As Democratic presidential candidate Elizabeth Warren seeks to impose a steep tax on extremely wealthy Americans, billionaires have laid out a compelling argument against such a proposal: They already give a significant chunk of their personal fortune to charity.
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Facebook CEO Mark Zuckerberg made a similar case last month during an interview on Fox News, suggesting that turning billionaires’ wealth over to the government could result in worse outcomes than giving it to charity.
“I think it’s good that there are different philanthropies and different organizations that can put competing ideas out about how to do research or science,” the 35-year-old billionaire said in October. “I fundamentally believe in that competition that you want different ideas out there.”
But according to a table compiled and shared on Twitter by University of California Berkeley economist Gabriel Zucman, who helped to craft Warren’s wealth tax plan, the richest Americans actually donate very little of their fortune each year. Zucman pulled data from Forbes’ ranking of billionaires, and its recently released list of the 50 Americans who donated the most money to charitable causes in 2018.
Even though the top philanthropists in the country are among the richest Americans, the amount they give annually accounts for a tiny percentage of their overall fortune, according to Zucman.
For instance, Amazon CEO Jeff Bezos, who was worth a staggering $160 billion in 2018 (prior to his divorce), gave about $131 million to charity last year — a mere 0.1 percent of his total fortune. Under Warren’s proposal of a 6 percent tax on those worth more than $1 billion, Bezos would have been on the hook for about $9.5 billion in 2018, according to a wealth tax calculator released by her campaign.
Of course, there are other billionaires who donate more: Berkshire Hathaway Chairman Warren Buffett, worth $88 billion in 2018, gave $3.4 billion to charity, or roughly 3.9 percent of his fortune. Microsoft founder Bill Gates, worth $97 billion, gave away $2.5 billion, or 2.6 percent of his fortune, according to the data. Zuckerberg, worth $61 billion, donated $410 million, or 0.7 percent.
Former New York City Mayor Michael Bloomberg, the 10th richest American, had $51.8 billion and gave about 1.5 percent of his fortune -- or $767 million -- to charity in 2018. Bloomberg, who launched his nascent Democratic presidential campaign last week, has emerged as a vocal critic of both Warren and her proposed wealth tax (he suggested it was unconstitutional at the beginning of the year).
In total, the 20 richest Americans donated roughly $8.7 billion to charity in 2018, just 0.8 percent of their collective net worth. Excluding Gates and Buffett -- the top givers -- that plummets to $2.8 billion, or 0.3 percent. According to Zucman, the annual revenue from a 6 percent wealth tax on the 20 richest Americans would be about $60 billion.
To compare, total charitable giving in the U.S. (itemized on tax returns) was about $269 billion in 2017, or 0.33 percent of household wealth, Zucman said. Charitable giving by the top 20 billionaires, not counting Gates and Buffett, accounts for 0.32 percent of their wealth.
“They give less, relative to their wealth, than the average American,” Zucman wrote on Twitter.
Still, there are some caveats in the data: For starters, Forbes said it only counted money that reached beneficiaries, excluding commitments that have yet to be paid out. Gates and Buffett started the Giving Pledge in 2010, vowing to give most of their wealth to charity during their lifetime or to commit to doing so after death.
Zuckerberg and his wife, Priscilla Chan, also announced plans almost four years ago to donate 99 percent of their Facebook shares to the Chan Zuckerberg Initiative, a company that uses technology to solve challenges like eradicating disease and reforming the criminal justice system, according to its website.
The full amount is pledged over the course of Zuckerberg's life, and he will not give more than $1 billion each year in the immediate future. (In a regulatory filing, Zuckerberg said he plans to maintain control of the company "for the foreseeable future.")
It also is comparing giving in one year (2018) compared to wealth accrued over the course of a lifetime. Forbes also purposefully ignores donations or promises to foundations that the foundations haven’t spent yet.