João Paulo Pacifico, millionaire: ‘Replacing taxes with philanthropy is the privatization of common well-being’

The Brazilian – among the 250 richest people in the world – is the only millionaire in Latin America who is demanding that governments raise taxes, so as to prevent the hoarding of wealth and the deepening of inequality

João Paulo Pacifico
João Paulo Pacifico at his office in São Paulo, Brazil.Lela Beltrão
Naiara Galarraga Gortázar

João Paulo Pacifico, 46, is uncomfortable talking about money.

The only Latin American millionaire who has signed the Proud to Pay More manifesto, he considers himself to be an activist, rather than just another member of the ultra-rich class. The document has been signed by 250 people who demand that their governments tax their assets more.

Pacifico, heiress Abigail Disney, or Brian Cox from Succession are among the high-profile figures who argue that the status quo surrounding taxation is exacerbating economic inequality, a harmful phenomenon that threatens democracy.

During his interview with EL PAÍS, the Brazilian deploys such a harsh discourse against the most sacred aspects of capitalism that it’s almost surprising that he ended up building such a successful career in that world. The interview was conducted at the headquarters of the Gaia Group, which he founded. The group invests in social housing or cooperatives led by the Landless Workers’ Movement (MST).

Pacifico — perched at the top of Brazil’s Wall Street — is the father of two daughters and the husband of a judge. He has sold off the traditional part of his business, donating hundreds of millions of dollars to the NGO that he participates in. The founder of Patagonia has engaged in something similar.

Question. Are you super-rich from birth, or did you build your own fortune?

Answer. I don’t know what “super-rich” means. I donated a lot of money, which wasn’t inherited. I grew up with the privileges of a middle-class person in Brazil. I went to a private school and a private university. I grew up without luxuries.

Q. In your childhood, what did you want to be when you grew up?

A. I wanted to be an athlete, I was dedicated to swimming.

Q. Why did you decide to join the call to raise taxes that was presented in Davos?

A. Taxes are one of the ways to achieve social justice. Perhaps the most important way, but not the only one. The most important thing I did was sell a company I founded and give up a lot of the money from this sale. I donated a lot of cash… not company stock, but real money.

Q. How much?

A. I prefer that you don’t write that…

Q. Without figures, it’s difficult to talk about fortunes and taxes.

A. I’ve always been very critical of the concentration of wealth. For me, anyone who accumulates a lot is — as a rule — an idiot. I didn’t anticipate the repercussions that signing the letter would have. It’s very obvious to me that I have to pay more taxes. Proportionately, I gave up much more than the BASF heiress [Marlene Engelhorn]… and my money wasn’t an inheritance. I created Gaia 15 years ago. Raising resources for the Landless Workers’ Movement (MST) and other social movements — for impactful and low-profit operations — is a way of giving up [money] in favor of a greater objective.

Q. The Davos letter says that philanthropy isn’t the solution to poverty.

A. If a rich person suffers from cancer, he or she will probably donate to cancer research, but who will donate to the diseases that the poorest people suffer from? When we replace taxes with philanthropy, we privatize the common good, leaving it in the hands of a few people.

Q. Are you from the top 1%, 0.1% or 0.01% of Brazil?

A. No idea. I have a very privileged economic position. And I think the world’s tax system is unfair. Brazil’s system is very unfair.

Q. In Brazil, whoever earns 4,000 reais a month (about $800) pays the same income tax as someone who earns four million ($800,000). This is according to the Ministry of Finance.

A. It’s not reasonable, it’s not right. And we find many poor people on the right arguing that the rich shouldn’t have to pay more taxes because they think that, one day, they’ll also become rich. It’s crazy. And there are those who threaten to leave the country if they’re charged more. Blackmailers. Where’s the social conscience of these people?

Q. Why are low taxes for the super-rich catastrophic for society? Why do they threaten democracy?

A. People have to understand that money has a gigantic influence on power. An example from Brazil: agribusiness entrepreneurs [fund half of the legislators]. Is this because Brazilian people really love agriculture? No, it’s because money buys power and influence in the media. It’s the same case in the United States.

Q. And what are the consequences?

A. One of the forms of corruption that people don’t see is the purchase of public goods at a cheaper price. [Billionaires] pay few taxes, so they accumulate more money: they begin to control public goods that are no longer public. They get to control everything. The objective of this is to weaken the state. Real power isn’t in the hands of those we elect — the true power lies with the people who have the most money, who are hoarding more and more. And the world is moving rapidly down that path.

Q. You say that you founded the Gaia Group to humanize the financial markets. It sounds like a public relations campaign. How was it born and what does it sell?

A. Look, what drives the financial market is greed — it’s a shark’s game. It made me uncomfortable, because I was never like that. The 2008 crisis came and I said: “I want to create a company that’s great to work for, with good people.”

Q. Where did you work before the financial crash?

A. I was the director of a subsidiary of an investment bank. I also worked for agribusinesses. I know the field well. And, when the wave of real estate securitization arrived, I caught the wave. I was lucky.

Q. What are the impact investments you’re focused on?

A. Investments with real impact. We finance housing renovations in favelas, financing for the MST, for family agriculture. And when I tried it out, I said to myself: “This is what I want to do in life.” I decided to sell the traditional part of my business. And I was lucky again, because someone from the competition wanted to buy. And I donated a large part of [the proceeds from the sale]. I’m creating an endowment fund that will support causes. The first priority is education.

Q. Do you find that investing in the Landless Workers’ Movement is a good deal?

A. Everything has turned out great. Investing in the MST gave us a fair return. But you’re not investing in stocks that are going to go up: they’re loans at fair interest rates. From that perspective, it’s a good deal, wonderful. You’re producing food, reducing inequality, planting agroecology... but the financial market prefers to finance pesticides. [Private equity] is completely out of touch with reality, only concerned with quarterly profits.

Q. Capitalism has disappointed you.

A. Absolutely, it doesn’t work.

Q. So how did you get into the financial sector?

A. Because it hires engineers. I was an engineer and good at accounting. At first, I was completely into the system — I even had right-wing thoughts. I began to change my mind when I saw the lack of humanity. That’s not how you treat people! The second thing was understanding that the system is organized to maintain privileges and exploit people. It’s a small self-help club. I look a little like their members: I’m a white, heterosexual man. I let my hair grow, so I wouldn’t look so much like myself. The market is sexist, racist. Many times women — in order to move up — have [to adopt] sexist behaviors. LGBTQ+ people have to pretend. And Black people don’t have the slightest chance.

Q. Is the beach the most democratic place in Brazil?

A. Maybe, although some are closed to the public. Not even Carnival is democratic. Maybe the street troupes of São Paulo... but the super rich don’t attend. And in Salvador, a cordon separates the people from those who pay. The football stadiums… well, there, we’re sort of together.

Q. Do you remember when you made your first million and what you did with it?

A. I’m not a guy who earns money to spend it. My wife takes care of everything.

Q. What’s your guilty pleasure?

A. I travel business class, but I don’t always do it. I think it’s the only whim that’s cool. I have zero attachment to cars, clothes... I like to eat healthy. Oh, I’ve been a vegetarian for 16 years. And vegan several days a week.

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