The gospel of wealth according to Marc Benioff
In the run upto the next US presidential elections, it is inevitable that the topic of taxing the rich will be front and centre of the debate with candidates such as Elizabeth Warren actually putting out a clear plan – The Ultra-millionnaire tax. The topic touches upon the role of the wealthy and big corporates in attacking inequality.
“…Under Ronald Reagan, the top marginal tax rates were slashed from 70 percent to 50 percent. And the top rates have fallen further over time. As the richest accumulated more wealth, as unions lost power and wages stagnated, the nation’s wealth disparity has only grown. Today the country’s three richest billionaires hold the same wealth as more than half the nation’s population. As the collective wealth of the world’s poorest 3.8 billion people fell by 11 percent in 2018, billionaire fortunes increased by 12 percent, according to Oxfam. Consider Benioff: Between 2017 and 2018, his net worth rose by $2.47 million a day, according to Business Insider. Meanwhile, recent Federal Reserve data revealed that tens of millions of Americans would be unable to cover a $400 emergency expense.
Marc Benioff, the iconoclastic founder and CEO of Salesforce.com is known for being vocal on how business needs to go beyond catering to shareholders – what he calls compassionate capitalism and has indeed demonstrated it through action. This piece in the Wired talks about how Benioff has used his position in industry and not just wealth to become an influencer of policy notably Prop C, the San Francisco City’s plan to address the growing problem of homelessness in the city.
“The Homelessness Gross Receipts Tax Ordinance, or Proposition C, sought to stem the city’s spiraling homelessness problem by raising taxes by an average of half a percent on big companies—tech ones, most prominently. Doing so would bring in up to an estimated $300 million a year for various initiatives, from new beds in shelters to expanded mental health services. In the way certain votes do, Prop. C struck many as a referendum on good versus evil: not just a means of addressing San Francisco’s housing emergency but a shot across the bow of the booming industry that was partly responsible for it, and perhaps across capitalism-as-usual.
Enter Marc Benioff, founder and co-CEO of Salesforce, the city’s largest employer. Declaring that “our city is in a crisis,” he threw his full support behind the measure that promised to take his company’s money. He publicly outflanked the city’s ostensibly liberal mayor, London Breed—who opposed it on grounds that the measure didn’t allow for enough accountability—and pledged upward of $2 million to the Prop. C campaign. But it was on Twitter that Benioff truly went to town. “As SF’s largest employer we recognize we are part of the solution,” he declared on October 9.
Chief among Benioff’s distinguishing characteristics, though, is his incessant public munificence, emphasis on incessant, emphasis on public.
Scarcely a month goes by without another grant, another ribbon-cutting, another broadside against complacent CEOs. He and Lynne gave $250 million to build UCSF Benioff Children’s Hospitals in San Francisco and Oakland. Between 2017 and 2019, Salesforce and the Salesforce Foundation gave away about $130 million, and the Benioffs personally donated nearly $200 million in roughly the same time period. Via large individual and company donations, a philanthropy-centric business model, and a general irrepressibility on social issues, Benioff has set his sights over the years on homelessness, oceans, public schools, local hospitals, LGBTQ+ rights, the gender pay gap, and the country’s gun crisis. Forbes referred to him as “San Francisco’s Giant of Generosity.” To The Silicon Review he’s “the intrepid tech visionary who pioneered a groundbreaking philanthropic model.” Pando went so far as to call him “a people’s billionaire.”
Integral to Benioff’s reputation for goodness is the insistent badness regularly displayed by his ultrarich brethren. Benioff does not offer the Russians a handy platform for derailing our democracy or erode civil discourse 280 characters at a time. He doesn’t use his wealth to undermine public education or fund climate change denial. He does not accuse British rescue divers of pedophilia. At a moment when his plutocrat peers seem increasingly hell-bent on mucking everything up, Benioff has carved out a different brand altogether: the good billionaire”
The author shows nothing so radical comes without its fair share of controversies and criticisms. Chris Colin brings out the fact Salesforce’s own federal tax rates are abysmally low suggesting why Benioff may not be practising exactly what he preaches.
“Prop. C taxes certain sectors differently than others, making it more burdensome to, say, a fintech company like Square, which would have to pay twice as much tax as Salesforce, despite bringing in a fraction of its revenue. But more important is the part Benioff never mentions: the zero dollars his company paid in federal income tax that year, according to the Institute on Taxation and Economic Policy. “This is a company that had $7.8 billion in gross profit in 2018 and didn’t pay a dime in federal income tax,” Frank Clemente, executive director of Americans for Tax Fairness, told me, before running through the assorted mechanisms used by the country’s corporations to avoid contributions to the federal treasury: patents held by foreign subsidiaries. The so-called stock options loophole, which allows companies to lower their taxable income by paying executives in stock options. Offshore accounts. (As of 2017, Salesforce had 14 tax haven subsidiaries, in Hong Kong, Luxembourg, Singapore, the Netherlands, Switzerland, and Ireland, according to a report from the advocacy group US PIRG and ITEP.)”