Wealth inequality in the U.S. has grown over time, according to data from the Pew Research Center. As wealth inequality grows, the disparity has become more apparent, and more have tried to shine a light on the issue. Even billionaires like Bill Gates have something to say about its prominence.
In recent years, Gates’ has become more vocal in his views on taxation. Explore his recent comments about wealth inequality, how his proposal might impact the economy and what others have to say about this issue.
Bill Gates on Wealth Inequality
In an episode of “What’s Next? The Future with Bill Gates,” a docuseries on Netflix, Gates explored the topic of wealth inequality. Of people worth billions, Gates said in the episode, “It’s such a mind-blowing amount of money relative to personal needs.”
Although Gates wouldn’t go so far as to give a direct yes or no answer to the question of whether or not he was too rich, he did share the view that wealthy people should share more of their wealth with the world. Gates said in the episode, “It’s a huge amount of wealth, which if you even tried to consume it would be kind of absurd. You want that money to be given back to society, not just consumed.”
In addition to his philanthropic efforts, Gates has indicated his approval for higher taxes on billionaires such as himself. In a 2019 blog post, Gates wrote, “I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. I think the rich should pay more than they currently do.”
According to his calculations, which he shared with journalist Kara Swisher at a recent event in New York, the tax system proposal would eliminate around 62% of his wealth. Of course, that would still leave him with significantly more wealth than the average American.
Although his comments touched on tax issues, Gates puts more of a focus on voluntarily giving wealth away. “I think the world would be better if billionaires voluntarily chose to give more money away,” said Gates in the docuseries.
Beyond talking about charity, Gates has given away billions of dollars, partially through the Bill and Melinda Gates Foundation. Additionally, Gates founded the Giving Pledge with Warren Buffet and Melinda French Gates, which encourages billionaires to give away at least 50% of their funds to charity during their lifetimes.
Far-Reaching Economic Impacts
If Gates’ proposed tax structure came to pass, it would likely have significant economic impacts. After all, hiking taxes on wealthy individuals would lead to an influx of tax revenue, which the government could use for any purpose it sees fit.
It’s difficult to predict the exact consequences, but the wealth inequality gap would likely shrink. Beyond that, it is hard to imagine where the government would choose to spend the funds.
What Others Have To Say About Taxing Billionaires
Bill Gates isn’t the only person with an opinion about taxing wealthy individuals. Take a look at opinions from other prominent individuals below.
Bernie Sanders
Bernie Sanders has advocated for a tax on extreme wealth, specifically on individuals in the top 0.1%. According to Sanders’ website, this would only apply to individuals with a net worth of over $32 million. Under his plan, tax revenue would increase by $4.35 trillion over the next decade, and cut the wealth of billionaires in half over a 15-year period. Presumably, the wealth tax would be on top of the existing income tax setup.
Here’s how it would work, according to Sanders’ website: “This tax on extreme wealth would have a progressive rate structure that would only apply to the wealthiest 180,000 households in America who are in the top 0.1 percent. It would start with a 1 percent tax on net worth above $32 million for a married couple. That means a married couple with $32.5 million would pay a wealth tax of just $5,000.”
The plan continues, “The tax rate would increase to 2 percent on net worth from $50 to $250 million, 3 percent from $250 to $500 million, 4 percent from $500 million to $1 billion, 5 percent from $1 to $2.5 billion, 6 percent from $2.5 to $5 billion, 7 percent from $5 to $10 billion, and 8 percent on wealth over $10 billion. These brackets are halved for singles.”
Warren Buffett
Warren Buffett, famous investor and co-founder of the Giving Pledge, has publicly stated that higher taxes on the wealthy wouldn’t be a bad thing. However, based on the current tax code, he encourages other mega-rich individuals to make an effort to give away vast sums.
Back in 2011, Buffett wrote in a New York Times piece piece, “I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy.”
Buffett continued, “Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering. My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”
Takeaway
Higher taxes on the wealthy are a commonly discussed issue across the nation. Many, including billionaires, claim to want higher taxes on extreme wealth. But so far, these potential policies haven’t gone into effect.
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