You pay a higher percentage of your net worth in taxes than most billionaires do. This Danish millionaire wants that to change.

You pay a higher percentage of your net worth in taxes than most billionaires do. This Danish millionaire wants that to change.

  • Paul Constant is a writer at Civic Ventures and cohost of the “Pitchfork Economics” podcast with Nick Hanauer and David Goldstein.
  • In the latest episode, they spoke with Danish entrepreneur Djaffar Shalchi about why taxing the wealthy benefits everyone.
  • “We don’t leave anybody behind in Denmark,” says Shalchi. “I don’t see people sleeping in the streets like I see in many other countries.”
  • See more stories on Insider’s business page.

Earlier this week, ProPublica published a stunning exclusive report documenting how billionaires like Elon Musk, Michael Bloomberg, and Jeff Bezos pay very little — sometimes even nothing — in income taxes. 

Based on a

cache
of confidential IRS documents, the ProPublica report found that the nation’s 25 richest Americans “saw their worth rise a collective $401 billion from 2014 to 2018,” but in that same time they “paid a total of $13.6 billion in federal income taxes in those five years,” a total that “amounts to a true tax rate of only 3.4%.”

The fact is, you pay a much higher percentage of your net worth than billionaires do. And none of the findings in the ProPublica report are illegal — in fact, it’s how the system is supposed to work. Our broken tax policy has created some of the wealthiest corporations in the history of the world and helped to divert $50 trillion away from the paychecks of working Americans and toward a handful of wealthy people. 

How raising taxes on the uber-rich would benefit the average American 

If Elon Musk paid the same percentage in taxes as the average American, his day-to-day life wouldn’t change at all. He’d still be able to fly on his private jet to any of his homes whenever he chooses, terrestrial or otherwise. He’d vacation in the same spots, eat the same food, enjoy the same fame, and enjoy the same status that he enjoys right now. 

But if all the Elon Musks who right now pay very little (or even nothing) in taxes were held to the same standards as average Americans, your life would improve in uncountable ways. The government could provide affordable childcare for every parent, allowing people more freedom to join the workforce. Our infrastructure could again be the envy of the world, rather than a slowly unfolding disaster movie. The social safety net would allow Americans the security to start small businesses, take bold career risks, and establish better lives for their children.

But greed is a hell of a drug, and many rich Americans fund anti-tax politicians and campaigns that ensure they pay as little as possible every April 15th. Only a few select “class traitors,” including Abigail Disney and Nick Hanauer, actively argue that rich Americans should be taxed more. 

In the latest episode of Hanauer’s podcast, “Pitchfork Economics,” millionaire Danish entrepreneur Djaffar Shalchi discussed why he’s an advocate for wealth taxes.

“I was born in 1961 in Tehran, Iran,” Shalchi said. When he was eight, Shalchi’s mother brought him and his four siblings to Europe in the hopes of a better life. Soon, he says, they settled “in one of the most beautiful places on this planet: Copenhagen, where we have what we call the welfare system.”

Shalchi’s mother told her children that in Denmark, “you can do whatever you want to do,” because of the free education, social support benefits, and health care provided by that welfare system. He took his mother at her word, studying to become a building engineer and starting his own real estate development business. “We really have the American dream in Scandinavia,” Shalchi laughed.

The reality of ‘self-made’ millionaires

While Shalchi acknowledges that he “worked hard” to build his company into a global leader, he admits to scoffing when he hears rich people describe themselves as “self-made.” 

“Nobody is self-made,” Shalchi said. “Everybody is directed by society, their friends, and so on.” The Danish welfare system provides the security for smart people like Shalchi to become wealthy.

As a millionaire many times over, Shalchi has a very high tax bill. “I pay more than 50%” of his annual earnings to Denmark in an average year, he admits, and depending on how good a year he’s had, “I can go as high as something like 70%.”

But while wealthy Americans love to complain about taxes, Shalchi knows that he gets great value in return for what he pays. In Denmark, “I don’t see people sleeping in the streets like I see in many other countries,” he said. “We don’t leave anybody behind in Denmark. Everybody can make a pretty decent living. And we have security, which is extremely important for everybody.”

Why high-tax Scandinavian countries rank high in happiness

When people don’t have to worry about basic health care, education, or where their next meal is coming from, life changes from a zero-sum game to something to be enjoyed. 

“That’s why we are always among the top 10 in the world when happiness reports come out every year,” Shalchi said. High-tax Scandinavian countries are always competing with each other to top the UN’s annual Happiness Report, while America tends to stagnate in the mid-to-high teens.

So what kind of tax structure would we need to build a happier, more equitable America? 

“If we raised taxes on all income to 45%, reinstated some reasonable corporate tax rates, and closed all the international loopholes,” Hanauer estimated, in conjunction with better wages and protections for ordinary workers, 90% of the worst problems that have plagued America over the last 40 years “would melt away.”

“By reinstating some corporate taxes and reinstating some taxes on wealthy people, you could absolutely pay for, for instance, the American Family Plan that the Biden administration is proposing,” Hanauer said. That would combat poverty, drastically reduce childcare costs, and make community college free for all. 

Rather than spending ridiculous sums of money to be sheltered from extreme poverty, crime, and public health failures, the wealthiest Americans could simply pay the same in taxes as the average American family. Doing so, Hanauer says, would “improve the lived experience for every American,” including the ultra-rich. 

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