A lot of the 2020 Democratic candidates so far have made plenty of promises. From offering free health insurance to free college, paying off student debt and even offering every American $1,000 extra per month. Of course, the biggest question from critics and supporters alike has been how the U.S. expects to afford such expenditures.
The answer is usually the same: implement a wealth tax. Democrats staunchly believe the rich in this country should be taxed way more than they are. The goal is to redistribute the wealth so a handful of people don’t control most of the wealth. Whether it’s a good idea to actually start increasing taxes for the wealthy has yet to be seen, but we’ve already had some impact in the past.
Bill Gates is definitely in the camp of believing the wealthy should pay more. As one of the richest men in the world, one wonders why he doesn’t pay out more than he’s expected to if he thinks this way. But he also thinks it might not be good for business in the U.S. and doubted we could ever pass such a law.
“I wouldn’t be against a wealth tax,” he said. “Unless you get a lot of nations … dealing with some of the problems – like people leaving the country or how do you do these valuations that can get quite complicated … if society got behind a wealth tax, yes you can raise money that way.”
Leaving the Country
Essentially Gates is saying that you can certainly raise more money to pay for entitlements by taxing the rich, but it’s a complicated process. The entire society as a whole would have to get behind it for it to work. Otherwise, suddenly those costs will be passed down to the consumers. Extra costs already are.
Consider the trade war with China. Many opponents of the trade war look at the fact that costs are going up because the additional tariffs are being passed down to consumers. How do they not think the same won’t happen if the government dramatically increases taxes on these same companies?
The reality is, businesses are in business to make money, not pay for entitlements. If they don’t pass the buck down to us, then they will cut jobs or move out of the country. They certainly won’t stay where it’s not profitable to do business. Gates uses Europe as an example of where this happens often.
He says most European countries don’t implement a wealth taxes because it’s “too easy for wealthy people and businesses to pull up stakes and move to a new country.” Back in 1990, 12 countries had a wealth tax, but they were so difficult to manage and hurt the economy so much that now only 3 exist. Countries are dropping the wealth tax because it doesn’t make sense.
“The government is spending more than it takes in, so at some point … somebody is going to pay more in taxes and I do think that should be done in a progressive fashion,” Gates said.
