The former Microsoft CEO did not name the Democrat Congresswoman in his podcast appearance, but said proposals to raise taxes on higher income brackets were misguided.
Gates said that he was in favour of “more progressive” taxes on those in the elite bracket of wealth but argued that simply raising the top marginal tax rate would be a mistake.
Democrat Ocasio-Cortez has advocated raising taxes on income over US$10 million to 70%. Currently, US residents in that top bracket pay 37%.
Bill Gates: Tax plans like Ocasio-Cortez’s are ‘extreme’ and ‘missing the picture’ https://t.co/NKR5P6Oq8G
— MarketWatch (@MarketWatch) February 12, 2019
Gates favours progressive tax reform but says focus should not be on income
Gates told The Vergecast podcast that such a change would be “a misfocus.”
“If you focus on that, you’re missing the picture,” he said, adding that for most mega-wealthy individuals, income is only a small percentage of their total wealth. Instead, people with an ultra high net worth can sell stocks and other assets, adding to their wealth but not their taxable income.
The iconic business magnate and philanthropist also dismissed “modern monetary theory” as “crazy talk”. The theory has been embraced by progressive US politicians such as Bernie Sanders and Ocasio-Cortez, and, curiously, President Donald Trump. It dictates that governments should not be concerned about deficits because they control the printing of their own currency. This leads to the conclusion that inflation should instead be managed with interest rates.
More generally, Gates said that the debate over taxing the mega-wealthy was a necessary one. He advocated for tax reform to instead focus on estate tax, Social Security and taxes on capital.
“I think it’s fascinating that for the first time in my life people are saying, ‘Okay, should you have billionaires?’ ‘Should you have a wealth tax?’” the former Microsoft CEO mused. “I think it’s a fine discussion.”
— The Verge (@verge) February 12, 2019
Rising star Ocasio-Cortez has made waves with her tax reform proposals
Gates currently has a net worth of US$90 billion, making him the second wealthiest individual in the world behind Jeff Bezos. He has also given away tens of billions of dollars to charities addressing the AIDS crisis, poverty, sanitisation and medical research.
Ocasio-Cortez recently launched the ambitious and wide-ranging ‘Green New Deal’, which aims to address the impact of climate change while creating new swathes of jobs.
Her proposal to raise the marginal tax rate for those earning more than US$10 million per year to 70% has been hotly debated, though polling suggests it has widespread public support. . Unsurprisingly, however, it has been generally opposed by billionaires and at the recent World Economic Forum in Davos, Scott Minerd, Global Chief Investment Officer at Guggenheim Partners, called the possible tax hike “scary”.
While she has only recently been elected to Congress and is too young to run for President at 29 years, Ocasio-Cortez is a social media phenomenon and is already shaping one of the party’s most visible and influential public figures. She is widely considered to be a future leader and filmmaker Michael Moore recently said Ocasio-Cortez is already the de facto leader of the left.