Marlene Engelhorn at a Millionaires for Humanity event in Amsterdam in late August, where activists were calling for wealth to be taxed. The inflatable next to her is meant to represent “the elephant in the room” of tax justice. Photo / Mashid Mohadjerin, The New York Times
Marlene Engelhorn, 30, heir to a fortune, isn’t interested in philanthropy, believing it only perpetuates existing power dynamics. She’s calling for structural change to how the ultrarich are taxed.
By the time her extraordinarily wealthy grandmother died last month, Marlene Engelhorn already knew whom she wanted to be the ultimate beneficiary of the enormous inheritance coming her way: the tax man.
“The dream scenario is I get taxed,” said Engelhorn, co-founder of a group called Tax Me Now.
Engelhorn, a 30-year-old who grew up in Vienna, is part of a growing movement of young, leftist millionaires who say they want governments to take a much larger share of their inherited wealth, arguing that these unearned fortunes should be democratically allocated by the state.
For more than a year, Engelhorn has been campaigning for tax policies that would redistribute her eight-figure windfall — and anyone else’s.
“I am the product of an unequal society,” Engelhorn said in a speech at a Millionaires for Humanity event in late August in Amsterdam, where activists were calling for wealth taxation. “Because otherwise, I couldn’t be born into multimillions. Just born. Nothing else.”
Her family is no stranger to giving away huge sums. Her grandparents poured a chunk of their fortune into supporting young scientists. Her great-uncle gave millions to an archaeology centre. His cousin pledged nearly US$140 million ($245 million) to classical music.
But in Engelhorn’s view, it shouldn’t be the wealthy who get to decide which personal interests and passions deserve their inherited millions.
“There’s no need for another foundation,” she said as she sat by a canal in Amsterdam and ate a loaf of bread she had brought in her backpack. “What’s really needed is structural change.”
Philanthropy to her only replicates the same power dynamics that have created the systemic inequalities she wants to see dismantled, with new tax policies for the super rich an essential aspect of that vision.
The Engelhorn family’s multibillion-dollar fortune originated with Friedrich Engelhorn, who about 150 years ago in Germany founded BASF, one of the world’s largest chemical companies. Another family company, Boehringer Mannheim, which produced pharmaceuticals and medical diagnostic equipment, was sold to Roche for US$11 billion in 1997.
As a partial heir to that fortune, Engelhorn grew up in a mansion in a chic part of Vienna. She attended French-language schools, describing herself as the sort of student who was “correcting grammar mistakes when I heard them.” She played soccer with boys and read voraciously. She said she lacked any awareness of class privilege.
When she saw friends living in small apartments, she wondered why they did not choose to live in a big house with a garden, which is “much nicer.”
“Privilege really gives you a very, very narrow view of the world,” she said.
At university in Vienna, Engelhorn’s perspective began to broaden.
She volunteered with gay-rights groups and grew interested in the interconnection of racial, gender and economic discrimination.
In early 2020, as Engelhorn sat in a cafe in Switzerland, where she had gone to see her grandmother on her 93rd birthday, an accountant told her that upon her grandmother’s death, she would inherit many millions of euros.
He told her to enjoy herself. “He said, ‘This is just to be spent,’” Engelhorn recalled. “Like, ‘Just go play.’”
But to her, the news was more disconcerting than a cause for joy, spurring a tormented reckoning about her place in society.
“I was part of the problem,” she said she remembered thinking. “I am very woke and all, but now: What do I do with all these pretty thoughts?”
As she looked for advice, she entered the orbit of groups of pro-tax millionaires, whose members meet in person or on video calls to discuss their privileges — and how to get the state to strip them away.
Some of the members call the groups, which include Resource Generation and Patriotic Millionaires, a “safe space” where they can open up about what they call the “money story” — an honest account of the real origins of their social status. They acknowledge the crimes often at the heart of their family’s wealth and analyze the sexist and racist components that might have contributed to it.
Perhaps most importantly, the members are expected to share how they are engaged in what they typically term “reparations” to society.
Some of these groups emerged in the past 20 years or so, but recently, their memberships have expanded, driven by what Engelhorn calls “next gens of wealth” who have a different approach than many of their parents. Instead of trying to give away part of their inheritance, they are now asking how it’s possible they inherited so much to begin with.
Newspapers have mocked some of the language of these groups, calling it sententious and self-reverential, and Engelhorn complained that some scornful press ridiculed them as “rich kids clubs.”
She credits the groups for helping her realize what could be done differently about wealth redistribution. If she hadn’t encountered them, she said, “I might have also just settled with the status quo.”
Which is easy to do, she noted, “when you can literally afford not to care.”
Some experts outside the millionaire circle have also found the work of these groups helpful.
“I’m really grateful for their voice,” said Amy Hanauer, executive director at Institute on Taxation and Economic Policy, a think tank in Washington, who said that millionaires can be influential higher tax advocates.
After joining several of these groups, Engelhorn last year co-founded another one for Central Europe, Tax Me Now, described on its website as “an initiative of wealthy people who are actively committed to tax justice.”
Its policy goal is to implement or to increase inheritance and wealth taxes (Austria, where Engelhorn lives, abolished its inheritance tax in 2008).
The number of nations in the Organisation for Economic Cooperation and Development that taxed net wealth dropped from 12 in 1990 to five in 2020. While a higher number of OECD countries tax inheritances, the amount collected accounts for 0.5 per cent of all taxes there.
With less money held by the top 1 per cent, Europe is less unequal than the United States. But in Europe, family fortunes and old money are more prevalent, with wealth, connections and even occupations passed down through generations. More than half of European billionaires inherited their fortunes, while in the United States, one-third did, according to a study by the Peterson Institute for International Economics.
To Engelhorn, the current tax laws mean that it isn’t just huge amounts of wealth that are handed down; it’s power, too, being distributed in a dynastic way. Taxing wealth, she said, would serve the dual purpose of increasing public resources and taking away political sway from people who have not democratically earned it.
“I don’t think that I should be in power or in charge the way that I could be if I use my wealth accordingly,” she said.
After her speech in Amsterdam, Engelhorn was given an award for her activism.
“Of all the rich people” who had spoken at the event, Engelhorn was the one who spoke about the issue of taxation with the greatest passion and honesty, according to Djaffar Shalchi, founder of Millionaires for Humanity. “She is for me No. 1,” he said.
Engelhorn rejected the praise of how she speaks about tax issues. “I am not even an expert,” she said. “I am really just rich.”
Whatever her speaking abilities, she has helped generate interest in the issues of wealth and inheritance taxes. This fall, she published her first book, “Geld,” or “Money,” about wealth redistribution. And ever since her first public declaration of her desire for her inheritance to be taxed away, she has attracted steady attention in German-language media.
It is not the first time a member of Engelhorn’s family has made headlines with tax-related issues. When her great-uncle and archaeology donor Curt Engelhorn sold Boehringer Mannheim, German tax authorities didn’t collect a dime because he had previously moved the company’s legal seat abroad.
Marlene Engelhorn’s multiple radio and TV appearances have resulted in dozens of people reaching out to ask her directly for financial help. She said it wrecks her to say no, but she believes it should not be on her to decide who gets her money.
“I would like tax justice to take this impossible decision off my hands,” she said.
She has committed to giving away at least 90% of her inheritance and wants it to go to the state — but only in the form of a tax, not a donation. “A government who won’t use wealth taxes won’t get a gift just like that,” she said.
Not all millionaires share her passion for taxing wealth.
Ansgar John Brenninkmeijer, heir to a fashion fortune, interrupted Engelhorn when she was onstage in Amsterdam to ask her angrily if she knew what the wealth tax in the Netherlands was.
“We do have a wealth tax,” he said. “It’s 1.6 per cent,” he added, referring to a Dutch tax on the value of a person’s savings and investments.
To Engelhorn, that was a ridiculously low number.
But later that day, she said it shouldn’t be up to people like Brenninkmeijer — or herself — to say what’s a fair rate.
“It’s not a rich kid’s place to say,” she said, “what the tax should be.”
This article originally appeared in The New York Times.
Written by: Emma Bubola
Photographs by: Mashid Mohadjerin
©2022 THE NEW YORK TIMES
The council has also been served with judicial review proceedings.