Should we Raise Taxes on Billionaires?
Philip Kotler
Should individuals have the right to own more than a billion dollars? Many of the 3,000 or more billionaires have considerably more than just one billion dollars. Elon Musk, the richest billionaire, has $470 billion, primarily from his ownership stakes in Tesla and SpaceX.
How do billionaires use their money? We know that they buy expensive cars and clothes, they own several homes, and they probably own a private plane and a yacht.
We know that billionaires exercise disproportionate political power. They decide what candidates run for elections and they spend more to influence who wins. Their winning candidates make sure through lobbying that the interests of the rich are protected.
Let’s examine the spending behavior of one billionaire for the light it might shed. Jeff Bezos, founder of Amazon, spent $500 million to build a huge private yacht. Yet he could have chosen to spend $500 million to build 2,500 homes for poor families who can’t afford to build their own home.
In June 26–28, 2025, Jeff Bezos spent $50 million in Venice, Italy to celebrate his marriage to Lauren Sanchez. That amount could have bought five million $10 dinners to hungry adults and children.
However, in all fairness, Bezos has given several large donations to good causes. The Bezos Earth Fund gave 10 billion to support climate change. With the Bezos Day One Fund, Bezos made a $2 billion commitment to combat homelessness and support early education. He donated $100 million to Feeding America.
Jeff Bezos had previously divorced his wife, MacKenzie Scott in 2019. Bezos made a legal settlement to give MacKenzie Scott $38 Billion. She did not buy a yacht. Since her divorce, Scott has given away $19 billion to good causes. Recently she gave $700 million to various historical Black Colleges and Universities. She is seen as developing a refreshing view of how the rich can spend their money helping others.
Where Do Billionaires Stand on Helping Others in Need?
Do many billionaires use their fortune to help create a better life for the poor? Some do. Bill Gates clearly cares about the poor. He and his ex-wife Melinda French Gates created in 2002 the Gates Foundation and a Global Fund. That fund distributed over $45 billion to 155 countries and it is estimated to have saved 38 million lives. The Gates billions have fought terrible diseases such as malaria and dehydration that kill countless young and old people in developing countries.
Bill Gates’ friend, billionaire Warren Buffett, was so impressed with the Gates Foundation that Warren donated $48 billion dollars to help Bill Gates go further to improve the lives of the poor. And in 2010, Gates and Buffett both partnered to approach other billionaires to encourage them to sign a Giving Pledge to give half of their money to good causes. As of mid-2025, 256 individuals, couples, and families have signed the Giving Pledge. 194 of the total signers are from the United States.
The Good Cause Question
The question is often asked: What is the most important good cause that all caring people should invest in? One group’s answer: the climate crisis! If we can’t get companies to practice sustainability, the earth will get warmer and lead millions to flee from their homes in search of countries with cooler temperatures.
Another group will answer: Guns will end up killing more people and society will need better gun control.
Another group will answer: Racism still haunts and destroys lives. Billionaires should finance programs that will diminish racist thinking and behavior.
Still another group will answer: Pollution will destroy our air, water, and soil and polluting companies must be stopped.
Clearly it is difficult to rank different society-wide problems in order of importance.
Billionaires Are Free to Choose their Own Causes
All billionaires hire financial experts and lawyers to manage their investments. Their experts have to be on the lookout for attractive investments that would yield a good return. Billionaires want to grow their wealth further. Billionaires all read Forbes, which reports the latest gains of the wealthy. No billionaire wants to slip very much in their reported wealth.
Billionaires’ greatest fear is losing their wealth or their life. Several billionaires have built huge bunkers in remote places where they could go safely underground, especially if rioters started to come after them. In addition, many billionaires spend lots of money supporting scientists who are researching “living long” therapies.
Needed: A More Human View of Billionaires
I am one who has published articles criticizing billionaires for their lack of spending money to help the poor. Interestingly, the wisest thing that the superrich can do is to spend more money to improve the lives of the poor.
I am increasingly trying to reduce my stereotypical thinking about the rich. Billionaires are human beings like the rest of us. They face the problem of how to live in this chaotic world and support their families and the institutions they care about. Like the rest of us, they have to be careful about reporting their income correctly and paying proper taxes. Their finance people and lawyers often come up with ideas on how to reduce their taxes. Billionaires must steer carefully between legal tax avoidance and illegal tax evasion. Legal tax avoidance takes advantage of loopholes within the existing tax code. Tax evasion, on the other hand, consists of hiding assets or income through using offshore bank accounts, shell companies, or bogus trusts to disguise ownership.
Real Need: Raise Taxes on the Super Rich
Campaigning for a law that no one can own more than a billion dollars would not get mass support. Furthermore, many billionaires have done great things to arrive at their wealth. They have created innovations such as computers and cell phones. They have built brands offering much better value than competitors. We don’t want to discourage innovations and more excellence in business or in life. In fact, we want to encourage more successful innovations and excellent products and services even if it creates more billionaires.
The right move now is to raise taxes on the rich. In 1954 when Dwight Eisenhower was President, the tax rate on the highest incomes was 90 percent. That rate did not hurt the Eisenhower economy. When Ronald Reagan took office in 1981, the highest income tax rate was 70%. By the time Reagan left office, the top rate had been reduced to 28%. When Republicans are in power, they resist high tax rates on the rich and even advocate a further lowering of tax rates, as seen now in the Trump Presidency. When Democrats get power, they will push for higher taxes on the rich but Republicans block this.
There is a good chance that Democrats will be in power again. Their strategy will be to raise taxes on the rich and even impose a wealth tax. Whether they succeed depends on how much power that have gained.
In February 26, 2019, Warren Buffett and Bill Gates said, “The wealthy are definitely undertaxed relative to the general population.” In April 15, 2025, Bill Gates again said that the American tax system is decidedly unfair and he wants to change it.
The question remains: “Is it fair and just for some people to possess billions of dollars while huge numbers of people go hungry or homeless?” This question will face voters in future elections and hopefully the answer will be decided by democratic means.
