The wealthiest class generally earns only a minuscule share of their income from a salary as the majority share is earned via profits on investments including stock or real estate. This is taxed at 20 per cent.
Bill Gates — the second richest person globally (after Amazon’s Jeff Bezos) with a net worth of $113 billion, according to Bloomberg Billionaires Index — believes that disproportionately high wealth among people like him highlights the inequality gap. This gap “separates the lucky from the unlucky” and that there is a need for a fairer tax system in order to bridge that gap. “A few people end up with a great deal—I’ve been disproportionately rewarded for the work I’ve done—while many others who work just as hard struggle to get by,” Microsoft co-founder Gates wrote in his blog post last week.
“That’s why I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. And I think the rich should pay more than they currently do, and that includes Melinda and me,” he said as a suggestion to the US government for the fairer tax system. “The wealth gap is growing. The distance between the top and bottom incomes in the United States is much greater than it was 50 years ago,” he wrote on GatesNotes, the blog.
Gates thoughts echoed Warren Buffet’s who said that the problem with the US economy is people like him, he had told PBS Newshour in 2017. “The real problem, in my view, is — this has been — the prosperity has been unbelievable for the extremely rich people.”
Gates explained further the lack of fairness in the tax system. The US government collects about three-quarters of its revenue from taxing labour — wages and salaries as most people in the US earn almost their entire income from salary and hourly work. This is taxed at a whopping 37 per cent maximum. On the other hand, the wealthiest class in the country generally earns only a minuscule share of their income from a salary as the majority share is earned via profits on investments including stock or real estate. This is taxed at 20 per cent if they’re held for over a year. “That’s the clearest evidence I’ve seen that the system isn’t fair,” he said.
Gates hoped to see progress in how taxes are collected and how they are spent for a more equitable world in the 2020s. “We’ve updated our tax system before to keep up with changing times, and we need to do it again, starting with raising taxes on people like me,” he said.