Microsoft founder and CEO Bill Gates, the second-richest person in the world, according to Forbes, wrote a New Year’s blog post saying “the rich should pay more” as the conversation around growing wealth inequality continues.
Gates said the U.S. tax code needs to be changed because the government “simply does not bring in enough money to meet its obligations,” “collecting about 20 percent of GDP in taxes while spending 24 percent.”
“Meanwhile, the wealth gap is growing. The distance between top and bottom incomes in the United States is much greater than it was 50 years ago,” Gates wrote in a post called “What I’m thinking about this New Year’s Eve.” “A few people end up with a great deal — I’ve been disproportionately rewarded for the work I’ve done — while many others who work just as hard struggle to get by.
“That’s why I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. And I think the rich should pay more than they currently do, and that includes Melinda and me,” Gates added, referring to his wife.
Bill Gates’ Ideas to Fight Wealth Inequality
- Raise estate taxes and close inheritance loopholes because “a dynastic system where you can pass vast wealth along to your children is not good for anyone; the next generation doesn’t end up with the same incentive to work hard and contribute to the economy,” Gates wrote.
- Remove the cap on income subject to Medicare taxes
- Close the carried-interest loophole, which allows fund managers to pay lower capital gains rates on their incomes
- Start taxing large fortunes every decade because investments largely escape taxes if they aren’t sold or traded
- Make state and local taxes more fair
Gates does not believe in a “wealth tax” like Sen. Elizabeth Warren has proposed, and even said he’d consider voting for incumbent President Donald Trump if he faces the Massachusetts Senator in the 2020 election. He has also said previously that “extreme” wealth tax policies like Warren’s and Rep. Alexandria Ocasio-Cortez, D-N.Y., are “missing the big picture.”
But he is for higher taxes on the wealthy.
Gates also doesn’t think the common retort that nothing is stopping the rich from paying more if they want to is plausible.
“Simply leaving it up to people to give more than the government asks for is not a scalable solution,” Gates wrote. “People pay taxes as an obligation of law and citizenship, not out of charity. Additional voluntary giving will never raise enough money for everything the government needs to do.”