Bill Gates is open to losing $101 billion to the tax man—but not policies that replicate North Korea’s ‘unbelievable equality’
As a man worth $163 billion, Microsoft co-founder Bill Gates knows firsthand how much money people really need—and how much they can afford to pay in tax.
The tech titan has often advocated for higher taxes on the rich, as well as encouraging his ultra-wealthy peers to engage in philanthropy.
However, speaking on a podcast recently Gates cautioned against taxing talent to the point that it becomes a disincentive.
The father of three made it clear America’s entrepreneurial spirit was one of its greatest strengths, something any proposed taxation plan should take into consideration.
“The idea that you have the opportunity to create a company that’s very valuable—the U.S. is the envy of the world at that,” Gates told the On with Kara Swisher podcast in an episode released yesterday
That being said, “I would set tax rates quite a bit higher for rich people,” Gates continued.
Indeed, he said he would support a tax which axed 62% of his wealth—the equivalent of $101 billion.
But there’s a balance to be struck—especially in a nation that prides itself on the American dream, where those who create wealth expect to enjoy some of its benefits.
“You definitely do get to the point where you’re killing the goose that laid the golden egg,” Gates said, referring to the even higher tax rates than his that some propose. “North Korea? Very equal, unbelievable equality…
“I don’t even like the equality framing because 100 years ago most people were never literate. So we’ve created wealth and I think the system that does that has a few elements that we shouldn’t throw out.”
Created vs dynastic wealth
Gates is one of a handful of entrepreneurs who set up American businesses that have gone on to create millions of jobs, and provide a backbone to the stock market.
And while the the investors and entrepreneurs behind the Magnificent 7 stock group are the kind of super-rich that Gates would like to tax more, they are also the individuals America’s economy needs—a fact that Gates eagerly accepts.
On the flip side, however, the Seattle native has also been an advocate for cracking down on dynastic wealth passed down to those who have not created it.
“My dad is deceased but he and I worked on promoting the estate tax,” Gates added. “I’m a huge believer in the estate tax, I continue to promote that.
“They actually got rid of it briefly and I think that’s a mistake because those are dynastic fortunes not somebody who created something.”
Which tax the rich proposals might work?
The 68-year-old is familiar with some of the proposals on how taxing the ultra-rich like himself would work.
Recently he wrote on his blog, GatesNotes, about meeting Sen. Bernie Sanders and discussing the politician’s plan for a millionaires tax.
Sen. Sanders’s plan entails an annual 1% tax on a married couple’s net worth above $32 million. For example, a couple worth $32.5 million would pay an annual tax of $5,000.
Under Sen. Sanders’s plan, this tax rate would increase to 2% for couples with a net worth of $50 million to $250 million, 3% from $250 million to $500 million and 4% from $500 million to $1 billion.
For the billionaire bracket, those with a net worth of between $2.5 billion and $5 billion would pay 6% tax over $32 million, 7% between $5 billion and $10 billion, and 8% on wealth over $10 billion.
These percentages are for married couples and would be halved for individuals.
“We’d still have to grow the economy to get to the ideal level to set the safety net as high as Bernie alludes to,” Gates told Swisher. “As you get richer, you raise the safety net. That’s the story of the United States, the government’s not very good at executing so, you know, it’s always imperfect.
“But I would not make it illegal to be a billionaire.”
This is a point where the pair are at odds—with Sen. Sanders saying the government should effectively ban billionaires by confiscating any wealth above $1 billion.
In an interview with HBO Max’s Who’s Talking to Chris Wallace, the Vermont senator said last year: “You may disagree with me, but I think people can make it on $999 million,” Sanders added. “I think that they can survive just fine.”
“He would take over 99% of what I have,” Gates continued. “I would take away 62% of what I have.”
The respective loss to Gates’s net worth would be more than $101 billion.
