“Bill Gates criticises Elizabeth Warren’s plan for tax on super-rich” (BBC):
Under the original plan, households with a net worth between $50m (£39m) and $1bn (£780m) will be charged with a 2% “wealth tax” every year. This would rise to 3% for any households with a net worth of over $1bn.
But last week, Ms Warren suggested doubling the latter rate – from 3% to 6%. She said the money raised from this new tax would be used to fund her healthcare plan, which is expected to cost the federal government $20.5tn over 10 years.
Mr Gates hit back at the idea during a talk at the New York Times DealBook conference in New York on Wednesday.
“I’m all for super-progressive tax systems,” he said. “I’ve paid over $10 billion in taxes. I’ve paid more than anyone in taxes. If I had to pay $20 billion, it’s fine.
“But when you say I should pay $100 billion, then I’m starting to do a little math about what I have left over,” he added. “You really want the incentive system to be there without threatening that.”
(I don’t understand his statement that he has paid $10 billion in taxes. If he mostly let his Microsoft stock sit or donated it to his foundation, why did he have to pay capital gains tax? Certainly he would not have had a substantial amount of ordinary income that would attract the high ordinary income tax rates that he has advocated. Maybe the $10 billion is capital gains tax on venture capital investments that he made on which he was forced to exit, e.g., due to an acquisition? Plus some from selling Microsoft stock to diversify? Or he is referring to corporate taxes paid by Microsoft (see below) that he paid indirectly?)
He’s “all for super-progressive tax systems,” but with one exception!
Related:
- Microsoft’s pre-Trump corporate tax system: “By conducting sales from places with small populations and low tax rates, and routing some profit through virtually tax-free jurisdictions like Bermuda, Microsoft has cut billions of dollars from its tax bill over the last decade.”
Hard to take him seriously since the Bill & Melinda Gates Foundation is potentially the largest tax avoidance scheme out there. Maybe he’ll eradicate polio in Africa, and potentially solve India’s overwhelming sanitation crisis, but wouldn’t donating money to the World Health Organization or even to the Centers for Disease Control (since Gates has promised to spend about a third of the Foundation’s budget domestically) have been just as effective?
from Foundation fact sheet: “Our United States Program leadership team oversees the foundation’s work on education, libraries and access to the Internet, and emergency relief in the U.S. as well as community grants and local efforts in the Pacific Northwest.”
How much is spent on MSFT products?
One man’s “tax avoidance” is another man’s “keeping money out of hands of people who will spend them on killing peasants in remote disty places”.
Depends on the efficiency of WHO in handling donated money. Would you estimate it to be very effective?
@Ziv: agree that these IGOs like WHO aren’t efficient. But with the Gates Foundation approaching 1500 employees, how efficient & effective will it be?
@Suzanne — I’m willing to be quite a bit more efficient than WHO and similar organizations. It’s an easy bet to make, because BillG is making the same bet already…
A wealth tax is going to be a festival for tax lawyers. Yes, that Van Gogh might fetch $20M at auction, but really now, it’s $5 in plywood, $20 in gesso and paint, and I know artists who’ll paint something on it for $500…
And watch the fireworks when billionaires are forced to sell stock to pay the wealth tax, then pay capitol gains tax on the stock they just sold.
Considering that lawyers are a major source of donations for Dems it’s hardly suprising that nearly every Dem initiative is a goldmine to lawyers.
Wealth taxes already exist in Scandinavia and work well (though admittedly not in Common Law systems). If someone has more than $50 million in wealth, it is very likely they will have a few million in liquid assets, so they won’t really need to sell that Van Gogh.
Johnny: https://en.wikipedia.org/wiki/Wealth_tax says that Denmark, Finland, and Sweden had wealth taxes, but abandoned them in 1995, 2006, and 2007. If the taxes were working well, why did these countries kill them off?
https://www.cato.org/publications/commentary/why-europe-axed-its-wealth-taxes
goes through some of the issues. Rich people leaving to escape seems to have been part of it. This is tougher for U.S. citizens so maybe a wealth tax would work better in the U.S. than it did in Europe.
Being a 50 millionaire today is equivalent to being a 1 millionaire 30 years ago. It’s like listening to programmers 30 years ago begging for a tax on all the homeless people making $100,000 today.