CEO who slashed his pay by $1M and upped his employees' minimum salary to $70K says billionaires giving to charity is 'one of capitalism's biggest PR scams'
A CEO who slashed his own pay by $1 million and upped his employees' minimum salary to $70,000 has said billionaire philanthropy is 'one of capitalism's biggest PR scams'.
Dan Price, founder and CEO of the credit-card processing company Gravity Payments, hit out at billionaires who enjoy praise for their charitable giving when they actually donate a smaller fraction of their fortunes than the average American.
Price said the average billionaire donates just 1 percent to charity each year while research from Giving USA shows the average American parts with 2 percent of their fortune.
The 36-year-old entrepreneur, who became a millionaire at the age of 31, also cast doubt on the motives behind philanthropic giving among the nation's richest claiming it 'helps them avoid having to face steeper bills' by paying more taxes.
Price weighed in on the debate as Washington state lawmakers are currently mulling a billionaire wealth tax that, if passed, will implement a 1 percent tax on people who have more than $1 billion in wealth.
Price gained instant recognition in 2015 when he announced he was raising the minimum wage at his Seattle headquarters to $70,000 and lowering his own wage from $1.1 million to $70,000 to match his staff.
A CEO who slashed his own pay by $1 million and upped his employees' minimum salary to $70,000 has said billionaire philanthropy is 'one of capitalism's biggest PR scams'. Dan Price (right), founder and CEO of the credit-card processing company Gravity Payments, pictrued in 2019 with an employee cutting the ribbon on his Idaho site
Price hit out at billionaires who enjoy praise for their charitable giving when they actually donate a smaller fraction of their fortunes than the average American
Price slammed the so-called philanthropists who benefit from 'glowing articles, a hospital named after you and a massive tax write off' when they donate to charity despite donating a smaller proportion of their wealth, in a Twitter post Sunday.
'One of capitalism's biggest PR scams is the 'philanthropist.' The average billionaire donates 1% of their fortune to charity yearly - less than non-billionaires,' he wrote.
'But when you donate $200 you don't get glowing articles, a hospital named after you and a massive tax write off.'
The businessman shared a link to an Observer article detailing The Chronicle of Philanthropy 2020 ranking of top charitable contributions.
The ranking found that, while major corporations and their wealthy owners benefited from record profits during the pandemic, by proportion, they donated record low amounts to causes in 2020.
Amazon boss Jeff Bezos was the top charitable donor in 2020, the ranking found, but his increase in donations did not correspond with his increase in wealth.
Stocks in Amazon surged as people turned to online orders as retailers shuttered and stay-at-home orders were issued.
As a result, Bezos' already bulging wallet ballooned further with his net worth now standing at an estimated $196 billion, according to Forbes.
Price with employees at the opening of his Idaho office in 2019. Price said the average billionaire donates just 1 percent to charity each year while research from Giving USA shows the average American parts with 2 percent of their fortune
In 2020, Bezos pledged $10 billion to the Bezos Earth Fund - his venture launched in February 2020 to invest in scientists, activists and other organizations with the aim of tackling climate change.
However the fund handed out just $791 million in grants in 2020, according to the Chronicle.
He also donated $100 million to food bank charity Feeding America.
Based on these figures, MarketWatch reported Bezos donated just .5 percent of his net worth last year - a quarter of the 2 percent the average American donates each year.
As well as the significantly lower proportion of philanthropy to total wealth, Price blasted billionaire philanthropists such as Bezos as he said they pay far less in charitable donations than they would pay if that money was included in their taxable income.
'In reality, the amount [billionaires] donate is a fraction of what they would pay if their tax rates were in line with the working class,' he told MarketWatch.
While people donate to causes for 'various reasons', Price pointed out that billionaires benefit from philanthropy for tax reason.
'I think billionaires donate for various reasons, but it's clear that giving away the equivalent of what's in their couch cushions helps them avoid having to face steeper bills that would actually make a difference in solving systemic problems,' he said.
Data shows Jeff Bezos (pictured) donated just .5 percent of his net worth last year - a quarter of the 2 percent the average American donates each year
Price's comments come as he has publicly supported a bill currently being debated by lawmakers in Washington state which would ultimately tax wealthy business owners like him a higher amount.
If passed, the HB 1406 bill would be the US's first ever net-worth tax of any state and would apply a 1 percent levy to people with a net worth over $1 billion.
Bezos, who has often come under fire over his tax payments, alone would pay almost $2 billion a year in tax under the proposed law.
The outgoing Amazon boss, together with Bill Gates, Steve Ballmer, and Mackenzie Scott, would account for around $4.8 billion a year in payments to the state if it passes.
Price said the bill could help plug the state's budget shortfalls and would help correct the current system where low-income households pay almost 18 percent of their income in taxes compared to 3 percent or less for the highest-income households.
He hit back at the argument that 'billionaires don't need to pay taxes because they already donate.'
The Seattle office of Gravity Payments. Price also cast doubt on the motives behind philanthropic giving among the nation's richest claiming it 'helps them avoid having to face steeper bills' by paying more taxes
'In reality, the amount they donate is a fraction of what they would pay if their tax rates were in line with the working class,' he told MarketWatch.
Price hit headlines in 2015 when he pledged a minimum salary of $70,000 for all staff in his Seattle headquarters by cutting up to 90 percent from his own $1.1 million pay day as he said he was 'sick of being part of the problem.'
'Previously, I was making a million dollars a year and people working for me were making $30,000 a year and that's wrong. I was feeding into the problem,' he said at the time.
Four years later, he raised the minimum salary for his Idaho employees by $10,000 with immediate effect and then to $70,000 by 2024.
The group of employees, who previously worked at ChargeItPro before Gravity Payments bought the company three years ago, were being paid a minimum salary of $40,000 a year.
Last year when the pandemic struck businesses and millions lost jobs nationwide, Price said he avoided layoffs by asking employees to take a temporary pay cut. Staff were later paid back.
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