The world’s second-richest man, Microsoft co-founder Bill Gates has warned against tax strategies which seek to increase the marginal tax rate for the wealthiest citizens.
Instead, governments seeking to tax their richest citizens more should increase the capital gains tax, he told CNN.
“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 said.
His words come after Democratic Representative Alexandria Ocasio-Cortez of New York suggested tax rates as high as 70 per cent on the ultra-wealthy.
US citizens faced taxes this high in the 1970s, but Gates said that while wealthy citizens could pay more tax, this wasn’t the way to go about it.
“Even when that rate was high, the actual collection because of ways people could defer wasn’t – it never got above 40 per cent, actually.”
Dutch historian Rutger Bregman recently made headlines after accusing the attendees of the World Economic Forum in Davos of ignoring the elephant in the room – their wealth.
“This is my first time at Davos and I find it quite a bewildering experience to be honest,” he said.
“I mean, 1,500 private jets flown in to hear David Attenborough speak about how we’re wrecking the planet.
“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.”
He was speaking during a panel on an Oxfam report finding 26 billionaires have the same wealth as the poorest 3.8 billion people in the world.
“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.”
In Australia, the Labor party is currently approaching an election with a platform of cutting capital gains tax and negative gearing benefits.
Labor plans to halve the capital gains tax discount for all assets purchased after a future date, reducing the current discount from the current 50 per cent to 25 per cent.
“Negative gearing and the capital gains discount have not achieved their aim to boost housing supply and encourage the building of more new houses. This year, they will cost the budget over $10 billion. That’s more than that the government spends on higher education or child care,” the party said in a policy outline.
The party believes curtailing these investor benefits will boost housing affordability.
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