ie, a billionaire's take on Piketty. A generous and philanthropic billionaire, for sure, but still a billionaire. Piketty didn't talk about philanthropy much because philanthropy is a very small amount of the economy. And he didn't push for a consumption tax because they suck all the liquidity out of the economy. He also mentioned a global tax on capital to show that it was the most direct way to correct the problems he outlined while at the same time pointing out that it was ludicrous to think that it would actually be a solution attempted by anyone. A good read, nonetheless. Thanks.
Ha! You basically beat me to saying the same thing. Of course Gates likes the two rich people who do things that he finds morally positive (and who resemble him) more than the guy he finds morally neutral. "Tax the rich more, but not me until I'm dead!" That said, I appreciate that he seems to understand Piketty's sentiment, although he's gonna have to do better than pointing to an AEI study to convince me that the world is not as unequal as Piketty, Stiglitz, Krugman, and all the rest say it is. Sure the world is better for poor people now than it was before. That doesn't mean it couldn't be a whole lot better for everyone given a different policy direction. Anyway, what's the difference if we tax wealth? The government can't tax you on what you don't own. A wealth tax might encourage more philanthropy, given that people might want to shed assets faster (although I do see problems of liquidity for some people, e.g. an entrepreneur whose company is worth $100M, but who is cash poor).
If I recall correctly, this was one of the prime drivers for Carnegie - the tax rate he was facing was so ruinous that he would have lost most of it anyway. That's the company, not the individual, and you don't tax a company on value, you tax it on revenue. (livin' it) A wealth tax might encourage more philanthropy
although I do see problems of liquidity for some people, e.g. an entrepreneur whose company is worth $100M, but who is cash poor)
This review is a pleasantly level-headed assessment, but I wish Gates expanded a bit more on the core issue of why high inequality is a problem. "messing up economic incentives" How does high inequality affect incentives differently than moderate inequality, which most people agree is acceptable? Extremely wealthy people do not buy up all the shoes. Firms do not abandon the giant market of individuals of modest means when very wealthy consumers appear. "tilting democracies in favor of powerful interests" This also happens at small scales and becomes more visible at a large scale. It appears to me a problem with democracy: it promises something it cannot deliver. Swatting down the most powerful special interests means the next tier of special interests will take over. Do we suppose they will cause less harmful distortion? "undercutting the ideal that all people are created equal" If an ideal is true, it can stand up for itself. Bill Gates himself proves the benefit that can accrue to the world when health, intelligence, connections, family resources, and luck defy the ideal and gather in one person. There is a potential down side here, of course, but there are far more wealthy philanthropists and benign art collectors than wicked CEOs bent on destruction.High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal.