One of the more compelling arguments against a wealth tax is that the rich already donate plenty to charity, money that would otherwise go to the government; this was part of Mark Zuckerberg’s defense of his class when he went on Fox News last month.
But according to a table compiled and tweeted by UC Berkeley economist and wealth tax advocate Gabriel Zucman using data from Forbes magazine, the rich are barely giving any of their fortune away in any given year. Zucman pulled data from Forbes’ venerable billionaire rankings and a recent list it released compiling the 50 Americans who distributed the most money to charitable causes in 2018.
“We only counted money that reached beneficiaries — and excluded commitments that have yet to be paid out,” Forbes clarifies. “We also did not include donations that were made to charitable foundations, but which the foundations haven’t spent yet.” If a billionaire didn’t make the top 50 givers list, Zucman assumed their giving as $25 million, which is what the billionaire in 50th place on the list gave, as a higher-bound estimate.
US billionaires philanthropic giving:— Gabriel Zucman (@gabriel_zucman) November 24, 2019
- Gates, Buffett: annual giving ~3%–4% of their wealth
- Other top 20 billionaires: ~0.3% of their wealth. Like a tiny, tiny wealth tax
I made a table for you
You should interpret this table with several grains of salt. One is that it’s comparing a stock to a flow: giving in one year (2018) to net worth accumulated over a lifetime. Arguably a more apples-to-apples comparison would be comparing giving to annual income, though income per se becomes much less important when you measure your wealth in the billions (your “income” is basically the amount by which your stocks and bonds grew in value that year).
A second concern is that charitable giving is lumpy. Take Google co-founder Sergey Brin, for instance. While Forbes implies he donated less than $25 million in 2018, the Chronicle of Philanthropy has estimated that he donated $2.2 billion from 2000 to 2017 — quite a healthy amount. Including past years of giving and smoothing out the results would change things quite a bit.
Third, the Forbes measure purposefully ignores promises or donations to foundations, which may or may not be fair depending on how much benefit of the doubt you’re willing to give these folks. For instance, Antoine Levy, an economist at MIT, notes that the estimated giving by Phil Knight ignores $990 million in stock he donated in 2018. It’s also possible that because foundation distributions are much better documented than spending by LLCs like Laurene Powell Jobs’ Emerson Collective, billionaires with traditional foundations do better by this metric. (That said, Mark Zuckerberg and Priscilla Chan donate through an LLC and Forbes had no trouble tracking their giving, or that of fellow LLCers John and Laura Arnold.)
So the table has less than perfect information. But even given some errors in one direction or another, the conclusion is hard to dispute: Most billionaires are giving a pathetically small fraction of their wealth away.
Let’s try correcting with the Chronicle estimates, shall we? The Chronicle estimates that Jeff Bezos, America’s richest man, donated $67 million between 2000 and 2017. If you add the $131 million he gave in 2018, the total is still a whopping 0.12 percent of his net worth. That’s pathetic, and apart from Bill Gates and Warren Buffett, the rest of the list isn’t much better than Bezos.
All of which is to say: If America’s billionaires want to use their charitable giving as an argument against wealth taxes and other measures to diminish their fortunes, they’d probably do well to actually start real charitable giving.
Correction: An earlier version of a summary of this story misstated the amount Jeff Bezos gave to charity in 2018.
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