How to Align Great Wealth with the Common Good
Philip Kotler
There are now more than 3,400 billionaires in the world, holding a combined net worth exceeding $20 trillion. Nearly 1,000 live in the United States, with hundreds more in China and India. Their economic influence is enormous and growing.
Yet we know surprisingly little about two important questions:
- How much of their wealth goes to charitable causes?
- How willing are they to support higher taxes on wealth and income?
In 2010, Bill Gates, Melinda French Gates, and Warren Buffett launched the Giving Pledge, encouraging the world’s wealthiest individuals to commit most of their fortunes to philanthropy. About 250 billionaires have now signed the pledge.
This is a meaningful achievement. Yet 250 signatories still represent only a small fraction of the world’s billionaires. Moreover, the scale and effectiveness of billionaire philanthropy often remain unclear to the public.
At the same time, governments around the world are debating higher taxes on the wealthy. In the United States, the top federal income-tax rate once exceeded 70% during earlier decades and today stands far lower. Some policymakers want to restore somewhat higher top rates. Others advocate a direct wealth tax aimed at large holdings of stocks, bonds, land, and real estate.
Supporters of wealth taxes argue that taxing annual income alone does little to reduce accumulated concentrations of wealth. Much billionaire wealth exists in appreciating assets that may never be sold during the owner’s lifetime and can be transferred to heirs under favorable tax conditions.
Many billionaires oppose these proposals. They believe their wealth was legally earned and often created through innovation, entrepreneurship, and job creation. They argue that they already contribute substantially to society through investment, philanthropy, and economic growth.
Many are also skeptical about government efficiency. They worry that additional tax revenues may be wasted through bureaucracy, political favoritism, poorly managed infrastructure projects, or unnecessary military expenditures.
This raises an important question:
Would some billionaires become more open to higher taxes if they had greater confidence in how the money would be used?
Imagine a new approach.
Suppose the government created several independently audited national trust funds dedicated exclusively to advancing the Common Good. One fund would support educational improvement and innovation. A second would finance health-care research and access. A third would invest in climate resilience, clean air, and clean water.
Billionaires paying additional taxes could choose how to allocate the incremental portion of their new tax obligation among these trust funds. One person might direct all of it toward education. Another might divide it equally among all three. Others could support health care or climate initiatives according to their convictions.
This idea is not entirely new. Wealthy individuals already direct billions of dollars through foundations, donor-advised funds, university endowments, and medical research institutions. The difference here is that these contributions would occur within a transparent public framework designed to strengthen national priorities rather than private legacy projects alone.
The trust funds would operate transparently, publish annual performance reports, and be independently audited. Citizens could see where the money went and what measurable improvements were achieved.
Some critics will object that wealthy individuals should not influence public priorities through tax allocations. That concern deserves attention. Elected government, not billionaires, would still determine the approved national priorities, legal safeguards, and oversight standards. The billionaires would only choose among publicly authorized trust funds serving broadly recognized social goals.
This approach would not eliminate taxation. Nor would it privatize government. Rather, it would create a new partnership between private wealth and public purpose.
The deeper goal is to reduce distrust.
Many citizens distrust excessive concentrations of wealth. Many wealthy individuals distrust government competence. A well-designed system of transparent trust funds could help bridge this divide.
If successful, society would gain stronger schools, healthier citizens, and a cleaner environment. Billionaires, in turn, could feel that a portion of their wealth was being directed toward visible and lasting national improvement.
The challenge of our time is not simply how to tax wealth. It is how to align wealth with the Common Good.
If we can do that, we may finally discover a way to help great wealth help society as a whole.
