Bill Gates 'wouldn't be against a wealth tax' — here's how it could affect his fortune
Despite being the world's second richest man, Bill Gates supports higher taxes on America's wealthiest.
"I doubt the U.S. will do a wealth tax, but I wouldn't be against it," Gates told Bloomberg News in an interview broadcast Tuesday.
"If society got behind a wealth tax, yes, you can raise money that way," he told Bloomberg. "Not many countries do it. In fact, Europe has less today than it had before, partly because if you're a small country, the issue of people leaving, changing their residence, is a fairly big issue." (In 1990, a dozen European countries had a wealth tax, including France and Sweden. Today only four do: Norway, Spain, Switzerland and Belgium.)
A wealth tax could have a huge impact on Gates' fortune.
Take Democratic presidential candidate Sen. Elizabeth Warren's proposed wealth tax for example. Warren's plan includes a 2% annual tax on those worth more than $50 million. For billionaires, there would instead be a 3% annual tax.
A recent paper by two economists who helped Warren create her plan — University of California, Berkeley professors Emmanuel Saez and Gabriel Zucman — calculated what effect Warren's plan would have had on America's richest, including Gates, if it had been imposed starting in 1982 (the first year Forbes magazine began tracking the net worth of the 400 richest Americans) through 2018.
Gates, whose fortune was tallied at $97 billion on 2018's Forbes 400 list, would have been worth nearly two-thirds less last year — a total of only $36.4 billion — had Warren's plan been in place for the last three decades. Gates' current net worth is $105.3 billion, according to Forbes.
(Other billionaires would have taken a big hit, too, according to the paper: Jeff Bezos, whose fortune in 2018 was $160 billion, according to Forbes' list, would have had $86.8 billion in 2018, and Warren Buffett would have $29.6 billion instead of $88.3 billion.)
Though Gates doesn't believe a wealth tax is likely, he is for an expansion of the estate tax, which is a tax on all transferred property, cash, real estate and other assets upon death.
"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% that it was a few decades ago," he told Bloomberg.
Such an increase would substantially impact Gates' estate too.
Just look at Democratic presidential candidate Sen. Bernie Sanders' proposed tax plan, which he calls the "For the 99.8% Act." It would tax the estates of those who inherit more than $3.5 million, with rates up to 77% (an increase from the current 40% estate tax that applies to those who inherit more than $11 million).
According to calculations released by Sanders' campaign and based on Gates' net worth on Jan. 28 (not long after Sanders announced his plan), Gates would pay $74 billion in estate taxes under Sanders' proposed plan, nearly double the $38 billion he would pay under current tax law.
Sanders' proposed tax rates are:
- $3.5 million to $10 million: 45% tax
- $10 million to $50 million: 50% tax
- $50 million to $1 billion: 55% tax
- More than $1 billion: 77% tax
Sanders' plan could make $2.2 trillion from 588 billionaires in the United States, according to a statement from Sanders' office published in January.
It's not the first time Gates has made the case for higher taxes on the wealthy.
"I need to pay higher taxes," he told CNN's Fareed Zakaria in February of 2018. "I've paid more taxes, over $10 billion, than anyone else, but the government should require people in my position to pay significantly higher taxes."
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