Bill Gates' Solution To Income Inequality
Chris Matthews, Oct. 15, 2014, Fortune
Gates shares Piketty’s goal of spreading wealth, yet he doesn’t want to discourage the uber wealthy (like Gates) who are taking risks, investing in value-creating businesses, and helping the world through philanthropy. Gates’ solution? Shift the American tax code from one that taxes labor to one that taxes consumption. Now, this sounds like standard, right-wing economic theory. Consumption taxes are usually favored by the wealthy and by conservative economists because they tend to be regressive in nature. Since everyone—rich and poor—have to consume some amount of goods and services, and because the proportion of income spent is much higher for the poor than the rich, consumption taxes like state and local sales tax burden the poor more than the rich.
But this doesn’t necessarily have to be the case. Economists like Cornell University’s Robert Frank have long advocated for progressive consumption taxes that could do much to solve what they perceive as the ills of growing income inequality.
Read more: www.fortune.com
Chris Matthews, Oct. 15, 2014, FortuneGates shares Piketty’s goal of spreading wealth, yet he doesn’t want to discourage the uber wealthy (like Gates) who are taking risks, investing in value-creating businesses, and helping the world through philanthropy. Gates’ solution? Shift the American tax code from one that taxes labor to one that taxes consumption. Now, this sounds like standard, right-wing economic theory. Consumption taxes are usually favored by the wealthy and by conservative economists because they tend to be regressive in nature. Since everyone—rich and poor—have to consume some amount of goods and services, and because the proportion of income spent is much higher for the poor than the rich, consumption taxes like state and local sales tax burden the poor more than the rich.
But this doesn’t necessarily have to be the case. Economists like Cornell University’s Robert Frank have long advocated for progressive consumption taxes that could do much to solve what they perceive as the ills of growing income inequality.
Read more: www.fortune.com
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