Bill Gates, co-founder of Microsoft, has criticized the tax policies put forward by Rep. Alexandria Ocasio-Cortez (D-NY), saying that they miss the big picture and could lead to tax-dodging.
While on "The Vergecast" for verge.com, Gates, who has a net worth of $96.5 million, believed that while tax rates could be "more progressive," going to extremes like the one proposed by Ocasio-Cortez was unwise. The proposed tax would shave 70% off any income above $10 million.
The tax is the newest in a series of controversial policies proposed by Ocasio-Cortez, beginning with the Green New Deal this past week. The deal is an extensive collection of economic and environmental reforms and has been heavily criticized for being unrealistic, financially impractical and giving the government an invasive amount of power.
"In terms of revenue collection," said Gates, "you wouldn't want to just focus on the ordinary income rate, because people who are wealthy have a rounding error of ordinary income."
He continued, explaining: "They have income that just is the value of their stock, which if they don't sell it, it doesn't show up as income at all, or if it shows up, it shows over in the capital gains side. So the ability of hedge fund people, various people-they aren't paying that ordinary income rate."
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"The one thing that never gets much press-the IRS shows the statistics for the top 400 people of the highest income and the rate they pay," Gates went on. "Anyway, you should look at that. It's about a 20 percent rate, so it has nothing to do with the 39.6 marginal ordinary income rate. So it's a misfocus. If you focus on that, you're missing the picture."
Gates also weighed in on ideas that Sen. Bernie Sanders (I-VT) have supported, such as "modern monetary theory." Gates derided it as "some crazy talk," saying "It will come back and bite you."
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