Bill Gates says the politicians proposing 70% income tax rates for the superrich are ‘missing the picture’
Billionaire philanthropist Bill Gates says there’s a “misfocus” in the way America’s wealthiest residents are taxed.
He said if you focus on raising the ordinary income tax rate for America’s superrich, “you’re missing the picture.” The highest earners often have wealth tied to company stock, which isn’t taxed as “ordinary income.”
Gates said “we can be more progressive without really threatening income generation — what you have left to decide [is] how to spread [it] around.”
There’s been a lot of talk lately of upping taxes for America’s highest earners.
But Bill Gates believes there’s a “misfocus” on how the government currently taxes America’s wealthiest residents, he said during a recent podcast interview with The Verge’s Nilay Patel.
“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,” said Gates, who’s worth around $96 billion.
Gates said America’s wealthiest people have complicated financial situations that the current US tax system doesn’t recognize.
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“They have income that just is the value of their stock, which if they don’t sell it, it doesn’t show up as income at all, or if it shows up, it shows over in the capital gains side. So the ability of hedge fund people, various people — they aren’t paying that ordinary income rate,” he said.
“The one thing that never gets much press — the IRS shows the statistics for the top 400 people of the highest income and the rate they pay,” Gates said. “It’s about a 20% rate, so it has nothing to do with the 39.6% marginal ordinary income rate. So it’s a misfocus. If you focus on …read more
Source:: Business Insider