Bill Gates, Second Richest Man On Earth, Disagrees With Alexandria Ocasio-Cortez’s Marginal Tax Plan
When Alexandria Ocasio-Cortez first presented the idea that the rich should be taxed up to 70 percent on all money made after $10 million in a year, there was a clear and loud gasp among the wealthy. How could a young woman of color have the audacity to propose such a thought as to marginally tax the rich more than the poor? The notion of a marginal tax on the rich to help fund the rest of the country was so unusual to former Starbucks CEO and billionaire Howard Schultz that he decided to run for president.
“Let’s be sensible about what we are suggesting,” Shultz said, according to Business Insider, regarding the congresswoman’s marginal tax plan. “Let’s not just throw things against the wall because it’s a good slogan or a good press release.”
Now, another billionaire is speaking out against marginally taxing the excessively rich.
Bill Gates, the second richest man in the world, said taxing the wealthy more than other group isn’t reasonable.
— CNBC International (@CNBCi) February 12, 2019
In an interview with the Verge, Gates thinks a 70 percent marginal tax on the rich, which would tax money made after they make $10 million in one year, is missing the “bigger picture” and would lead to other problems. Gates said that a marginal tax on the super rich will only cause them to put their money in off-shore accounts (something the excessively rich already do to avoid paying their fair share), and added that it’s difficult to show who is wealthy because of some people’s money is in stocks, not actual currency.
“Certainly, the idea of government being more effective in terms of how it runs education or social programs, there’s a lot of opportunity for improvement there,” he said. “In terms of revenue collection, you wouldn’t want to just focus on the ordinary income rate, because people who are wealthy have a rounding error of ordinary income.”
He did, however, offer an alternative: “The estate tax and the tax on capital, the way the FICA [Federal Insurance Contributions Act] and Social Security taxes work. We can be more progressive without really threatening income generation — what you have left to decide how to spread around.”
Gates also addressed Ocasio-Cortez tax plan on the “Late Show” and admitted to being biased about the idea.
Stephen Colbert, the host of the “Late Show,” asked Gates and his wife Melinda “There’s a lot of talk right now that maybe billionaires shouldn’t exist, have you heard some of this talk?”
Gates responded by saying: “Well, we might be biased” and added, “I think you can make the tax system take a much higher portion from people with great wealth.” While that response seemed as if he was coming around to Ocasio-Cortez’s tax plan he then pushed back on the idea.
“So I think that’s a great debate,” Gates told Colbert. “I think if you go so far as to say that there’s a total upper limit, that might have more negatives than positives. But, you know, I may have a distorted view of this.”
Hey, at least he admits to it, but there’s an essential element about Ocasio-Cortez’s tax plan that billionaires refuse to see.
History shows that a marginal tax existed between 1957 and 1970s and it worked.
"From 1957 through the 1970s, the tax rate was at 70% or above, yet the economy was markedly stronger during that period than it is now."https://t.co/VcKEumL5LH
— Grey Matter (@TheAngryLiberal) February 7, 2019
The marginal tax in the past has been as high at 92 percent. The most important part of a marginal tax plan is that not all of the income is taxed at that rate. People are free to earn up to $10 million in a year at the normal tax rate. However, any money generated over the $10 million threshold is then subjected to an elevated tax. The revenue generated by the tax plan, according to some experts, would benefit the U.S. economy and strengthen the middle class. Currently, people are seeing their own tax refunds going down or owning thousands of more dollars to the federal government because of Trump’s tax plan that gave tax breaks to the same ultra-wealthy who don’t want the 70 percent marginal tax.
According to Fortune magazine, a majority of Americans approve of Ocasio-Cortez’s tax plan. Fifty-nine percent of registered voters, 71 percent of Democrats, 60 percent of Independents, and 45 percent of Republicans, all support the 70 percent marginal tax on the excessively wealthy.