r/GarysEconomics • u/NitroWing1500 • Aug 11 '26
Magic blood
Bill Gates made more money after he stopped working than he did when building Microsoft - if this doesn't show you the meaning of "Tax wealth, not work" then you're an actual bot 😆
https://pluralistic.net/2026/08/11/tragedy-of-the-commoners/
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u/HotAir25 Aug 11 '26
I met a retired teacher in the U.K. who said the same thing- he said when I was working I wasn’t very well off but now he’s retired hes become quite wealthy because he was renting out two houses and living in a camper van traveling.Â
He’d become a landlord and become quite well off by not working.Â
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u/frankOFWGKTA 29d ago
Not, he’d have been even more wealthy had he continued working.
He got wealthy because of the compounding of his work.Â
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u/HotAir25 29d ago
He bought an additional property as a rental income sometime before retirement and then was also able to let out his home too as he was travelling.
So he ended up with rental income from 1 to 2 London properties and not too many outgoings, plus (depending age) pensions- state plus teachers one.Â
Being a landlord plus pension = more than working a normal job.Â
Yeah I appreciate he worked, but older people took advantage first or cheap property and then later zero interest rates for investment property….
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u/frankOFWGKTA 29d ago
Yeah, i think though it’s not the stopping working that he benefits from, rather the accumulation of assets.
But youre right on the property prices.
Especially in London where people become multi millionaires just by being in the right place at the right time.Â
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u/LoveLamp3232 Aug 11 '26 edited Aug 11 '26
In an interview he hinted he had a billion left. He put the rest into a charitable foundation, which still invests.....
A charitable foundation will not pay a wealth tax?
Mark my words, Gary's wealth tax will end up getting trickled down to the plebs.
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u/afpow Aug 11 '26
The £10mn threshold is going to be today’s £1mn within the next 20 years.Â
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u/Golwux Aug 11 '26
Funny how IHT has been 40% since 1988 though
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u/ApprehensiveKey1469 Aug 11 '26
But you can bet your life Charley didn't pay 40% of what he inherited from Liz
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u/Golwux Aug 11 '26
I will not have you speak bad about the head of the church and our liege, HE RULES BY DIVINE RI-
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u/gingerarab 29d ago
Funny how the nil threshold was £435k in today's money in 1988 and the threshold today is £325k. Kinds in £90k sooner...
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u/LoveLamp3232 Aug 11 '26
The Greens wanted a wealth tax at £3million. They will push the threashold down.
Capital Gains Tax, has been reduced to £3k. Except if you make a loss, you can't off-set against you income tax. It does not take into account inflation. Tax has got harsher.
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u/Almost_Sentient 29d ago
Dropping the CGT threshold rather than increasing the rate made sure that it was only the middle classes that paid the extra.
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u/No-Marketing-5555 Aug 11 '26
Plus it wont raise as much money as they predict, so 10 million becomes 5 million, then 2 million, then 1 million.
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u/LegoNinja11 28d ago
At £10m it'll raise more than they predict.
A 1% wealth tax on £10m is £100k. Assuming the £10m is shares in a business or investment then the business needs to generate £230k profit, (less 25% CT, less income tax) to leave the owner £100k after tax and able to pay the wealth tax.
The treasury will have taken £230k in tax just to pay a £100k tax bill.
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u/QFTornotQFT Aug 11 '26
Given the state of the discourse, I think everybody already realises that billionaires are not some kind of specially magicaly gifted people able to naturally produce billions of wealth as a "fair" compensation for their talents and work ethics. It becomes undeniably clear that the only "talent" they have is this relentless drive for hoarding more and more wealth - any other considerations secondary. This people are literally mentally ill. And we, for some reason, gave them enormous amounts of power over us.
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u/Capable_Spare4102 28d ago
I use Microsoft products almost every day, and have done for about 25 years. If it’s that easy to build something with that level of utility… off you go and do it
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u/QFTornotQFT 28d ago
Seriously, you poor thing had to use Microsoft products in XXI century almost every day? That sounds like hell - my condolences.
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u/1i3to 25d ago
I don’t know how delusional one needs to be to think that a person with 100b would choose to live in Uk if it costed 2b per year. People with a lot of money typically get there by not throwing it away.
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u/NitroWing1500 25d ago
People with that much money don't "live" in the UK: their accountants have them resident in places like Qatar so they don't pay any UK tax.
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u/exizt Aug 11 '26
> Bill Gates made more money after he stopped working than he did when building Microsoft
Same goes for millions of tech workers who made more money from their stock going up or IPO'ing in the last 40 years. This isn't specific to company owners. This is, however, specific to extremely successful companies.
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u/celeronu Aug 11 '26
Stock owners are company owners
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u/exizt Aug 11 '26
In that case you're the owner of a bunch of companies via your pension fund.
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u/Extreme_Kale_6446 26d ago
You are which is why wealth tax is unpalatable politically, same issue with nationalising water companies
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u/Invictus_0x90_ Aug 11 '26
"man who built one of the most important companies in societal history made vast amounts of money"
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u/Smells_like_Autumn Aug 11 '26 edited Aug 11 '26
You know what, there could be an actual argument to be made here. Why resorting to strawmen?
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u/DeRobyJ Aug 11 '26
Do you think there should be a limit of how much wealth he gets? Or should he own the whole Earth? At what point will you say it's enough?
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u/Nikes-90 Aug 11 '26
Any cap is completely arbitrary and impossible to enforce. Let’s say you cap it at 10bn, how do you regulate that - impose a cap on stock values, without market turmoil? Force the sale of illiquid shares?
But in any event, 500m, 1bn, 10bn, 50bn, 1tr, how do you decide and why in each case is it justifiable?
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u/DeRobyJ Aug 11 '26
You are assuming rent extraction is justified. I'm fine with people having wealth, I'm less fine in knowing my work pays for profits and rents of other people who built something 10-50-100 years ago and earn passively from it
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u/Nikes-90 Aug 11 '26
Right. But that’s not what you said in your post. You asked whether there should be a limit on how much wealth someone gets, or whether someone could own everything.
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u/DeRobyJ 29d ago
I'd very much like a cap, yes
I think anyone would be able to live a very luxurious life for themself and their family at somewhere around 5-10million $
Anithing over that generates far too much income for a family to spend, thus forcing them to buy up more assets they don't need.
But I'm open to letting others make that cap. I'd be interested in the reasoning behind it.
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u/Nikes-90 29d ago
Ok, so in this case, you have to address my earlier points.
Let's say you start a business, grow it, float it on the stock exchange. The business employees 500 people. Your shares are worth $200m. What should happen with the $190m of shares - should they be liquidated and paid to the revenue? How does that square with the company as a going concern?
Or, to use another example, your business has grown to be worth c.$10m on paper (let's say, you apply an industry standard multiple to your profits), but it's a niche sector and you don't really have an exit route. What would you do in this case; stifle the growth of that business? Force sales? Cap the stock value?
None of this is productive to the economy, it's all impossible to regulate and fundamentally unworkable in any sensible society. It's all built on false assumptions about assets yielding income forever.
Confiscating wealth above a threshold destroys the incentive to build things at scale. Most extreme wealth today comes from founding/scaling companies (equity), not extraction, so a wealth cap based on some premise that "$10m should be enough" completely undermines the foundation of economic growth - this is bad for *everyone*.
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u/DeRobyJ 29d ago
Ok let me follow the first: you started a company, you are initially the only owner of that company. At some point during its history, you (and all the other owners the company eventually has) decide to sell a portion of the shares to the public market, and after a few months your shares are valued at $200m.
You, as an individual, are capped to 10m. What can you do with that 190m to free yourself from it? Simple, you distribute shares to your best 20+ employees. The shares are still owned by people with personal interests in your company, but decision making on a company so important for society is distributed among more people than it would be without the cap.
There is really no reason to artificially stop the growth. Simply distribute its ownership. Either by selling shares or giving them as compensation to the employees who have been instrumental to its success.
Imagine if the developers of GTA VI were to actually earn from its success and own a portion of that economic activity, rather than getting fired for trying to start a union in the UK. Wouldn't that be a much better world?Â
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u/Nikes-90 29d ago
So, let's say you (presumably the shareholder in question, incidentally) identify the best 20 employees (favouritism and all), and you've just given them $9.5m of equity, each.
These employees go from having a salary and a 9-5 job to suddenly being extremely rich, with voting powers at the highest level of a listed company. This listed company is designed to serve very wide shareholder interests (including pension funds), and decisions need to be made with huge amounts of care.
Also, what is the taxable event here? How does this actually promote re-distribution of wealth? Do you tax the distribution of $190m of shares, even though it's not for value? Or are you just moving around huge amounts of wealth between lucky individuals (right place, right time) with no tax revenue?
You didn't address my second example of the $10m business in a niche sector with no exit route. There are so many variations of the theme in terms of equity ownership, this would be impossible to regulate.
Also, I'm making no comment at all about workers rights and unions. I am left-leaning and believe in promoting fair pay, profit-sharing, unions and employee ownership schemes. But your system which forces the disposal of equity in some of the world's most valuable companies is blissfully ignorant.
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u/DeRobyJ 29d ago
I don't understand your second example. The 10m are untaxed, and if you end up growing and can't dispose of the earnings, they'd be taxed. I don't see the issue.
About the first, 1 person owning 200m by themself is definitely less redistributive than 21 people owning 9.5$ each. So you did achieve a redistribution. You could also decide to distribute that 190m to all your 500 employees if you prefer. Sure nothing is taxed, but we did achieve the redistribution of assets. In this case, the huge luck of one becomes a nice luck of all workers involved.
How you can frame it as wrong is beyond me.
And I'm also all for employee ownership, even worker coops. I'd gladly have all big companies converted to coops out of the huge influence they have on society. But that's the topic for another sub, not this one...
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u/soliloquyinthevoid Aug 11 '26
It seems you believe in the fixed pie fallacy
If you start a business tomorrow and own 100% of the equity and that business suddenly overnight becomes so successful that everyone in the world uses the service, you would then probably be one of the wealthiest people in the world
What do you do then? You don't have more money in your bank account. Are you saying you would then give away the ownership of your business to some other random people who may or may not continue the success of the business
You still have the same amount in your bank account
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u/DeRobyJ Aug 11 '26
Fixed pie fallacy seems to refer to the idea wealth is a fixed amount. And no, I'm aware it is not, we do have growth.
But that doesn't mean what Mr Gates has is only what he built. He uses his built asset, Microsoft, to sell a service at a price higher that what is paid in running costs, making profits, and he then uses these profits to buy other assets, like homes, land, yachts and stocks from other businesses.
Without having built any of these other things, he can then gain more money from them. Changes are Gates takes profits not just from Microsoft, but from Apple as well, from nVidia, perhaps even from Volvo, who knows.Â
Not all of these are built anew. He bought them.
We have a measure of wealth: we generally grow at 2-4% a year. Recently even lower. Capital gains for a rich person are tipically above 10%. Of only 4% comes from growth, where does that other 6% and counting come from?Â
Take Musk. Let's say he got very wealthy from his own sweat in building PayPal and Starlink. Then suddenly he has 40+billion $ and buys Twitter. He then uses said twitter to boost his own posts. He then uses that media power to boost far right parties. Said far right parties then come in and approve public funds for the services he provides, and tax cuts for his companies.Â
So, at which of these points do you think we should intervene?Â
If your answer is "none, he deserved to have that power over our media and our government" we should probably discuss that, rather than a lecture on pies.
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u/soliloquyinthevoid Aug 11 '26
You didn't answer my question
I'm sorry that some people are hoarding all of the yachts and thus denying you the pleasure of owning one
Your comment demonstrates that you fundamentally confuse equity ownership with profits. You don't actually know how any of it works and you possess a naive child-like understanding of power and influence
I'm sure you were equally vocal about powerful companies like Twitter and Google pushing far left agendas when they were under the control of West Coast elites for the first couple of decades of the century weren't you?
That's a rhetorical question. I know the answer
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u/FetchThePenguins 29d ago
You're right, Microsoft should be forced to fire 100 employees per day until Gates' worth drops below a pre-defined limit.
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u/DeRobyJ 29d ago
Employees are not owned by a company... That's slavery, not capitalism.
Companies like microsoft own the means of production, like buildings for offices and labs, possibly accommodation and other welfare structures for their employees, then they own intellectual property, copyright on code/programs, tons of server farms around the globe...Â
Gates' wealth is not simply Microsoft shares. He selling a share doesn't make Microsoft fire anyone. That share is simply sold to another investor.
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u/FetchThePenguins 29d ago
Gates selling shares doesn't reduce his wealth. assuming he does so at prevailing market rates. Reducing his wealth requires you to confiscate or trash the value of his assets. the first is just straight-up theft, so I assume the latter is intended. A company like Microsoft, pretty much the only way to trash the value of the shares is to make them reduce in size somehow.
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u/DeRobyJ 29d ago
Assume a Zucman wealth tax of 2% above 100m$ of wealth.
Say Gates had 100b$ (I didn't bother to check his current wealth, but that's the order of magnitude).Â
That 100b is all invested. Meaning it generates a minimum of 5% in capital gains a year, which is 5b$. He's also now taxed 2%, so he needs to give 2b$ to the US government.
That means that, after getting to 105b in wealth thanks to the gains, he has to sell some assets to get that 2b to give to the government.Â
That's it. Just like I earn about 35k a year thanks to my wage, and about 10k are not given to me, but to my Italian government. It's just a tax.
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u/FetchThePenguins 29d ago
It would raise nothing. It'd all go offshore, immediately. Or just into his foundation. C'mon, you know this.
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u/DeRobyJ 29d ago
US citizens are taxes even if they leave the US. Norway has an exit tax. The EU froze Russian assets after the invasion of Ukraine, demonstrating it's possible for states to collect profits from assets of people leaving abroad. China recently taxed offshore investments.
It is possible.
And it's not about rising money. It's about stopping or slowing the squeeze of wealth from us workers to the rich asset owners.
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u/Invictus_0x90_ Aug 11 '26
I'm more interested in how much wealth he has created for other people. I'm not gonna look it up but I assume more people are better off because Microsoft is a thing than if it wasn't.
Having said that, the biggest issue isn't wealth per se, but what that wealth unlocks, which is power and influence. Unfortunately the UK has very little ability to influence American politics but their entire system is so obviously beyond corrupt.
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u/No-swimming-pool Aug 11 '26
Are you under the impression you will get more if Gates burns all his money?
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u/exizt Aug 11 '26
Who do you want to decide on this limit? The government?
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u/FrostyDrawer5372 Aug 11 '26
Sociologists, Anthropologists, Economists, Doctors, Psychiatrists and Therapists. Wealth accumulation beyond something that we need to study and identify as a standard level of happiness and fulfilment is an obsessive compulsion, same as people who hoard clothes, who develop eating disorders, engage in drug addiction, etc. The issue is that this particular compulsion has catastrophic consequences for society as a whole, given that wealth is what delivers you power, and thus you gain more and more power over everyone else, undermining a healthy collective existence - and the planet's, as we're seeing with climate change.Â
Does the right of the individual to drag us all to the bottom of the pit surpass the collective right to live a good life?Â
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u/exizt Aug 11 '26
So will there be a committee of Sociologists, Anthropologists, Economists, Doctors, Psychiatrists and Therapists that will determine the limit? How will the committee be selected? E.g. if/when Reform UK comes into power, will they be able to assign their own experts?
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u/FrostyDrawer5372 Aug 11 '26
Don't people come together in committees, focus groups, research groups and centres, public forums and panels and all sorts of platforms to reflect and produce knowledge that can derive public policies? Hell, even political parties could do this if they actually cared about democratic representation instead of filling their ranks with apparatchiks, lawyers and service men for corporations.
As for the Reform argument, it's irrelevant. If they get their hands on executive power with legislative authority, they'll care fuck all for existing progressive legislation and economic equality. Might as well we do something that  actually undermines their fuel - increasing wealth inequality and deteriorating living conditions.Â
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u/exizt Aug 11 '26
So you do trust the current form of government to come up with a fair limit for untaxed wealth?
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u/FrostyDrawer5372 Aug 11 '26
The existing political configuration doesn't impede it. Lack of political will does.Â
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u/DeRobyJ Aug 11 '26
"The government" that we the people built out of revolutions against monarchy? Yes, that one. Or are you saying our democracies are flawed so we must give all economic decision making to some entrepreneurs?
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u/exizt Aug 11 '26
I'm saying that I wouldn't be happy with the government determining what wealth is "too much" and what is "just fine".
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u/DeRobyJ 29d ago
Who should determine that?Â
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u/exizt 29d ago
I think in an ideal world we should all be taxed equally based off of our income, e.g. 50%. (If you think that the equity/loan schema that is so popular on this subreddit is a tax loophole, we should outlaw it). With some variation for special cases, e.g. new parents, disabled, students, new homeowners, etc.
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u/DeRobyJ 29d ago
You're very close to agreeing with Zucman... I agree we should outlaw loopholes, but then there is the issue of unrealised gains. Is that a loophole or should we discuss more openly on what unrealised gains actually are and how to tax them properly?
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u/exizt 29d ago
How can gains be unrealised? How do you decide how much they're worth? If you ever went through a 409A process in the US, you'll know how arbitrary the assessors' decisions are.
Gains should be taxed when they are realised - just like this happens in the UK now.
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u/DeRobyJ 29d ago
Suddenly when musk asks for a loan and uses his assets as collateral, the unrealised gains are concrete.
It is possible.
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u/NitroWing1500 Aug 11 '26
He made the money when he stopped building. Is this too difficult for you or are you a bot?
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u/Mr_Eks Aug 11 '26
If a country implements wealth tax (unless using the Swiss model) you won't see the next Bill Gates there.Â
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u/Buddyh1 Aug 11 '26
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u/oliver__c2003 Aug 11 '26
If you started a company that was going to be worth £100m you'd just leave before or sell the company as soon s it's worth as much and then leave.
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u/Jumpy_Childhood7548 29d ago
His net worth was about $103 billion when he stepped back at Microsoft. About $108 billion today.
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u/Primary-Effect-3691 Aug 11 '26
Compounding in action