Setting a Great Example

I think many of us wake up slightly (or greatly) depressed at the state of our world. But once in a while, there are creative responses to some of the world’s problems. Here’s one: a 31-year-old Austrian multi-millionaire named Marlene Engelhorn is experimenting with addressing the debilitating problem of wealth inequality. A leading cause of the vast gap between rich and poor is a failure to level the playing field with each generation, which is what estate and inheritance taxes do. You cannot claim to have a democracy when some people are able leave their heirs millions of dollars, others can leave nothing and still others leave debt. As Adam Smith said, “The purpose of taxes is to remedy inequality as much as possible.” 

Austria abolished its estate tax in 2008. Engelhorn believes this is wrong. She has created an initiative called The Good Council for Redistribution, or Gute Rat für Rückverteilung, to look at the question of how societies redistribute wealth. “Something’s not right about me inheriting millions, not being taxed, while a person who is working 40 hours, maybe more, has kids perhaps … and they get taxed on their work.” 

She has created a process to imitate what could happen if her family had to pay an estate tax. She donated $27 million to the Good Council. Invitations were sent to 10,000 randomly selected people in Austria. Of the people responding to the invitation, 50 will be chosen who represent the country’s demographics. They will be paid to spend six weekends discussing inequality and redistribution. Based on the guidelines they create, they will have the task of redistributing Engelhorn’s gift. Engelhorn provided $3.2 million to cover the costs of participating, but she has no say in the final distribution of the money. 

Engelhorn and her ilk are a bright shining light into the world of the super wealthy. She is confident that ordinary people can solve vexing problems if they have the resources. The other good news is that she is not alone. In addition to this initiative, she has started a nonprofit called Tax Me Now bringing together multimillionaires from around the world to call for fair and just tax policies. This organization joins others that are mobilizing the world’s most wealthy people: Patriotic Millionaires, Millionaires for Humanity and Resource Generation just to name a few. 

Discussing taxes may not seem like the most fun use of time, but it is critically important. As activists, we decry the use of our tax dollars for military spending or for prisons and so on. We must keep doing that. But current laws that allow wealthy people and corporations to pay little to no tax means we fight over pennies while real dollars are hoarded around the world. Without a progressive plan for the redistribution of wealth, brought about by fair and just tax policy, a society that works for everyone will remain a fantasy.  

For readers wanting to take a deeper dive on this:

• Ten Facts You Should Know About the Federal Estate Tax
• America’s Inherited Wealth Dynasties Park Trillions Out of Reach of Taxation
• Opinion: The estate tax should help to level the playing field. Instead it’s letting the rich get richer