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The world's second-richest man is taking shots at Rep. Alexandria Ocasio-Cortez's income tax plan, saying it wouldn't actually target the vast wealth of many of the nation's richest people.
Gates, who amassed a fortune by building Microsoft, noted that many very wealthy people's earnings subject to income taxes make up a tiny fraction of their overall wealth – a 'rounding error of ordinary income' as he put it.
Tax - Rates - Politicians - Tax - Dodging
'I believe US tax rates can be more progressive,' he said. 'Now, you finally have some politicians who are so extreme that I’d say, “No, that’s even beyond.” You start to create tax dodging and disincentives, and an incentive to have the income show up in other countries and things.'
'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,' Gates said in a podcast on The Verge website.
Terms - Revenue - Collection - Income - Rate
'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 noted that hedge funders and other wealthy people are able to structure their finances in such a way that ordinary income is only a part of the picture.
'They - Income - Value - Stock - Income
'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,' he said, Fox News reported.
'So the ability of hedge fund people, various people — they aren't paying that ordinary income rate,' he noted.
Gates - Wife - Melinda - World - Philanthropists
Gates, who along with his wife Melinda have become some of the world's leading philanthropists, allowed that the tax code could be made 'more progressive,' but didn't spell out exactly how.
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