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Rich Folks Reach Across the Gap
By Miriam Davidson
Date: 04-05-99
With complaints about the inequities of our tax system filling the air, it's instructive to learn of an effort to level the playing field. The move comes from an unlikely quarter: a group of citizens whose wealth puts them in the top five percent of Americans. PNS correspondent Miriam Davidson is a Tucson-based writer working on a series of profiles of the members of Responsible Wealth.
Bob Burnett never expected to be rich. A software designer, Burnett worked for a number of companies before becoming vice president of engineering at Cisco Systems in 1988. Four years later, Burnett left Cisco -- the company that built the Internet -- with several million dollars in stock options. He wanted to see what good his money could do.
Burnett and his wife took up a number of volunteer and charity activities near their Berkeley, California home, including dropout prevention and job training. Lately, Burnett, 58, has been teaching nonprofits and even cash-strapped municipal governments to prepare for Y2K.
Yet Burnett is still bothered by the persistent gap between rich and poor in our society. He wonders whether the individual generosity of wealthy people really can level the playing field. The evidence seems to be that it cannot.
Since 1979, the highest income groups have seen their assets double, while the middle class has stayed the same and the poor have lost ground. The top 1 percent now controls 40 percent of the nation's wealth, twice what it did 20 years ago. The booming stock market has created a great deal of new wealth, but almost all of it has gone to the already well off.
A lot of rich people are concerned about the increasing divide, which is threatening to turn America into a two-tier society. Most respond the traditional way -- through philanthropy. Charitable giving is up among the wealthy, according to the Social Welfare Research Institute at Boston College. There's also a growing philanthropy industry -- not only foundations and nonprofits, but counselors and support groups that teach people to find meaning in giving.
Giving away money is a beautiful thing. But as Bob Burnett discovered, it has its limitations. It is by nature personal, idiosyncratic, and scatter-shot. It cannot solve social problems, nor should it be expected to take over basic government functions. Most wealthy people agree on this. "I do not give money to buy clothes and food for individuals," said one donor in Harvard sociologist Francie Ostrower's book, "Why the Wealthy Give." "My tax money goes for that. That's a government responsibility."
This is where a new group called Responsible Wealth comes in. This is a Boston-based coalition of wealthy people, all among the top 5 percent of Americans (more than $650,000 in assets), who hope to lead their peers in a discussion about income inequality and then forge a national consensus about what to do about it. "Our first task is to talk to other wealthy people and find issues we can agree on," says Burnett, who is co-chair.
Responsible Wealth's 400 members come from diverse backgrounds and have a variety of points of view. What they have in common is the conviction that wealthy people should take the lead in promoting fairness and equality in both the public and private spheres.
Members are putting their money where their mouths are. Some have invested in socially responsible business. Others who own businesses have pledged to pay all their employees a living wage.
Responsible Wealth is also taking a stand against excessive CEO salaries. This spring, stock owning members are co-sponsoring shareholder resolutions at Allied Signal, Citigroup, General Electric and other corporations calling for a cap on CEO pay or limiting the ratio between highest and lowest paid workers. None have much chance of passing, but Responsible Wealth plans to keep pushing the issue.
Responsible Wealth's most controversial position is in the area of taxes. Last year, more than 100 members returned to the U.S. Treasury or gave to charity the $1.2 million they received from the 1997 capital gains tax cut, and they plan to do so again this April 15. Although largely symbolic, the tax protest underscore the group's belief that capital gains should be taxed at the same or higher rate as income and that wealthy people are generally under taxed in our society, especially in comparison to other industrial democracies.
Brunet acknowledges that Responsible Wealth has a way to go before its goal of lessening economic inequality is realized "This is the great national problem nobody talks about," he says. Yet with baby boomers slated to inherit some $10.4 trillion in assets over the next 40 years, maybe it's time to begin talking.
"One day," Burnett says, "our movement could parallel the civil rights movements of the 20th century."
There's a paradox at the core of a group that uses privilege to fight privilege, and that may mean the influence of Responsible Wealth will never be that strong. On the other hand, if anyone has the power to change things, they do.

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