A week after Massachusetts Sen. Elizabeth Warren released her plan to fund a Medicare-for-All health care system, the worlds second-richest person weighed in with some skepticism. “I’m all for super-progressive tax systems,” Microsoft founder Bill Gates told New York Times columnist and co-anchor of CNBCs Squawk Box, Andrew Ross Sorkin, at a conference in New York on Wednesday. “I’ve paid over $10 billion in taxes. I’ve paid more than anyone in taxes,” he added, drawing a laugh from the crowd. “If I had to pay $20 billion, it’s fine.
Gates was referring to Warrens plan to partially fund her health care program by increasing her proposed wealth tax on net worths above $1 billion to 6%. That’s up from her earlier proposed rate of 3% for billionaires. In the conversation, Gates pushed back against taxing corporations and tech companies too heavily, which he argued could limit innovation. He also warned against aggressively taxing ultra-wealthy individuals.
“When you say I should pay $100 billion [in taxes], then I’m starting to do a little math about what I have left over,” Gates said, though he quickly added that he was joking. Still, he said, “You really want the incentive system to be there without threatening that,” referring to the fact that America’s capital-prioritizing economy generally makes the U.S. a “desirable place to do innovative companies.”
Gates amassed his fortune after founding Microsoft in 1975 and becoming a pioneer in home computing. The Bloomberg Billionaires Index lists his net worth at $108 billion, so while he was probably exaggerating, it’s worth noting that a 6% tax on his net worth would not come close to a $100 billion tax bill.
Gates and his wife Melinda have long positioned themselves as powerful figures in the philanthropy world; Gates has famously pledged to donate half his wealth. The couple’s joint foundation, the Bill and Melinda Gates Foundation, is the largest private foundation in the world, with a trust endowment of $46.8 billion dollars. It operates in the U.S. and in developing countries, and at the end of 2018 it had donated over $50 billion dollars since its inception.
In recent years, ultra-wealthy philanthropists have faced more scrutiny as research has shown that wealth concentration is returning to levels last seen during the Roaring Twenties, aka right before the Great Depression. One of the leading skeptics of philanthropy as an effective means of reversing wealth inequality is writer Anand Giridharadas, who wrote the book Winners Take All: The Elite Charade of Changing the World on this exact topic.
In a Wired article, Giridharadas pushed for empowering social change by funding the government through progressive taxation, rather than relying on rich people to be charitable. Of ultra-wealthy philanthropists, he said, They favor forms of change that bypass government and rely on the private sector and its charitable spoils. They are warier of collective, democratic fixes, which can mean higher taxes, tighter regulation, and reduced profits.
Gates’s comments reinforce this idea. Is it nice that his foundation has given over $50 billion away? Yes, sure, of course. Would it be better if wealthy people were taxed in a way that could empower the government to fully fund social services, schools, and safety net programs that could support all citizens? Per Giridharadas and some of the leading 2020 Democrats, the answer is a resounding yes.
Real change happens in the arena of politics and policy, Giridharadas wrote in the Wired article. And if you arent working to reform our common life in this era of extreme inequality and social fracture and democratic unraveling, youre probably not changing the world.
Through his conversation with Sorkin, Gates proved how the idea of a benevolent billionaire is usually if not always an oxymoron. He is willing to give away large amounts of his own money, yes, but he seems to resent the idea of doing so through taxation, which would mean that he could not dictate the terms or beneficiaries of his benevolence.
When Sorkin asked Gates about his presidential preferences, Gates did acknowledge the need for more taxation on the wealthy. He called for the reinstatement of the former estate tax, and a tax on capital the same as labor. Without naming names, though, he seemed to hint that this sort of change would be better executed under someone more moderate than Warren or Bernie Sanders, her even more progressive 2020 rival.
Id love somebody to find a middle-ground approach, because the governments role in health care and better education the government does need more resources than it has today, Gates said, but overly aggressive taxation isn’t the way.
Sorkin explicitly asked Gates who has spoken out against President Trump’s policy positions what he would do if Warren were the Democratic nominee. He did not give a conclusive answer, though it ultimately seemed like he would grudgingly vote for Warren despite his disagreements with her policies.
Im not going to make political declarations, Gates said. As much as I disagree with some of the policy things that are out there, I do think a professional approach to the office … is the thing that Ill weigh the most. Based on Gates’s past comments about Trump‘s policies, it’s safe to interpret that remark as him likely leaning away from casting a ballot for the incumbent.
Pressing further on the prospect of a President Warren, Sorkin also asked if Gates if he would be willing to meet with her about the 6% tax. Gates responded that he was not sure if Warren would agree to “sit down with somebody who has large amounts of money.
Within a few hours of his making that comment, Warren said she would “love” to meet Gates to discuss the plan and the tax.
I’m always happy to meet with people, even if we have different views.[Bill Gates], if we get the chance, I’d love to explain exactly how much you’d pay under my wealth tax, she wrote.
She added: I promise it’s not $100 billion.