Yahoo Finance Bill Gates supports tax on the rich: Here’s how much he’d lose
The world’s second richest man, Bill Gates, said that he “wouldn’t be against” a tax on the ultra-wealthy, but doubts it would happen.
Gates, who has a net wealth of US$106.8 billion (AU$157.41 billion), told Bloomberg News that a wealth tax is a way to raise money, although it hasn’t been implemented widely.
Dutch historian Rutger Bregman made headlines earlier this year after calling for a wealth tax at the World Economic Forum’s meeting in Davos, Switzerland.
“Ten years ago the WEF asked the question, ‘What must industry do to prevent a broad social backlash?’ The answer is very simple: just stop talking about philanthropy and start talking about taxes. Taxes, taxes,” Bregman said.
“I hear people talking the language of participation and justice and equality and transparency.
“But then almost no-one raises the real issue of tax avoidance, right, and of the rich just not paying their fair share.
“It feels like I’m at a firefighters’ conference and no-one’s allowed to speak about water.”
In the US presidential race, Democratic candidate, senator Elizabeth Warren, suggested a wealth tax of 2 per cent on those worth more than US$50 billion.
A paper by University of California, Berkley professors Emmanuel Saez and Gabriel Zucman calculated the impact of such a tax on America’s 15 wealthiest people.
Using Gates’ 2018 net worth of US$97 billion, it found that if Warren’s tax strategy had been implemented since 1982 - when Forbes began tracking America’s wealthiest, Gates’ wealth would have shrunk to US$36.4 billion.
Amazon founder, Jeff Bezos would have seen his US$160 billion in 2018 reduced to US$86.8 billion.
Better than a wealth tax: Bill Gates’ ideas
While Gates said he wouldn’t be against such a tax, the Microsoft co-founder believes there are better ways to reduce inequality.
Governments would be better off increasing capital gains tax, according to Gates.
“The big fortunes, if your goal is to go after those, you have to take the capital gains tax, which is far lower [than the marginal tax rate] at like 20 per cent, and increase that,” he told CNN.
Gates said the US should also increase the estate tax.
“The closest thing we have to [a wealth tax] is the estate tax. And there, I’ve been a huge proponent that that should go back to the level of 55 per cent that it was a few decades ago,” he told Bloomberg.
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