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As Rich as Bill Gates

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What do Bill Gates, Warren Buffett and Paul Krugman have in common? Higher taxes for you. Mr. Gates believes that when tax rates are below 50 percent there’s room for additional taxation. That’s just great.  As long as they’ve made their money, right? Rolling Stone interview:

Rolling Stone: Let’s talk about income inequality, which economist Paul Krugman and others have written a lot about. As a person who’s at the very top of the one percent, do you see this as one of the great issues of our time? 

Bill Gates: Well, now you’re getting into sort of complicated issues. In general, on taxation-type things, you’d think of me as a Democrat. That is, when tax rates are below, say, 50 percent, I believe there often is room for additional taxation. And I’ve been very upfront on the need to increase estate taxes. Particularly given the medical obligations that the state is taking on and the costs that those have over time. You can’t have a rigid view that all new taxes are evil. Yes, they have negative effects, but I’m like Krugman in that if you expect the state to do these things, they are going to cost money.

Should the state be playing a greater role in helping people at the lowest end of the income scale? Poverty today looks very different than poverty in the past. The real thing you want to look at is consumption and use that as a metric and say, “Have you been worried about having enough to eat? Do you have enough warmth, shelter? Do you think of yourself as having a place to go?” The poor are better off than they were before, even though they’re still in the bottom group in terms of income.

The way we help the poor out today [is also a problem]. You have Section 8 housing, food stamps, fuel programs, very complex medical programs. It’s all high-overhead, capricious, not well-designed. Its ability to distinguish between somebody who has family that could take care of them versus someone who’s really out on their own is not very good, either. It’s a totally gameable system – not everybody games it, but lots of people do. Why aren’t the technocrats taking the poverty programs, looking at them as a whole, and then redesigning them? Well, they are afraid that if they do, their funding is going to be cut back, so they defend the thing that is absolutely horrific. Just look at low-cost housing and the various forms, the wait lists, things like that.

When we get things right, it benefits the entire world. The world’s governments don’t copy everything we do. They see some things we do – like the way we run our postal service, or Puerto Rico – are just wrong. But they look to us for so many things. And we can do better.

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.