Politics

Economy shouldn't have to rely on charity from billionaires, says Biden backer Pete Buttigieg

Key Points
  • Biden supporter Pete Buttigieg told CNBC on Thursday the U.S. economy should not have to rely as much on charitable contributions from billionaires. 
  • "It's wonderful when there are these major commitments, generous commitments by individuals, but we've also got to ask how things got so unequal in the first place," Buttigieg said.
  • "If we had higher wages and more public investment, we wouldn't need to lean on philanthropy quite as much as we do," added the former Democratic presidential candidate.
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Pete Buttigieg: U.S. economy should rely less on charity from billionaires

The United States should not have to rely as much on charitable contributions from billionaires to help solve the nation's economic challenges, Biden campaign surrogate Pete Buttigieg told CNBC on Thursday.

"It's wonderful when there are these major commitments, generous commitments by individuals, but we've also got to ask how things got so unequal in the first place," the former Democratic presidential candidate said on "Squawk Box."

Buttigieg's remarks came in response to a question about whether to tax charitable contributions such as the one that multibillionaire Warren Buffett just announced. The "Oracle of Omaha" on Wednesday said he would donate nearly $3 billion worth of Berkshire Hathaway stock. As of Wednesday's market close, Buffett ranked No. 4 on Forbes' list of the richest people in the world with an estimated net-worth of $67.6 billion.

Buffett has said he will give away nearly all of his fortune, with most of it going to a handful of philanthropic organizations including the Bill and Melinda Gates Foundation and charities run by his three children. Since 2006, he has donated more than $37 billion, including the latest contribution.

Instead of taxing philanthropy, Buttigieg said it would make more sense for the U.S. to have a more equitable tax structure on the "front end." That way, he said, the tax revenue would support programs and other efforts that reduce inequality that have more input from voters.

"If a little bit more of that was making its way into a democratically guided process, in other words the kind of research and development that invent trillion dollar ideas like the internet itself and space travel, we know our country is better off," said Buttigieg, the former two-term mayor of South Bend, Indiana. "We've got to ask where the balance is." 

For example, Buttigieg referenced a report last year that found a full-time worker earning the federal minimum wage of $7.25 per hour is unable to pay for an affordable two-bedroom apartment anywhere in the U.S. However, some states and localities have higher minimum wages than the federal rate, which has remained the same for about a decade

"I would argue that if that weren't the case, if we had higher wages and more public investment, we wouldn't need to lean on philanthropy quite as much as we do," Buttigieg said. 

Buttigieg, who won the most delegates in February's Iowa caucus and finished second in the New Hampshire primary, ended his unlikely presidential bid on March 1, one day after Joe Biden's crucial victory in South Carolina.

Buttigieg endorsed the former vice president shortly after leaving the race. 

On Thursday, Biden released an economic plan that proposes investments in American manufacturing. It calls for a $400 billion, four-year increase in government purchasing of U.S.-based goods and services, along with another $300 billion on research and development in technology. The Biden plan also touts the candidate's long-standing promises to strengthen workers' collective bargaining rights and to roll back part of the tax cuts passed by President Donald Trump

Buttigieg said the U.S. economy needs that kind of spending to help it recover from the impact of the coronavirus crisis, which has put millions of American residents out of work. While saying he's attentive to concerns about government deficits, Buttigieg said investment plans like Biden's have shown to have a "much higher rate of return than tax cuts." 

"If you look at the overall picture of where our economy is headed, we don't have a choice and we can handle these kinds of investments if we make them before it's too late," Buttigieg said.

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