Shipping News and Reviews

Tech billionaires are "very, very calm" about proposals for taxing their wealth

Billionaires like Bill Gates have long said that in theory they would be in favor of paying a lot more money for personal taxes.

Yet Gates and some of the richest people in the world are silent on a number of active proposals that would do just that, and bypassing a package of legislation in their home state of Washington that specifically targets them.

Washington is home to four of the richest people in the world: Gates, Jeff Bezos, founder of Amazon, MacKenzie Scott, ex-wife of Bezos, and Steve Ballmer, longtime Microsoft CEO. And the state in 2021 is also hosting some of the most aggressive proposals to tax the ultra-rich, including a unique proposal to tax billionaires' wealth at the state level.

All four have refused to advocate the tax hike proposals, reject requests to support the measures and remain on the sidelines.

"You've been very, very calm throughout this conversation – and it's not for lack of experimentation," said Noel Frame, the lawmaker behind the property tax. "I've talked to people who talk to them and they decided not to get involved."

Frame reached out to their contacts with ties to the Gates, Ballmer, and Bezos families to see if the billionaires would be interested in publicly supporting their proposal. But she hasn't even secured a meeting yet. Other pro-tax activists in Washington state say they recently spoke to some of these families over the past few months about the need for general rate hikes.

When asked about the wealth tax, Gates spokesmen did not return repeated requests for comment. A Bezos spokesman said his boss had made no comment on the measure. And the helpers from Ballmer and the audience-shy Scott have not returned a request for comment.

Their silence and inaction disturb some activists because at least Gates and Ballmer claim they are paying more taxes. And yet, it's relatively easy for a billionaire to say in a television studio or on a blog post that in theory they support a tax hike far away that is unlikely to ever happen. Much more is at stake when asked to spend their social capital and proactively support a measure that is tangible and alive, and work their way through the legislatures they routinely nudge on other matters that are important to them .

In a way, the actions in Washington state are a test of whether their rhetoric was just rhetoric – or whether they are willing to muscle their beliefs.

"Silence is consent," said Chuck Collins, an inequality critic who worked with Gates' father to ask for higher taxes. "Here is the proposal that your state parliament is considering. Yes or no? Where are you at?"

These proposals aren't just crazy legislative long shots that are obviously not worthy of your attention. The Senate narrowly passed capital gains tax, a priority for Governor Jay Inslee. And while the wealth tax proposal is unlikely to become law at this meeting, the measure was elected by committee late last month, a sign that there is some momentum, or at least credibility, behind it.

Both measures are facing their fate this month in the last days of the legislative period. Washington is one of the few states in the country with no state income tax, and the progressives have for the past decade been looking for ways to find new sources of income that are likely to lead to litigation.

More of the advocacy and energy at Olympia has centered on the proposal to pass capital gains taxes with a higher likelihood of cutting more than $ 250,000 in sales of stocks or bonds by 7 percent. While it doesn't target billionaires as closely, it effectively taxes the wealthy. Anti-tax activists say this will make Washington, which currently has no capital gains tax, a less hospitable place to be for business.

The property tax proposal would impose a 1 percent fee on all assets over $ 1 billion in an attempt – like its national inspirations – to increase the tax burden paid by the ultra-rich. However, critics accuse that contrary to national proposals, Washington state billionaires can easily move out of the US state and do so if they do, which leaves Washington with no tax revenue at all.

"Why are you giving these people a reason to transform their economic domicile into another state?" said Matt McIlwain, who helped organize the tech community against tax proposals and runs a venture capital firm that invested in Amazon early on. “Come on, Bezos grew up in Texas and Florida. He has a number of operations and projects in his own life – not to mention various aspects of what's going on in Amazon – in other states. He doesn't need Washington State to be his home state. "

The state is the latest battlefield in the smoldering battle over how much America should tax its richest citizens. The mega-rich face demands for higher taxes, partly due to the pandemic that has widened inequality. While running a wealth tax through Congress is quite difficult, tax attorneys capitalize on a vulnerability for the rich: they typically live close together and make state and local proposals sort of a side door to get a similar result.

Gates, Ballmer, Bezos, and Scott got a lot richer over the past year as big tech stocks rose as the world relied more on tech companies. The foursome has assets of around $ 500 billion, according to Bloomberg. At the beginning of 2020, they controlled around $ 320 billion.

While recruiting billionaire endorsements is not a priority for either pro-tax or anti-tax activists, Frame said she contacted precisely because it would disprove the arguments of her critics.

"Every time the concerned taxpayer comes to the table and says," I agree with this change. I agree with this increase. Yes, please tax me, it's always a coup, "she said.

Under the leadership of his father, Bill Gates Sr., who 10 years ago acted as the public face of a failed initiative for a state income tax, the younger Gates was the most resolute in saying that he wanted to pay significantly more taxes. This is especially true of his home state Washington, which has "the most regressive tax system in the country".

Gates has raised concerns that taxes could go “too far” – sometimes wealth taxes. But in general, he has said he supports much higher rates, including higher estate taxes and capital gains taxes, along with a Washington state income tax facility that currently does not exist.

"I think the rich should pay more than they do now, and that includes Melinda and I," Gates said in a late 2019 blog post of his views.

Ballmer's tax views are more of a moving target, but he has shown increasing comfort with increases in recent years. Ballmer, an avowed deficit hawk, has emphasized the need to look more closely at federal spending patterns. But in the last few interviews he has also sounded increasingly fiscal liberal and, for example, said in 2019: “I know for sure that there are things that I believe in that could require more”.

"Because I was very happy, I can tell you that personally I would like to pay more taxes," Ballmer said at a conference earlier this year.

Bezos, whose policies have been described as libertarian, has shown an anti-tax series: a decade ago, he and Ballmer donated to a group opposed to a measure to create a state income tax in Washington. And when Bezos said last week that he was helping Amazon pay more corporate taxes to fund Joe Biden's infrastructure plan, he didn't say anything about advocating paying more income taxes – another part of Biden's economic package – to finance this the same political goal.

And then there's Scott, who has the least paperwork on these political issues. So far she has not said anything explicitly about taxes. However, it has repeatedly expressed deep concern about inequality in wealth. She recently pondered how the pandemic acted as a "wrecking ball" for the poor while enriching billionaires at the same time.

Activists on both sides aren't exactly surprised that these billionaires just took a passport. Some political observers in Washington are of the opinion that the non-engagement of billionaires is only sustainable because the wealth tax is currently facing great opportunities in this legislature. The capital gains tax on the threshold of the law took years of advocacy before it became a state of debate.

And yet, John Burbank, a longtime Washington tax activist who has met with Ballmer aides in the past few months to discuss progressive state tax policies more generally, said he actually saw the billionaires' inactivity and neutrality as an asset to his side.

Why? Well, he said, at least the billionaires weren't actively speaking out against the bill – as they have in the past.

Comments are closed.