“Brazilian proposal at the G20 of taxing very wealthy individuals is absolutely necessary”, states North American millionaire Morris Pearl

According to Pearl, the rich are getting richer while the working class is losing hope due to ever-growing inequality. This disparity has reached a point where billionaires possess as much wealth as the total income of some countries, while millions of people around the globe face starvation.

Morris Pearl is a very wealthy United States citizen who thinks slightly differently from most of his business colleagues and investors. He worries about the historic levels of inequality and wealth concentration in the US. For this reason, he brought together wealthy individuals in the Patriotic Millionaires organization, which advocates, among other causes, that very rich people should pay more taxes—a proposal supported by the Brazilian presidency of the G20. Pearl has had a long career on Wall Street and was an executive at BlackRock, the American investment company and the world's largest asset manager.

The millionaire grew up in a middle-class family in rural Vermont, close to the Canadian border. As a teen, he wanted to be an accountant and graduated from the University of Pensilvania’s Business School; but he ended up becoming a computer engineer instead. He moved to New York where he spent years building computational models for investment banking transactions.

Morris Pearl gave an exclusive interview for the G20 Brasil website, discussing issues such as inequality, international taxation, and hope. He also explained why he considers himself an optimistic person.

How did you decide to come out of retirement and found the Patriotic Millionaires?

Twenty years ago, during the elections, my wife and I went to a convention in Boston, Massachusetts, where I found out that, for a few thousand dollars, you could become best friends with anybody. Well, almost anybody… It came to me that wealthy people have much more access to our political leaders. And besides, retirement wasn’t agreeing with me much.

So I went to work at BlackRock for a while and managed a group that was trying to figure out how much bank rescues would cost. My clients were the US Federal Reserve, The Irish Government, the Government of the United Kingdom, the Greek Government, and central banks. We were going to examine the banks to find out how much these rescues cost. (A bank rescue means that banks in financial difficulty receive funds from public money or the financial market to settle their debts.).

One day, I was in Athens, Greece, having a meeting in an elegant dinner salon on the top floor of a bank headquarters. I walked towards the window so that nobody would say that I was taking a second serving of dessert at the buffet. And for a moment I thought I was watching a parade, and then I realized it was actually a protest.

I came back to a few dozen executives whose jobs were probably being saved because they were getting a bank rescue and I thought to myself: are we really doing any good to the rest of the people out there who are suffering? That was when I decided that I had done enough for the people at Blackrock and went to work full-time to try and change our tax system.

So that we wouldn’t see the United States follow this same path, the path of people giving up on their government. That is why I have been trying for over 10 years to change the way our governmental policies work.

What does the organization advocate for?

At Patriotic Millionaires, we are a group of wealthy people, mainly from the United States and we are also getting many members from the United Kingdom, who understand that this growing inequality is destabilizing not only our nation but frankly the entire world. We watch the ascension of authoritarianism in some places because many people have simply given up on capitalism and we realize that it is not working for a large number of people.

So we are working on three things. One of them is making the tax system fairer. Because part of the problem is the investors like me, who do not work, at least here in the United States, and pay much less taxes than the people who work for a living.

We are working on the issue of the minimum wage per hour, we have laws about it, but we want to see a substantial increase. And also, we are working to ensure that every person in our country, and other countries, has the same political power, regardless of whether being individuals who work full time and will vote or who have millions of dollars to donate to politicians and spend on campaigns.

I was very lucky in my life because not everybody grew up with the opportunities I had for various reasons, many of which had nothing to do with anything I or my family did. We were in the right place at the right time, I was born in the right place and from the right parents. I grew up in a town where the majority of people are poor, actually. But from the very first day, it was instilled in me that I wasn't going to stay there and be a farmer or something like that. I was going to go to college and become a professional, and I truly believed that I could do anything. And I still believe in that, which is why I keep working.

And today, walking down the streets, I see frustration in people, they are willing to give up on things and only want some kind of massive change in our society. I understand that we must do something about it and I see that President Lula, in Brazil, is also trying.

What do you think of the Brazilian proposal under the G20 presidency to tax the super-rich?

The proposal of the Brazilian Presidency of the G20  - of having some kind of global minimum tax for very wealthy people - is absolutely necessary to bring some kind of justice to the system and find a way to ensure that those people are being treated fairly. It is something that gives people hope that things can become more equal with time and not more unequal, as it has been.

The majority of people today do not have any more hope, so they stop cooperating and think that we need a revolution. And I think that we must ensure people that the system we have is enough and that it has the capacity to offer their children a better life. I am engaged in this partly because I have two adult children and I want my granddaughter to grow up with the opportunities I had. and this is what everybody wants - to see their children and grandchildren grow with opportunities. That is why we are so worried about what is going on, with so much inequality all around. We are watching some people getting richer and richer with billions of dollars in their bank accounts. They have as much money as the income of some countries. Meanwhile, hundreds of millions of people do not have enough money to buy food. It is not sustainable.

How can the proposal contribute to reducing inequality?

First of all, in my country, part of the reason for inequality is the unfair tax system. Most people work to make a living, they have a job. They earn money with their work and every week money is deducted from their salaries to pay their taxes. This is how it works in the United States and some other countries. But I don’t have a job, I don’t have any money being deducted from anything every week. I live from the money I received from the investments I made in the stock market. If I want to pay taxes, I can, but I may not. I can simply withdraw money from my account at the broker's whenever I want to because I do not have an income.

But isn’t someone who works hard and makes as much money as I do (in a job, for example) paying too much out of their money in taxes? He can make the same amount that I make, but he pays much more in taxes. Hence, he will have less money. And so, people who are already rich are getting richer and those who are working for a living or struggling, are not. And that is not working for a lot of people. That is why if we change this we can deter the growth of inequality.

If we change the tax system so that people pay taxes over the money they make, regardless of how they make it, whether they have a job where they sell investments or they inherit money from their grandparents, they will pay taxes all the same. So then the working class will be on the same basis as the people who are already rich.

How is the idea seen in the United States?

Well, a lot has changed in the last few years. Ten years ago charging more taxes from very wealthy people was a crazy left-wing idea. Now, President Joe Biden has embraced part of our agenda. He has called for a tax on what we call unrealized capital gains, which are essentially profits made from the rise in investments. So, this idea has transitioned from the far left to the White House.

Well, we are asking President Biden and the United States Secretary of the Treasury, Janet Yellen, to support President Lula’s proposal at the G20 meeting. We believe that what President Lula proposed is essentially the same thing President Biden wants. But I still can’t see consensus inside the administration, or even inside the United States Government.

Do you think that in the future all this debate can bear fruit?

I am an optimistic person; I chose to see the glass half full. I have seen a lot of progress lately. And yes, things go up and down and every election is the most important of our lives and the whole world can change each year. Wars break out and governments come and go. But in the long run, we are making progress.

Are going to be successful this year in Brazil? I don’t know. But we could certainly manage an agreement to establish a minimum tax, some baseline, for the wealthiest people in the world, as President Lula proposed. So I am optimistic, I believe we will be able to see some success after the G20 meeting in Rio de Janeiro. I am working to make sure that my United States government staff, at least, can support the Brazilian initiative for international taxation, and this can make a great difference.

Here in the United States, at Patriotic Millionaires, we realize that this is a global issue that requires a global solution. And President Lula managed to secure the support of a few other countries, I believe France, Spain, and South Africa. But I believe there certainly are opportunities to bring more nations to our side. Because we cannot let some people get so rich and hold so much political power to the point where they can exert undue influence over governments thus changing the rules and becoming even more rich. This is why we are trying to ensure to billions of people that they, too, will be treated fairly, and we hope to attract even more people to join us and advocate for this proposal of charging more taxes from the super-rich.

See also