Some of America’s wealthiest families are apparently uneasy about the riches they possess in a country where social inequality is increasingly a hot topic.
In June, seventeen super-rich individuals–billionaire investor George Soros, Facebook co-founder Chris Young, and Disney heiress, Abigail Disney among them–published an open letter in which they said they would be willing to pay higher taxes to combat social inequality.
“It’s time for us who are blessed with unusual financial success or luck to contribute more to our common good and common future,” Liesel Pritzker Simmons, one of the authors of the letter, told BBC News. “The best way that we in this fortunate bubble can contribute is that we want to be taxed more.”
The signatories are not wedded to a particular proposal, but one suggestion was this: Add a tax of two cents per dollar on assets after a $50m exemption, and one cent per dollar tax on assets above $1bn. They claimed it would generate nearly $3tn in revenue over ten years.
The proposal has naturally divided public opinion and drawn criticism on both sides of the political spectrum with even some supporters of higher taxes in America labeling the group privileged do-gooders, and others arguing that a wealth tax is not the solution at all.
Uncomfortable debate
“This is an uncomfortable conversation. We recognise that,” Ms Pritzker Simmons, whose family built their fortune on the Hyatt hotel group, told the BBC. The 35-year-old heiress is also a former child actor, having appeared in the Academy Award-nominated A Little Princess and alongside Harrison Ford in Air Force One.
Pritzker Simmons describes herself as “quite a private person”, running an investment firm with her husband that focuses on social and environmental enterprises.
“We just wanted to go on the record and say: please don’t be timid about tax reform because you’re afraid that this class of people is going to get upset,” Pritzker Simmons told the BBC. “There’s a healthy group of us who absolutely are in favour of it [a wealth tax], and we wanted to make that really clear to politicians and future politicians, as well as the American people.”
While the group did not back a particular candidate, it praised a proposal by Democratic presidential hopeful Senator Elizabeth Warren that would raise taxes on those with more than $50m, a measure that would affect the 75,000 wealthiest families. She estimated that it would raise $2.75tn over 10 years.
Not all are in agreement, however, including on the Democratic side of the debate.
Days after the letter was published, The Washington Post Editorial Board wrote in an op-ed: “We are not convinced that a wealth tax is the optimal means of raising taxes on those who can afford to pay more.”
The writers pointed out that in addition to a likely constitutional challenge, the measure would encounter implementation problems — notably, the consistent valuation of assets ranging from land to rare art — not unlike those that have caused most European nations that tried a wealth tax to abandon it.
“What’s more, a wealth tax of the kind Ms. Warren proposes would not distinguish between wealth accumulated through enterprise and innovation, which is socially productive, and wealth gained through inheritance or rent-seeking, which is not,” the op-ed stated.
