Bill Gates, number two on the list of the richest men in the world, has again talked about the wealth tax. This time he said that he and other billionaires should pay higher taxes in order to change the unfair system that has led to growing income inequality.
Gates advocated a tax system in which people pay a higher tax rate if they have more money than others. He wrote this in his final blog post of the year on Monday. "I think rich people, including Melinda and me, should pay more than they pay now." The billionaire drew attention to the growing gap between the maximum and minimum income in the U.S., saying that "the system is unfair" and that there is no reason to "put wealth before work, as we do today." Gates wrote that to solve the problem, the U.S. government should raise taxes on the ultra-wealthy. Specifically, he pointed out that raising the capital gains tax (a tax on investment income) would shift much of the tax burden to the wealthy. He also voiced support for more equal state and municipal taxes, not to mention a higher inheritance tax, and pointed to the need to eliminate the loopholes that "many rich people take advantage of." The Microsoft co-founder wrote the post a few months after Democratic 2020 candidate Elizabeth Warren first began publicly criticizing billionaires and calling for a 6 percent wealth tax on the ultra-wealthy. In November, Gates, along with other billionaires, expressed skepticism about Warren's proposed wealth tax, though he agreed that economic inequality was becoming a pressing issue.
Gates’ philanthropy: Over the past ten years, Gates has given billions of dollars to charity. In the same period, however, his fortune has grown by more than $50 billion thanks to favorable tax policies and rising stock markets, Bloomberg wrote. Gates’ fortune has more than doubled over the past decade to $108.5 billion, up from $53 billion in 2010, Forbes estimated.
Supporters: Certainly Gates is not the first rich person to argue that he should pay higher taxes. For example, Abigail Disney, heiress to the Walt Disney empire, has spoken out against unchecked executive pay increases for Disney, calling it the clearest example of growing economic inequality in the United States. She separately pointed to Disney CEO Bob Eiger’s “insane” compensation package, which in 2018 was $65 million – about 1,424 times the company’s median employee salary.
Taxes: According to a tax calculator published by Elizabeth Warren’s campaign office, which shows how much each billionaire would have to pay under her initiative, Gates would have to shell out $6.4 billion next year. Not a small amount compared to his huge fortune.
Context: In the run-up to the 2020 election, many corporate executives and influential Wall Street figures have criticized Warren in recent months, seeing her as a threat to big business. In early November, a public dispute erupted between Warren and billionaire investor Leon Cooperman, illustrating the negative business reaction to the Democratic senator’s proposal to impose a 6% wealth tax on billionaires to fund her massive Medicare For All (health care for all) program. Since then, several other big-company executives and billionaires have also criticized Warren’s initiative. These include JPMorgan Chase CEO Jamie Dimon, investor Mark Cuban, and former Goldman Sachs CEO Lloyd Blankfein. Billionaires and hedge fund founders such as Paul Tudor Jones, Steve Cohen and Stanley Druckenmiller also made grim predictions about what Warren’s ascension to power would bring: the stock market would fall, according to estimates, 10-25%.