December 17, 2006
What Should a Billionaire Give – and What Should You?
By PETER SINGER
What is a human life worth? You may not want to put a price tag on a it. But if we really had to, most of us would agree that the value of a human life would be in the millions. Consistent with the foundations of our democracy and our frequently professed belief in the inherent dignity of human beings, we would also agree that all humans are created equal, at least to the extent of denying that differences of sex, ethnicity, nationality and place of residence change the value of a human life.
With Christmas approaching, and Americans writing checks to their favorite charities, it’s a good time to ask how these two beliefs — that a human life, if it can be priced at all, is worth millions, and that the factors I have mentioned do not alter the value of a human life — square with our actions. Perhaps this year such questions lurk beneath the surface of more family discussions than usual, for it has been an extraordinary year for philanthropy, especially philanthropy to fight global poverty...
Philosophers like Liam Murphy of New York University and my colleague Kwame Anthony Appiah at Princeton contend that our obligations are limited to carrying our fair share of the burden of relieving global poverty. They would have us calculate how much would be required to ensure that the world’s poorest people have a chance at a decent life, and then divide this sum among the affluent. That would give us each an amount to donate, and having given that, we would have fulfilled our obligations to the poor.
What might that fair amount be? One way of calculating it would be to take as our target, at least for the next nine years, the Millennium Development Goals, set by the United Nations Millennium Summit in 2000. On that occasion, the largest gathering of world leaders in history jointly pledged to meet, by 2015, a list of goals that include:
Reducing by half the proportion of the world’s people in extreme poverty (defined as living on less than the purchasing-power equivalent of one U.S. dollar per day).
Reducing by half the proportion of people who suffer from hunger.
Ensuring that children everywhere are able to take a full course of primary schooling.
Ending sex disparity in education.
Reducing by two-thirds the mortality rate among children under 5.
Reducing by three-quarters the rate of maternal mortality.
Halting and beginning to reverse the spread of H.I.V./AIDS and halting and beginning to reduce the incidence of malaria and other major diseases.
Reducing by half the proportion of people without sustainable access to safe drinking water.
Last year a United Nations task force, led by the Columbia University economist Jeffrey Sachs, estimated the annual cost of meeting these goals to be $121 billion in 2006, rising to $189 billion by 2015. When we take account of existing official development aid promises, the additional amount needed each year to meet the goals is only $48 billion for 2006 and $74 billion for 2015.
Now let’s look at the incomes of America’s rich and superrich, and ask how much they could reasonably give. The task is made easier by statistics recently provided by Thomas Piketty and Emmanuel Saez, economists at the École Normale Supérieure, Paris-Jourdan, and the University of California, Berkeley, respectively, based on U.S. tax data for 2004. Their figures are for pretax income, excluding income from capital gains, which for the very rich are nearly always substantial. For simplicity I have rounded the figures, generally downward. Note too that the numbers refer to “tax units,” that is, in many cases, families rather than individuals.
Piketty and Saez’s top bracket comprises 0.01 percent of U.S. taxpayers. There are 14,400 of them, earning an average of $12,775,000, with total earnings of $184 billion. The minimum annual income in this group is more than $5 million, so it seems reasonable to suppose that they could, without much hardship, give away a third of their annual income, an average of $4.3 million each, for a total of around $61 billion. That would still leave each of them with an annual income of at least $3.3 million.
Next comes the rest of the top 0.1 percent (excluding the category just described, as I shall do henceforth). There are 129,600 in this group, with an average income of just over $2 million and a minimum income of $1.1 million. If they were each to give a quarter of their income, that would yield about $65 billion, and leave each of them with at least $846,000 annually.
The top 0.5 percent consists of 575,900 taxpayers, with an average income of $623,000 and a minimum of $407,000. If they were to give one-fifth of their income, they would still have at least $325,000 each, and they would be giving a total of $72 billion.
Coming down to the level of those in the top 1 percent, we find 719,900 taxpayers with an average income of $327,000 and a minimum of $276,000. They could comfortably afford to give 15 percent of their income. That would yield $35 billion and leave them with at least $234,000.
Finally, the remainder of the nation’s top 10 percent earn at least $92,000 annually, with an average of $132,000. There are nearly 13 million in this group. If they gave the traditional tithe — 10 percent of their income, or an average of $13,200 each — this would yield about $171 billion and leave them a minimum of $83,000.
You could spend a long time debating whether the fractions of income I have suggested for donation constitute the fairest possible scheme. Perhaps the sliding scale should be steeper, so that the superrich give more and the merely comfortable give less. And it could be extended beyond the Top 10 percent of American families, so that everyone able to afford more than the basic necessities of life gives something, even if it is as little as 1 percent. Be that as it may, the remarkable thing about these calculations is that a scale of donations that is unlikely to impose significant hardship on anyone yields a total of $404 billion — from just 10 percent of American families.
Obviously, the rich in other nations should share the burden of relieving global poverty. The U.S. is responsible for 36 percent of the gross domestic product of all Organization for Economic Cooperation and Developmentnations. Arguably, because the U.S. is richer than all other major nations, and its wealth is more unevenly distributed than wealth in almost any other industrialized country, the rich in the U.S. should contribute more than 36 percent of total global donations. So somewhat more than 36 percent of all aid to relieve global poverty should come from the U.S. For simplicity, let’s take half as a fair share for the U.S. On that basis, extending the scheme I have suggested worldwide would provide $808 billion annually for development aid. That’s more than six times what the task force chaired by Sachs estimated would be required for 2006 in order to be on track to meet the Millennium Development Goals, and more than 16 times the shortfall between that sum and existing official development aid commitments....