The philanthropy most billionaires do, and the taxes they pay, are a pittance compared to how much of their wealth they should be giving away, according to author Chuck Collins.
Why he gave away his inheritance
Born into the multi-million dollar meat and cold-cut corporation Oscar Mayer, Chuck Collins grew up wanting for nothing. But when he was 26, he came across a trailer park where tenants were about to lose the land their homes were on.
All the tenants needed was $35,000 to buy the property — chump change for Collins. But before he had the opportunity to offer them any money, they banded together to buy the land as a collective.
“It made me think, ‘I want some of what they have,’” Collins said during a 2017 lecture, according to The Heights. “‘What they have is a community that stands up for each other and that’s all in for each other. That’s the kind of world I want to live in.’”
So, Collins gave away his inheritance to support local New England causes.
Now, he’s the director of the Program on Inequality and the Common Good at the Institute for Policy Studies and targets America’s rich who avoid paying their fair share of taxes.
How billionaires are hiding their money
In his upcoming book, “The Wealth Hoarders,” Collins explains how billionaires hide their money by buying property, holding wealth in “artport” shipping containers, and through tax havens including ones in US states like South Dakota, Wyoming or Delaware.
“The thing I think we don’t understand is we are now the tax haven,” Collins told Business Insider in an interview about the book.
He said that while billionaires claim to be philanthropic, they’re not really giving away enough.
“I would say the overwhelming cultural message for someone growing up in my class was ‘protect and preserve.’ You can do quirky things with your income, but don’t touch the corpus. Don’t touch the asset, let it just keep growing,” Collins added.
The US government has helped the rich
Meanwhile, the share of wealth controlled by billionaires grew, with the 50 richest Americans now controlling as much money as the country’s 165 million poorest.
Collins says that with Joe Biden’s election victory and the Democrats’ outspokenness about taxing the wealthy the rich are quickly trying to move their money into “new forms” so they don’t have to pay their fair share.
“I feel like we’re kind of in a moment where this industry has been growing and growing and accelerating really in the last 15 years — the number of family offices, the number of planners, the number of dynasty trusts,” Collins told Business Insider. “And it’s reaching this pinnacle moment, because, for the first time in a long time, there’s a meaningful discussion about taxing the very wealthy.”
Collins added that some of America’s rich may went to pay more in taxes, but when they talk to their financial advisors they’re rebuffed because there’s a culture where people are encouraged to find loopholes to pay fewer taxes.
“There’s probably people out there that fundamentally think that they should pay more taxes, but their advisors — just, it’s unthinkable, right?” Collins said.
A ‘reform train’ is coming
Collins said billionaires will do their best to dodge the new rules, but he thinks they could eventually be reigned in within the next decade.
“This is totally fixable,” he told Business Insider. “Start with enforcement, outlaw the bad trusts, increase transparency in reporting and disclosure, and then join with our global partners to clean up the global system. We could reverse it in 10 years.”
Using individual privilege to make a difference
It is absolutely appalling that there are people in America who can’t afford to feed their children breakfast before school while a company like FedEx — which has obviously profited during the pandemic — pays $0 in federal taxes. It is long past due that billionaires and rich corporations pay their fair share of taxes — and giving away a little bit with philanthropy isn’t always enough.
Hopefully, the government will start doing a better job at collecting and distributing tax money, but it’s already a positive development that it’s becoming more common for America’s rich — or formerly rich like Collins — to speak out and use their privilege to help make a difference.