TAX THE RICH! SAY THE RICH – Meet Patriotic Millionaires Morris Pearl and Erica Payne
TAX THE RICH! SAY THE RICH – Meet Patriotic Millionaires Morris Pearl and Erica Payne
By Elizabeth Njambi
How does it feel to have more money than you could ever spend? What is it that makes someone who is a millionaire fight for higher taxes on the rich? How does playing a rigged game of monopoly reveal how rich people’s minds work? What chance that President Joe Biden can reverse the relentless lowering of taxes on the richest people?
Nadia and Max are joined by Erica Payne and Morris Pearl – founders of the Patriotic Millionaires, a group of wealthy individuals leading the charge to raise taxes on the rich, fight for a livable wage, and combat political and income inequality. Morris Pearl, a former managing director of BlackRock, is chair of the Patriotic Millionaires. Erica Payne is founder and president of the Patriotic Millionaires, an American public policy commentator, author and progressive strategist. They have co-authored a book out now called: “Tax the Rich!: How Lies, Loopholes, and Lobbyists Make the Rich Even Richer Paperback”.
Find out more about the Patriotic Millionaires at https://twitter.com/PatrioticMills.
This is the second episode of season 4 of the EQUALS podcast. And if you’re joining us for the first time, tune in to our earlier interviews – from talking with the award-winning journalist Gary Younge on what we can learn from Martin Luther King Jr to fight inequality, to best-selling author Anand Giridharadas on whether we need billionaires, Zambian music artist PilAto on the power of music, thinker Ece Temelkuran on beating fascism, climate activist Hindou Ibrahim on nature, and the Managing Director of the International Monetary Fund Kristalina Georgieva on what comes after the pandemic.
Do listen, subscribe/follow and leave a rating/review. Follow us on Twitter @EQUALSHope
INTERVIEW WITH ERICA PAYNE AND MORRIS PEARL
(Welcome)
Who are the Patriotic Millionaires?
Nadia: We’ve given our listeners a really top-line idea of who the Patriotic Millionaires (“PMs”) are and what it is that you stand for, but we really want to hear it from you. Just who are the PMs?
Morris: The short answer is, it’s a group of rich millionaires who don’t want to live in a country as unequal and unstable as this one is. We want to do something about it. Doing something about it requires a bunch of things, but one of them is people like us, rich millionaires, paying higher taxes.
Reclaiming the Narrative
Nadia: Well, that’s a very clear message and a clear mandate. I remember the first time I came across the PMs a few years ago, the first thing that struck me was the name. It almost sounds as if it’s reclaiming the narrative. What it means to be patriotic. Just wondering, how is that name received even? What can you say about getting the political communications right on this agenda?
Erica: Well Nadia, the name choice as very intentional. The reason I named the group initially the “Patriotic Millionaires” is that part of the purpose in (forming) this group was to attack the root premise of the conservative narrative around economics and taxes. The conservative narrative is, ‘It’s my money. I made it all by myself and now you’re coming and giving it to undeserving poor people’. I believe that there is an inherent message in there that the undeserving poor people are probably black and brown communities. There’s a huge amount of racism. It is kind of built into the cake around our economic conversation. And so, I wanted to attack that root premise, and instead replace it with the premise that paying taxes is fundamentally part of your patriotic duty and it is just incredibly unbecoming of … wealthy people to fuss about it as much as they do.
(In addition), … we have had a number of Presidential candidates who run bragging about how low the tax rate will be. I cannot imagine having worked for a company and somebody (coming) in to interview (to become) CEO of the company and in their interview they bragged about investing a little in your company as is humanly possible. Why would you hire that person? I wanted to make that kind of rhetoric on the campaign trail verbatim.
Message to Millionaires Outside the US
Nadia: You’ve created this growing movement here in the United States (US) with the PMs. We’re seeing the social movement more broadly evolving in this country. I’m wondering when we look to the UK, to Europe for example, what’s your message to millionaires there?
Morris: My message to millionaires there is, frankly, being very rich is not enough. You have to have a stable society. Having the largest fortune in the world did not help Nicholas Romanov.
Max: (Laughs) That’s well put.
Philanthropy vs. Taxing the Rich
Max: … One of the challenges we get whenever we call out to tax the rich and against this narrative of low taxes is … about philanthropy and the sense that, particularly in the US, philanthropy is big. Quite a lot of many is given away. You could in fact say that the rich in the US are far more generous than the rich in Europe for instance, who really don’t give much at all. How do you come back on this? … Why are we worried?
Morris: I think this is a ridiculous argument that the rich people make. First of all, all their philanthropy together is not even 9% of the amount of money that the federal government spends here in the US. But it’s great! I’m all for rich people giving away as much money as they want to, to do whatever. But it’s not sufficient! It’s not enough!
Just How Rich Are You!?
Max: Morris, maybe at the risk of getting a bit personal, have you got a lot richer during COVID-19? Are you feeling a bit richer than usual and what do you think about that?
Morris: Yes, my family and I, are far wealthier than we were before the pandemic started. You know (all) billionaires have made over 1.5 trillion Dollars while over half a million of our countrymen have died over COVID-19.
Max: That’s just nuts, isn’t? What’s it like being really rich and just seeing your money grow without having to do anything? It must be such a strange feeling! How often do you check your bank balance?
Morris: Well, it’s not strange for me and no, I almost never look at my bank balance, because I don’t have to. [Max: (Jokingly) Well, I suppose not. It makes sense] My father-in-law told me, the point of having a lot of money is to not have to think about money.
Why Do the Rich Want to Get Richer?
Max: That’s so true. It’s the sense that it just doesn’t matter, does it? So, why do billionaires want an extra 10, 20, 30 billion? I don’t understand, you know? If you’ve got (so much) money so you never have to worry again, why fight for that extra 10 billion?
Erica: I think it’s two things. I think the first one is bragging rights. There is a reason that Donald Trump pretended to be his own PR agent when he was trying to get on the ‘Forbes 400’. I called a millionaire the other day to enquire as to the wealth of another millionaire because I was looking for a billionaire. The millionaire I called knew within 10 seconds how much money this other person I was asking about had. So, it is bragging rights.
And then the second … is there comes a point where someone has so much money, it not money anymore: it’s power! People want to have more power and if they can look at their bank account or their holdings or their empires and feel that sense of greater power, I think that’s actually what they’re going for, more than it is any specific material gain or good or service that they can get with money that they wouldn’t have gotten with less money.
What’s Gender Got to Do with It?
Max: Is there something really masculine about this? Do you find that rich women and rich men are the same? Or is it just this kind of competition for how many billions you’ve got? … I wonder whether there’s a gender element to this as well as a race one. …
Erica: Well, it wouldn’t surprise me if there was probably some elements of gender built into that. The vast majority of super-rich people are older white men and there just aren’t as many women in that space, but maybe they can get to be just as greedy and selfish when they get there as men folk have been.
Max: I was just wondering (because) we just saw recently the divorce of Jeff Bezos and his wife has been a very progressive donor, hasn’t she? She seems very, very different in outlook to him. It just makes me reflect. Maybe there’s something about them all being white men that is creating some of these problems.
Erica: … I’ve studied a fair amount of psychology and we had a psychologist on a Power and Money conference that we did the other day named Paul Piff. People react to power in very similar ways. This psychologist ran an experiment where he rigged a bunch of monopoly games. It’s a brilliant experiment and what he found is that within 15 or 20 minutes of playing this monopoly game that the rigged players knew the game was rigged in their favour, … they started behaving more aggressively to the other players who were not advantaged and in one amazing sort of moment of internal delusion, they observed one of the guys who had a rigged position in the game, after the game, try to mansplain to his fellow players how he had won, naming 9 of the obvious reasons it was in his favour but instead talking about his acumen: how he was moving his poodle on the board, or whatever. [Max and Nadia laugh]
Something happens in peoples’ brains, when they get this advantage. Studies have shown that. So, why on earth would we create a society and a tax code that virtually guarantees that a tiny number of people are going to accumulate a disproportionate amount of income though an economy that is rigged in their favour? … and then we deify them in the press. We want to hear what all the millionaires have to say about this, that and the other thing! It’s nuts!
Max: (Jokingly) I agree with you so much, it hurts.
“A Traitor to our Class”
Nadia: … Have you lost a lot of rich friends by taking on your peers? We hear about this concept to being a ‘traitor to your class’ and wonder, have you ever been accused of (this)? And how does that make you feel?
Morris: Well, frankly, the answer is No! Because almost everybody, when you talk to them privately, is on our side because they understand the problems of our nation getting more unequal and becoming more unstable. But a lot of people can’t really speak out publicly about that. I can tell you from my own first-hand experience. When I first started working on tax policy, I was doing an interview on television once and after that I was still working at BlackRock. And somebody called the firm and they complained, ‘oh it’s not right that somebody working on managing our money is in favour of us paying more taxes’. And that’s the thing – that a lot of people just feel pressured not to speak out against anything that might bother some of their clients.
Economy Rigging 101
Nadia: Let’s go to the lobbying industry. You’ve written this book, it’s brilliant: “TAX THE RICH: How Lies, Loopholes and Lobbyists Make the Rich Even Richer”. You’ve got this fabulous Chapter on how to rig an economy to work for the rich. Let’s say …I’m a millionaire and I have dreams of becoming a billionaire. How can I rig the system to get there? Talk me through this. Walk me through my self-help guide on how I can use the system and manipulate it to make it work for me!
Morris: There’s a lot of reasons why rich people pay far lower taxes than people who work for a living. So, I’m just going to go through the few things that are in our book. The main thing, we in the US treat things differently for tax purposes depending on how you make it. There’s one rate for people who work for a living; (a) lower rate for people who get investment income (long-term capital gains); and people who inherit money don’t pay income taxes at all.
So, just for example, if I make a 100 thousand dollars making profit by selling some stock, and somebody like you makes 100 thousand dollars getting a pay cheque every week, having taxes taken out of your pay cheque, you will pay thousands of dollars in US Federal Income Taxes. I won’t pay one single penny! And that’s just one of the most fundamental unfairnesses in the whole system. And frankly, that’s how most of the very wealthy people, don’t have to pay much taxes. Because they’re so wealthy, they don’t need any income.
Nadia: Right. So, the first thing is the tax laws are rigged against the working class and really designed and favour these millionaires already. And how are they using their power to make this continue to be the case?
Morris: Rich people are using their money to get more and more political power. And then they’re using their new political power to change the rules to make themselves even richer. It’s … spiralling out of control.
Erica: In 2017, the Republican lawmakers in Washington rewrote the entire Federal Tax Code. They passed the new Republican Tax Code on a party-line vote. No Democrats voted for it and basically every Republican did vote for it. So, 14 days after that Tax Bill passed, Paul Ryan got 500 thousand dollars from the Coke Brothers. The Coke Brothers then invested 20 million dollars in a marketing campaign centred around the concept of ‘job-creators’ to try to sell this absurd narrative to the American people. The amount of money the Coke Brothers are estimated to have saved from their tax bill from the 2017 Republican rewrite was about 1.5 billion dollars!
And so the built-in financial incentives are staggering. And it is, as it turns out, relatively inexpensive to pay off a lawmaker. So, the best return on investment if someone is only looking at increasing their post-tax take-home, the best gig in the tax code is to go buy off a bunch of lawmakers and make sure your Tax Code doesn’t go up.
Mitch McConnell and Fellow Republicans
Max: So, Erica you’ve talked about the role of the Republicans and the Trump Tax Cut. I know Mitch McConnell played quite a role in all of this and I think (jokingly) you were trying to give him a copy of your book. Tell us about that. I think we’re all familiar with Mitch McConnell as being “Mr. Evil” on many, many issues, but why is he the bad guy on this tax-the-rich point?
Erica: The Republican party has basically become a wholly-owned subsidiary of conservative oligarchs in America. It’s not more complicated than that. And so whatever social issues … they want to talk about, when it comes to it, this is all about money. And it’s all about rigging an economy to gain a permanent advantage for a very small group of people who happen to also be at the Drawing Board, drawing out what they want the economy to look like. And Mitch McConnell is their First Lieutenant when it comes to driving those changes through in the Senate and the House. But he doesn’t have to work that hard, y’all! I mean, the whole Republican Party is basically nothing but a barrel of corruption at this point, owned by a bunch of billionaires.
Max: So, it wasn’t that hard for him really, to get it pushed through?
Erica: And it’s not that complicated. Mitch McConnell wants to make sure that a very small number of people who fund him and his fellow Republicans campaigns stay really rich so they can continue to fund their campaigns. Because on some level it’s about money and power and the intersection of the two. So, the money delivers power; and the power delivers money. The story is as old as time. It’s just gotten so bad that now we all have to pay attention to it and fix it.
Fixing It: Is there Hope?
Max: Talking of fixing it, you know we have a new President in the White House. He’s talking about capital gains taxes being the same level as income taxes, which shouldn’t be revolutionary, but it sent shock waves around the world, (Laughs) which says something about how bad things have got. How optimistic are you now, about the New Administration? Have we bottomed out?
Morris: I hope so! I think we’ve made a huge amount of progress over the last couple of years. These ideas have moved from fringe ideas a few years ago, to being debated by people who were running for President this last election season; to being talked about by the President of the United States and people in the Senate Finance Committee now. So, I don’t know what’s going to happen, but I think we might win. And I think we will win if other rich people speak up and call their Senators and call their Congressmen and explain to them that it really is in all of our interest that we change the course of our nation, because it is not sustainable the way it is.
Erica: I never want to be one who dismisses the power of the other side because I have seen what they have done over the last … 70 years of our history where tax rates for the richest people in the country and corporations has gone in one direction which is down, but we do have a surprising leader here in the White House who is talking about reforms that would not just bring in more revenue to the Federal Government, because that’s not really necessary, but that would unrig the economy.
And we have an opportunity to do this with 51 Democratic votes. … To make the kind of changes that Biden is talking about in the Tax Code, we need 51 Senators. And we can get 51 Senators with just Democrats and people who caucus with the Democrats. So, right now, the entire ball-game is about 10 or 12 Democratic Senators who will be more reluctant than some of their more progressive colleagues to support the kinds of changes that Biden is promoting. So, we have about a 3 or 4-month period where we can make dramatic and crucial reforms to our economy. So, this is particularly a place where regular Americans – if you get involved for the next 3 to 4 months, we can fix this!
Learn More
Erica: … If people want to learn more, go to https://taxtherich.com/ . You can see the book there, and you can join the campaign to try to unrig this system. And… we’re starting to expand into Europe. We have our first employee in the UK now, because we believe we need to have a worldwide movement in order to address this on a global scale. So, we’ve got a real focus on the US, particularly in the next 3 to months, but over the next years you’re going to see us expanding a bit internationally. As Morris said earlier, this doesn’t turn out rich people either, so let’s fix it for everybody!
REFLECTIONS
After the interview, Max and Nadia reflect on learning and thoughts from it.
Nadia: Well, that was a fascinating conversation. It was pretty interesting to hear Morris be so upfront about his wealth, right?
Max: Yes, it’s just shocking that during the pandemic while so many people have been going through so much, he and indeed billionaires, have got so much richer and also, I like the point he made: of course he doesn’t look at his bank account. Why would he ever look at his bank account? He doesn’t need to. Whatever he wants, he can just buy. I thought that was quite amazing.
Nadia: Makes sense. There were a lot of things that came through in the conversation. And it was very focused on the US, because that’s what the PMs do and I guess they’re expanding, but what happens in the US really does set the trend for the rest of the world. So, it is a relevant conversation globally. It’s a way to shift the narrative in a global sense when you see things shifting in the US and it’s not just the US leading by example, which I feel like they are doing – they always do – but it’s actually that they have the power and influence to move other Governments because of their powerful role globally.
Max: Oh, I think it’s absolutely critical. … The US is the most powerful country on earth. If that debate shifts there, then it will start to shift all over the world.
And this has happened before… there’s another history that we’ve talked about before in the podcast, where the US was a real leader in taxing rich people… where you had top rates of income tax of like 93%! Taxes on income from capital was twice as high as it was on the income from working! These were all in living memory. So, I think it’s great to see the US start to talk like that again.
You know what really struck me, was when Morris said to you, on that question about being a traitor to his class, the famous phrase that was used for Roosevelt, - that his rich friends don’t really disagree with higher taxes and that maybe it’s a crumbling wall of ideology. If we just push it, it’ll crumble and most people will be happy to pay a bit more tax.
Nadia: I’d like to think so.
Max: One question for me in all of this and in the last couple of months is, we’ve had this race to the bottom and Erica’s really clear on that. She goes to the other side, about a 70-year streak of taxes have gone only one way down on the rich. Do you think we’ve hit rock bottom? Do you think we’re bottoming out and things are going to start getting better from now on?
Nadia: I personally do think that there is a lot of momentum, and I don’t know that it can go much lower… there’s momentum from the global tax movement. There’s momentum from politicians such as Janet Yellen (who) has been very vocal now in this new US Administration. But also, with COVID-19 and seeing revenues fall, seeing sheer inequality of rich corporations especially in the tech industry just getting richer and richer… I feel like it is this moment where we can see a big shift and we could even see a global agreement on a minimum tax rate for example. Maybe even this summer. Things that were just a pie in the sky ideas a few years ago. We’ve come a long way. I suppose we can make progress here.
Max: I feel strange about it. If we look at the potential agreement on a global corporate minimum tax rate, which could happen very soon indeed, like at the G7 and the G20 this summer. In some ways that is an amazing step forward, to have that kind of global tax agreement, but at the same time, the level they are talking about is 15%. I mean, that is appallingly low. Corporate taxes in the US were around 50% for like 30 years after the war. So, I think we are seeing progress but just like you said, we have got so bad and taxes on the rich are so low. It’s very hard to exaggerate just how appalling it is and how much higher we’ve got to climb. And I think as progressives and activists, we need to keep moving the goal post and keep demanding more.
Keep thinking like the other side. You know I always imagine that (in) the mid-60s when taxes on the rich were at the highest, there was kind of right-wing think-tank in Washington. I don’t even know if they had Whiteboards then. They probably just had like a flip-chart or something. They’re having like a brainstorm and no idea is too crazy. Someone puts upon the board, “Corporate Tax Rate: 15%” and they get laughed out of the room at such an insane suggestion. But they got there. You know they basically destroyed corporate tax. I think we need that kind of ambition. We need to be having corporate tax rates up around the 50% mark again if we really want to beat inequality and get rid of billionaires. I think it’s really important!
Nadia: I’m with you and I think that is our role as civil society, right? To just keep pushing…for the stars and you get to the moon. But also, I think where we look for inspiration is also important.
I really feel it is important to give a shout out to Argentina in this episode, who recently introduced a Solidarity Wealth Tax on individuals. It’s like a one-off tax to help pay for medical supplies and support small and medium businesses and student scholarships… It’s basically this tax that is levied on Argentina’s 12,000 richest people. So, just a tiny percent of the population who have assets of over 2.5 million. That alone is going to raise some 3.5 billion dollars (estimate). There are some really amazing examples out there as well and so great to see them happening.
Max: Absolutely. Particularly on this issue of wealth taxation, I think we will see more wealth taxes being applied in other countries. And as you said, if not now, when? In the heat of this crisis, in the face of this economic calamity, we cannot do what we did with the financial crisis and fail to increase progressive taxation and just end up with more austerity and more cuts. It’s got to be different this time around!
Nadia: Absolutely! … Let’s al get out there and fight to tax the rich.
Elizabeth Njambi is the Producer of the EQUALS Podcast. She also manages the EQUALS Blog. Elizabeth is a Kenyan Advocate passionate about access to justice. She is the Founder and CEO of Wakili.sha Initiative and Co-host of the Wakili.sha Podcast.