Congresswoman Alexandria Ocasio-Cortez has supported the idea of taxing income over $10 million at 70 percent, which is currently 37 percent
Bill Gates is in favour of "more progressive" taxes on the rich but feels Congresswoman Alexandria Ocasio-Cortez's proposed top-rate tax of 70 percent misses the point.
Ocasio-Cortez has supported the idea of close to doubling the tax on income over $10 million to 70 percent from the current 37 percent. The Microsoft co-founder, in an interview with The Verge, said this approach is a 'misfocus'.
"In terms of revenue collection, you wouldn't want to just focus on the ordinary income rate, because people who are wealthy have a rounding error of ordinary income. They have income that is just the value of their stock, which if they don't sell, doesn't show up as income at all. Or if it shows up, it shows over in the capital gains side," he said.
He added that lawmakers should focus on taxes on real estate and capital and social security. His view comes closer to Elizabeth Warren's tax reform which promotes taxing net worth on households worth more than $50 million.
"You do start to create tax dodging and disincentives, and an incentive to have the income show up in other countries and things. But we can be more progressive without really threatening income generation," he said.Wealthy people faced a similar tax in the 1970s before it was lowered during the term of President Ronald Reagen. Gates, who was the world's richest man on and off before Amazon's Jeff Bezos took the mantle, said this practice doesn't work very well.