Philanthropist Bill Gates Nervous About Wealth Tax
“It has always been thus. Extreme inequality creates social carnage and socialist movements, which forces oligarchs to choose between expropriation and backing fascism.”
Bill Gates joined the list of billionaires who have expressed discontent with Sen. Elizabeth Warren’s proposed tax hikes on Wednesday, drawing criticism from observers after failing to clearly rule out voting for President Trump when posed with a hypothetical 2020 match up between Trump and Warren. Warren later responded to Gates with an offer to sit down and talk, which Gates appeared to accept.
“If I had to pay $20 billion, it’s fine,” Gates said at the New York Times DealBook conference yesterday when discussing a possible wealth tax. “But when you say I should pay $100 billion, then I’m starting to do a little math about what I have left over.”
Warren’s wealth tax is far lower than Gates’ estimation, at 2 percent annually on people worth over $50 million and 3 percent annually on Americans worth over $1 billion. Gates is worth approximately $107 billion dollars, meaning that even if he did lose $100 billion he would still be a multi-billionaire.
Gates was then asked who he would endorse in a hypothetical 2020 matchup between Warren and Trump.
“I’m not going to make political declarations,” Gates said. “But I do think no matter what policy somebody has in mind […] whoever I decide will have the more professional approach in the current situation, probably is the thing I will weigh the most. And I hope that the more professional candidate is an electable candidate.”
While some interpreted Gates’ answer as his way of saying “anyone but Trump,” others were disappointed he didn’t give a clear rejection of the president, who lies in stark opposition to Gates on issues the Microsoft founder frequently advocates for like climate change and extreme inequality.
“Astonishing @BillGates, the great philanthropist of our age, is so attached to his own wealth that he refuses to rule out voting to re-elect a white nationalist demagogue over Elizabeth Warren,” tweeted author Anand Giridharadas.
“It has always been thus. Extreme inequality creates social carnage and socialist movements, which forces oligarchs to choose between expropriation and backing fascism,” tweeted journalist Ryan Cooper in response to Giridharadas. “They generally go with option B.”
Hungarian economist Karl Polanyi asserted that unregulated capitalism historically leads to fascism, because the extreme inequality it unleashes produces populist rage that can only be controlled with violent repression or economic redistribution. Cooper used a passage by George Orwell on Hitler’s early support among German elites, who were “willing to forgive him almost anything” in gratitude to the Fuhrer’s destruction of labor unions, to illustrate the theory.
Actual Wealth Tax
Critics noted that under Warren or Sander’s actual tax plans, Gates would remain richly rewarded for his contributions to society.
“Here’s a little math for you, @BillGates: If the Warren wealth tax had been in place since 1982, you would have $13.9 billion left over today,” tweeted economist Gabriel Zucman. “So, voting for Trump?”
The controversy reflected the growing tensions between billionaires and progressives like Warren and Sanders, who argue the American economy is rigged for the rich.
Three billionaires – Bill Gates, Warren Buffett and Jeff Bezos – own more wealth than the bottom half of the U.S. population. Critics argue this extreme concentration of wealth reflects a policy failure, as it is unlikely a single person could accumulate billions in a competitive, well-functioning market.
“Fun fact about Bill Gates and capitalism,” tweeted journalist Ryan Grim. “Decades ago he retired and began giving all his money away. He’s famous for that. Today he’s worth more money than the day he stopped working. Neat trick.”
Economist Binyamin Applebaum notes that when Gates started Microsoft and worked long hours, the top U.S. tax rate was 70%, challenging the argument that higher taxes stifle innovation.
Critics argue that factors like rent extraction, inheritance, monopoly patent laws, labor exploitation, and financial speculation vastly inflate the fortunes of billionaires beyond the economic value they’ve produced. As the New York Times notes, “under Ms. Warren’s plan, Mr. Gates would owe $6.379 billion in taxes next year. Notably, that is less than Mr. Gates earned from his investments last year. Even under Ms. Warren’s plan, there’s a good chance Mr. Gates would get richer.”
Others cite the leverage of billionaires to shape the political process and the rules of the market as evidence of their incompatibility with democracy.
“The fact that each random billionaire’s thoughts on Elizabeth Warren is a news story is itself a powerful demonstration of the disproportionate political influence of the very rich,” tweeted Vox’s Matt Yglesias.
Meanwhile, billionaires like Facebook’s Mark Zuckerberg argue that extreme individual wealth allows for diverse approaches to technological and philanthropic investment, and believe turning the wealth over to the government would have worse outcomes.
“I think it’s good that there are different philanthropies and different organizations that can put competing ideas out about how to do research or science,” said Zuckerberg last month. “I fundamentally believe in that competition that you want different ideas out there.”
Emmanuel Saez and Gabriel Zucman, two left-leaning economists who have advised Sanders, note that Zuckerberg would remain a billionaire under both progressive candidates’ plans.
“Had Sanders’s plan been enacted decades ago, Zuckerberg would have been worth $29 billion in 2018 rather than $61 billion,” writes the Washington Post.
I’ve never seen a billionaire who didn’t employ hundreds, if not thousands of other people through their business ventures. Like it or not, billionaires are the major investors in the economy.
If we take away billionaires’ wealth — putting aside the blatant theft and government oppression that is present in this scenario — then who will invest in the economy? Who will improve technology? Who will store their money in banks so the banks can loan it to others so they can become billionaires themselves?
People don’t understand just how much our economy runs thanks to bllionaires. The bank system alone is contingent on their storing money into it. And they do fund much of the economy.
It’s a matter of whether or not we want fascism. Plutocracy inevitably leads to fascism and suppresses innovation through oligopolies and monopolies. Consider that most wealth in the US is inherited, not earned.. In a well functioning competitive free market, such high inequality would never happen in the first place. And so there would be no plutocracy. I personally prefer democracy. But each to their own.
I applied for loan from an offshore bank, but I got no response.
Ask people trying to survive on social security about “doing a little math” each month.