Her fortune came from Hyatt hotels; his came from the Erie Canal. Now, they want the government to tax their millions to fund coronavirus relief.
- Impact investors
Liesel PritzkerSimmons and Ian Simmonsare leading the charge for a national wealth tax, despite being multimillionaires themselves.
- Calls for a tax on the 1% are rising as the
coronaviruspandemic exacerbates America's already widening wealth gap.
- The Simmonses believe such a tax could help fund improvements to everything from education to infrastructure, but some economists have expressed doubts about how feasible a wealth tax is in the United States.
When couples discuss money over the kitchen table, the conversation is often focused on how to spend less of it, not more.
And when they do plot how to spend more of it, it's not often on taxes. But that's exactly the conversation that impact investors Liesel Pritzker Simmons and Ian Simmons found themselves having in their Boston home last spring after their preferred presidential candidate, Massachusetts Sen. Elizabeth Warren announced her Ultra-Millionaire Tax.And despite being ultra-millionaires themselves, the Simmonses were all for it. Both were born into dynastic families that passed on multimillion-dollar fortunes. His family built the locks on the Erie Canal; hers, the Hyatt hotel empire.Advertisement
The couple sat down with Business Insider to discuss their public crusade for a wealth tax, and why they think the pandemic has made it more important than ever.
The coronavirus upped tensions between the rich and the poor
The novel coronavirus has not only taken the lives of nearly 200,000 Americans, but it has also annihilated government budgets at all levels, from local to federal.The United States alone has spent more than $6 trillion on health care and economic stimulus throughout the crisis, leading to a projected $3.8 trillion budget deficit in 2020, according to an April report from nonpartisan think tank Committee for a Responsible Federal Budget. At the same time, socio-economic tensions grew to a fever pitch as
The result is a fresh debate about a national wealth tax.Multimillionaires like Abigail Disney and politicians like Congresswoman Alexandra Ocasio-Cortez have called for a new tax on the fortunes of the country's richest people to cover the spiraling costs of the coronavirus pandemic. Sen. Bernie Sanders introduced a fresh tax plan to take advantage of the "obscene wealth gains" of billionaires during the pandemic. And in July, hundreds of New Yorkers marched through the Hamptons holding pitchforks twice in one month to after Gov. Andrew Cuomo shot down proposals for a state wealth tax.Advertisement
Millionaire wealth tax evangelists like the Simmonses predicted the inter-class strife, even down to the pitchforks. Ahead of the exclusive gathering of billionaires and heads of state at a Swiss ski resort every January known as Davos, a group of 169 millionaires calling themselves "Millionaires Against Pitchforks" cosigned a letter to their peers asking them to back a wealth-specific tax hike, for fear of class warfare.
A wealth tax helps multimillionaires, too
Though Ian Simmons did not participate in that letter, he echoed the sentiment."This is not a policy I've been advocating for out of altruism," Simmons told Business Insider. " We're advocating for this policy because we think it's the smartest one in the country for the longterm and the smart one for future generations of our family."Advertisement
According to Pritzker Simmons, "Millionaires Against Pitchforks" might not have needed to draft an open letter to get other ultrawealthy people on board. She described being "pleasantly surprised" by how their network responded when they coauthored their own headline-grabbing open letter with the likes of Abigail Disney and George Soros in June 2019.
Buy-in amongst the 1% has also become a question in New York's wealth tax debate. Gov. Andrew Cuomo dismissed calls to implement a wealth tax to cover the state's coronavirus shortfall in place of previously announced sweeping cuts to school and hospital budgets because of the immense cost of coronavirus relief efforts.The governor argued that any such tax would scare away the state's members of the three comma club and their much-needed tax revenue.Advertisement
'We're all in this together'The pandemic has made it impossible for the ultrawealthy to ignore America's ever-widening wealth gap, Pritzker Simmons said, recalling the waiting for the elementary school where she planned to send the couple's five-year-old to kindergarten this fall to release its reopening plan in early August.
"Our public elementary school is more likely to open than ones in other parts of Massachusetts because the class sizes are smaller, the building and the facilities are larger, and that's because of the property taxes here," Pritzker Simmons said. "We know how stratified education is from data like spending per student and things, but this is literally [a question of] are the doors going to open or not? These are the kinds of things that maybe a wealth tax could help to redistribute."Proponents of such a tax, like Warren-affiliated UC Berkeley economists Emmanuel Saez and Gabriel Zucman, say even a moderate tax could raise $3.75 trillion that could be used to fund environmental initiatives, fuel economic investment, and reduce the cost of health care in a decade. Other economists and tax experts have told Business Insider that such a tax faces such steep legal, logistical, and political challenges that it could never be implemented in time to cover the coronavirus shortfall.Advertisement
But despite the headwinds, the Simmonses believe a more progressive tax system is still worth fighting for."If this pandemic has taught us anything, it's that we are all in this together," Pritzker Simmons said, "and when the whole country is hurting, everybody is hurting. And so if there's a way that we could help generate more revenue for the country to reinvest back in society more broadly, then that's something that we want to be a part of."
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