Bill Gates Pushes for Higher Taxes on Rich as Wealth Soars
In a fitting end to the decade, the world’s second-richest person said he wants his fellow billionaires to pay much higher taxes.
(Bloomberg) -- Microsoft Corp. co-founder Bill Gates started the last decade worth more than $50 billion and a pledge to donate a big chunk of his fortune to charity.
By the end of it, he’d given billions of dollars to fight poverty and improve health care and education. But his net worth also more than doubled during the period, a result of soaring stock markets and favorable tax policies.
And so, at the end of the decade, the world’s second-richest person said he wants his fellow billionaires to pay much higher taxes.
U.S. lawmakers should close loopholes, raise the estate tax and hike the capital-gains tax so that it equals the rate on labor income, Gates wrote Monday in a year-end blog post. He also called for states and local governments to make their taxes “fairer” and reiterated his support for a state income tax in Washington, where he and his wife Melinda live.
“I’ve been disproportionately rewarded for the work I’ve done -- while many others who work just as hard struggle to get by,” he wrote. “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, 64, has a net worth of $113.7 billion, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people. In 2010, he and Melinda announced the Giving Pledge with Warren Buffett and asked other billionaires to sign to give away portions of their fortunes. As of May, 204 people from 23 countries agreed to participate.
At an event in November, Gates expressed reservations about the wealth tax proposed by presidential candidates Elizabeth Warren and Bernie Sanders. In his blog post, he said he won’t take a position on the various proposals being debated during the campaign.
“But I believe we can make our system fairer without sacrificing the incentive to innovate,” he wrote. “Americans in the top 1% can afford to pay a lot more before they stop going to work or creating jobs. In the 1970s, when Paul Allen and I were starting Microsoft, marginal tax rates were almost twice the top rate today. It didn’t hurt our incentive to build a great company.”
Some people ask Gates why he doesn’t just pay extra taxes himself, but that “is not a scalable solution,” he wrote. “Additional voluntary giving will never raise enough money for everything the government needs to do.”
The Gates foundation had paid out $50.1 billion in grants as of the end of 2018. Gates defended tax breaks for foundations in his post, writing that “philanthropy is good at managing high-risk projects that government can’t take on and corporations won’t.”
--With assistance from Sophie Alexander.
To contact the reporter on this story: Ben Steverman in New York at bsteverman@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum, Steven Crabill
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