Billionaires’ ‘pledge’: The hidden catch

Three cheers for Bill Gates and Warren Buffett, said The Boston Globe in an editorial. Already known as great philanthropists, the world’s first and sixth richest men last week announced that they’ve persuaded some 38 of their fellow billionaires—including George Lucas, Larry Ellison, and Michael Bloomberg—to sign a “Giving Pledge,” in which they commit to donate at least half of their fortunes to charity over the course of their lifetimes. The total pledged so far is a staggering $120 billion. But just as important, these admired business leaders have set a great example in sacrificing “personal gains for the higher value of social progress.”

Pardon my cynicism, said Evan Newmark in WSJ.com, but the timing of this announcement is suspicious. It comes just as Republicans and Democrats in Washington are battling over whether to extend the Bush tax cuts. Democrats insist we must raise taxes on the “rich,” on the grounds that the country is “less equal” than it used to be. So along comes Warren Buffett—a staunch supporter of the president—to provide cover for raising taxes, by pressuring the wealthy to give “their money away,” as if they’ve got too much of it. The truth is that if the tax cuts do expire, it isn’t Buffet and his billionaire buddies who’ll feel the pain, but hundreds of thousands of doctors, small-business owners, and entrepreneurs. Many Americans are doing just well enough to count as “rich” under the tax code—with a family income of $250,000 or greater—but not nearly so well that they’re awash in “spare” money.

It’s liberal values that the billionaires are actually undermining, said Steven Pearlstein in The Washington Post. Charity on this scale helps promote the false notion that the rich’s wealth will eventually “trickle down” to the poor and the middle class. In reality, said Peter Wilby in the London Guardian, mega-rich people pay much smaller percentages of their income than do most Americans, thanks to the armies of accountants, lawyers, and lobbyists on their payroll. If Gates, Buffett and Co. really want to make the world a better place, they should “sign another pledge: to pay their taxes on time and in full.” That way these billions could be spent not according to the whims of messianic software tycoons, but by “the democratically elected and (at least theoretically) accountable representatives of the people.”

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