Memo to Conservatives: A Tax Increase on Bill Gates Is a Tax Increase On All of Us

Memo to Conservatives: A Tax Increase on Bill Gates Is a Tax Increase On All of Us
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A not infrequent refrain among the superrich is that they don’t pay enough in taxes.  Much as the truly beautiful revel in telling us how geeky, clumsy and unkempt they are away from the cameras, the very rich somehow get a charge from lamenting personal taxation that’s too light. 

Who knows why they do this, but it says here that this nonchalance is mostly a way for the beautiful and rich to absolve themselves of any guilt related to spending endless hours enhancing their looks and avoiding taxes.  Beautiful “geeks” can theoretically focus all of their energies on superficial qualities that shield them from geekdom, and an expressed affinity for taxes is a way for those of substantial means to cleanse any guilt related to their personal – and quite laudable - tax avoidance.

Hollywood embodies both qualities, loudly.  It’s breathtaking movie stars pay PR mavens handsome sums to create the impression that “they’re just like us,” and then those same stars (along with film directors and producers) regularly – and quite publicly – back political candidates who promise to make them “pay their fair share.” The film industry is near-monolithically in favor of tax increases in the rhetorical sense, but as evidenced by where movies are made, this same industry goes out of its way to squeeze every tax deduction and credit it can out of star-struck legislators in the U.S., and around the world.

Which brings us to Microsoft co-founder Bill Gates.  Up front, the world would be a much lesser place absent the genius of Gates.  His billions speak to staggering commercial advances that have saved a once dying city (Seattle), and that have profoundly improved living standards globally.  Importantly, none of what’s been mentioned is informed by Gates’s charitable endeavors about which the jury is still out.  Time will tell if Gates proves as expert at charity as he was at commerce.  Logic says he won’t be, but time will once again tell.

For now, it’s safe to say that Gates faces a much lower annual tax bill thanks to the Bill and Melinda Gates Foundation, which has assets of $41.3 billion.  And since much of Gates’s immense personal wealth is in Microsoft stock, it’s only taxed if he sells it.  About Gates shielding his wealth from the IRS, good.  Wonderful.  Excellent. Who knows what’s actually going through Gates’s cavernous mind, but his private actions signal a commendable desire to lower his tax bill.

At the same time, Gates’s public rhetoric reveals a man bothered that he doesn’t pay more in taxes.  Yes, Gates is the latest superrich person to lament that the tax code doesn’t penalize him enough. Ok, so what?

What’s bothersome about this isn’t Gates’s faux concern about his tax bill.  Again, this is what many well-to-do individuals who wisely shield their wealth from the tax man say.  Gates is acting just like a fashion model who claims her private interests tend toward the scientific.  Gates is acting normal in a sense.   

What is bothersome, however, is the frequent response of members of the right to this faux nobility.  When the superrich and super left wing bemoan their tax bills, conservatives invariably point out how nothing’s keeping them from paying much more, that it’s easy for lefties to make “voluntary contributions” to the federal government, etc.  This kind of thinking is very short-sighted, and certainly runs counter to conservative rhetoric about shrinking the size and scope of government.

Indeed, when Bill Gates pays more in taxes, whether voluntarily or involuntarily, we all suffer a major tax increase.  We do precisely because Gates is one of the richest, if not richest man in the world.  Stating the obvious, members of Congress don’t sit and stare lovingly at Gates’s dollars collected by the IRS.  More realistically, every dollar of Gates’s that reaches the federal government amounts to an extra dollar of federal control over the economy. 

The above speaks to why the 2017 Republican tax cut is rather overrated as a “cut.” As Dr. Bill Meisler put it to me in an e-mail, the alleged Republican tax cut amounted to “tax shifting.” Put simply, the Republicans raised taxes on certain corporations (those with foreign earnings), endowments and individuals (residents of blue states) in order to reduce them for others.  The problem there is that tax cuts are supposed to reduce the flow of dollars into Washington, and with the reduced flow, Washington’s control over the economy.  The GOP tax bill fails in this regard, so referencing it as a “cut” is a bit overdone. 

And for those who claim federal debt necessitates higher tax revenues, try to be serious.  For one, Congress’s track record of spending any extra revenues is near 100%.  For two, simple bond math tells us that rising federal revenues are a major reason Treasury is able to borrow so much as is.  If tax revenues were seen to be in long-term decline, so would federal borrowing be.  Markets are wise.   

Back to Gates, while it’s fun for conservatives to score points by exposing his hypocrisy, they’re in truth revealing their own when it comes to limiting the size of government.  Rest assured that Gates is well aware that he could voluntarily pay more taxes.  Thank goodness he doesn’t voluntarily do what conservatives encourage him to do, simply because we’d all suffer Gates’s careless destruction of his hard-earned wealth. 

To be truly credible in their pursuit of limited government, Republicans and conservatives need to make it their mission to reduce the federal tax burden on everyone, reduce the even bigger tax that is federal spending itself, and then they must cheer the presumed hypocrisy of the beautiful and rich.  Indeed, much worse than a lefty avoiding taxes is one who does not. 

John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading ( His new book is titled They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers. Other books by Tamny include The End of Work, about the exciting growth of jobs more and more of us love, Who Needs the Fed? and Popular Economics. He can be reached at  

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