Wealth concentration is at a level that has not been seen since before the Great Depression in 1929. 8 people own half the wealth of the human population. These are the Super Wealthy. The richest 1% of Americans have more wealth than the bottom 90%.
What these super wealthy choose to do with their wealth is down to their own personal morals and ethics, as well as the laws of the land. In the US a citizen will always pay tax to the US regardless of the country they live in. Maybe this is why the American super rich have a strong history of philanthropy. They are going to remain in the US and want to be remembered by their legacy.
Wealthy Americans such as the Rockefeller family, Vanderbilt family, Carnegies, Stanfords, Fricks and Dukes are remembered by their philanthropic legacies.
Today, US billionaires continue to make philanthropic donations. Bill and Melinda Gates and Warren Buffett have pledged to give away their wealth in their lifetime through the ‘Giving Pledge’. Mark Zuckerberg from Facebook has pledged to give away 99% in his lifetime. Michael Bloomberg says that ‘with great wealth you can’t spend it or take it with you’.
The UK has a similar wealth concentration to the US with a super wealthy elite. However, philanthropy does not seem to have crossed the Atlantic. In 2016 just under $10bn was donated to philanthropic causes in the UK against US$390 bn in the US. If this is adjusted for the population size difference, then the UK donation would equate to US $50bn, or 1/8th of the amount pledged by Americans. In 2016 Lord Sainsbury made the largest single donation of £40m (he is ranked 217th on the UK rich list).
What can be done to encourage a culture of philanthropy in the UK? In the US if you make it to the top of the ladder, you are expected to help others, not pick the ladder up and run away. In the UK we don’t see much of this behaviour, in fact we are more likely to see the super wealthy relocate from the UK to countries with low or zero taxation.
Maybe instead of producing the Sunday Times Rich List celebrating the wealth of the super wealthy, we should also list the philanthropic donations of these individuals and celebrate the generosity of the super wealthy. Can we look to have legacy institutions and foundations in the UK to carry the names of great donors? Maybe, in this time of extreme wealth concentration, its time to look at the UK tax laws with regard to relocation of tax domicile.
Rebel Economics 
Sensible policy prescriptions Jenny. What we want to encourage amongst the super-wealthy is a sense of belonging and obligation to the country that provided the social, legal and economic infrastructure that aided their wealth creation. As you say, Americans have that sense of obligation. Wealthy Brits used to be very philanthropic. I’m sure that with the right incentives and encouragement, that can be recovered. But punitive tax rates are not the answer.
LikeLike
A thoughtful piece Jenny. There is also a balancing contrast in terms of the UK and US’s very different health and social security systems. All UK taxpayers are ‘philanthropists’ in the sense that their taxes and national insurance contributions fund those public services, which are available to all.
The Sunday Times’s first ever list of top UK taxpayers makes interesting reading.
LikeLike
Slightly off topic, but relevant. I supported the Conservative Party for many years, while my job brought me into contact with thousands of business people, predominantly running SMEs. We had similar, conservative, philosophies. But the Brexit issue has brought into focus that the parliamentary Conservative Party is mostly financed and run for the benefit of big business, which is globalist, self-serving and to a degree anti-competitive. Big business, the modern parliamentary Conservative Party and the EU make excellent bed fellows! No surprise then to see George Osborne at Davos. A truly Conservative Party cares about communities and the super wealthy being good citizens. This Conservative Party is run for the benefit of people like Luke Johnson. I won’t vote for it again until it reforms.
LikeLike