk at that?

Well, I think they want to change their countries, too. I think people in other countries see the same problems that we're seeing. And they also are seeing it in their own … self-interest to do something about it.

And, of course, people say they are doing something. They're giving money to philanthropy. They're donating to charities. They're building wings on hospitals. Isn't that the way to do it?

Well, yes, but that's a tiny fraction. We don't want the very richest people deciding how society's wealth should be spent — whether it's a hospital here or more likely an art museum there.… We need all the people through the elected representatives they vote for making those decisions, not just the few wealthiest deciding to spend a tiny, tiny, tiny fraction of one per cent of their money on things that look like philanthropy.

What kind of response do you think you'll get politically in the United States to your ideas?

We're seeing a huge response politically to our ideas.

More people voted against Mr. Trump than voted for Mr. Trump in the last election. And the ideas that we're proposing are mainstream now when they're considered completely off the wall five years ago. So yeah, we're seeing a very favourable political response, right now.

Interview produced by Samantha Lui. Q & A condensed and edited for clarity.