:format(webp)/cdn.vox-cdn.com/uploads/chorus_image/image/69120547/1057592778.jpg.0.jpg)
Billionaires like Bill Gates have long said that they, theoretically, would be in favor of paying much more money in personal taxes.
And yet Gates and some of the wealthiest people in the world are staying silent on a series of active proposals that would do just that, sidestepping a legislative package in their home state of Washington that targets them specifically.
Washington is home to four of the richest people on the planet: Gates, Amazon founder Jeff Bezos, Bezos’s ex-wife novelist MacKenzie Scott, and longtime Microsoft CEO Steve Ballmer. And the state in 2021 is also home to some of the most aggressive proposals to tax the ultra-rich, including a first-of-its-kind proposal to tax the wealth of billionaires at the state level.
All four of them have declined to campaign for the tax increase proposals, spurning requests to back the measures and staying on the sidelines.
“They have stayed very, very quiet during this conversation — and it’s not for a lack of trying,” said Noel Frame, the state legislator behind the wealth tax. “I talked to folks who talk to them, and they have chosen not to engage.”
Frame has approached her contacts with ties to the Gates, Ballmer, and Bezos families to see if the billionaires would be interested in publicly supporting her proposal. But she hasn’t even secured a meeting. Other pro-tax activists in Washington state say they have recently spoken with some of those families in recent months about the need, in general, for rate increases.
Asked about the wealth tax, Gates spokespeople didn’t return repeated requests for comment. A spokesperson for Bezos said his boss had no comment on the measure. And aides to Ballmer and the publicity-shy Scott didn’t return a request for comment.
Their silence and inaction bother some activists because Gates and Ballmer, at least, claim to support paying more in taxes. And yet it is relatively easy for a billionaire to say in a television studio or in a blog post that they, in theory, support a far-away, unlikely-to-ever-happen tax increase. Far more is on the line if they are asked to spend their social capital and proactively back a measure that is tangible and alive, working its way through the legislative chambers that they routinely prod on other matters they care about.
So in some ways, the measures in Washington state are a test of whether their rhetoric was just rhetoric — or whether they are prepared to back their beliefs up with muscle.
“Silence is consent,” said Chuck Collins, an inequality critic who collaborated with Gates’s father to push for higher taxes. “Here’s the proposal that your state legislature is considering. Yes or no? Where do you stand?”
These proposals are not all loony legislative long shots that are patently unworthy of their attention, either. The state Senate just narrowly passed the capital gains tax, a priority for Gov. Jay Inslee. And although the wealth tax proposal is seen as unlikely to become law this session, the measure was voted out of committee late last month, a sign that there is some momentum behind it, or at least credibility.
Both measures face their fates this month in the final days of the legislative session. Washington is one of the only states in the country without a state income tax, and progressives there have spent the last decade exploring ways to add new revenue streams, all of which would probably trigger legal fights.
More of the advocacy and energy in Olympia has revolved around the likelier-to-pass capital gains tax proposal, which takes a 7 percent cut off of sales of stocks or bonds in excess of $250,000. While it does not as narrowly target billionaires, it still effectively taxes the well-to-do. Anti-tax activists say it would make Washington, which does not have any capital gains tax right now, a less hospitable place for business.
The wealth tax proposal would levy a 1 percent fee on all assets over $1 billion, an attempt — like its national inspirations — to increase the tax burden that the ultra-rich pay. But critics charge that, unlike the national proposals, Washington state billionaires can easily move out of state and could do so if it passes, sapping Washington of any tax revenue from them at all.
“Why are you going to give these people a reason to make their economic domicile a different state?” said Matt McIlwain, who has helped organize the tech community against tax proposals and runs a venture capital firm that invested early in Amazon. “Come on, Bezos grew up in Texas and Florida. He’s got a bunch of operations and projects in his own life — not to mention different 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 battleground in the simmering fight over how much America should tax its richest citizens. The mega-wealthy are facing calls for higher taxes in part due to the pandemic, which has widened inequality. And so while passing a wealth tax through Congress is quite difficult, tax advocates are capitalizing on a vulnerability for the rich: They tend to live near one another, making state and local proposals a side door of sorts into achieving a similar outcome.
Gates, Ballmer, Bezos, and Scott have all gotten much wealthier over the last year when Big Tech stocks surged as the world relied more on tech companies. The foursome has about $500 billion in assets, according to tracking by Bloomberg. At the beginning of 2020, they controlled about $320 billion.
While recruiting billionaire endorsements is not a priority for either the pro-tax or anti-tax activists, Frame said she reached out precisely because it would rebut her critics’ arguments.
“Any time you have the affected taxpayer coming to the table and saying, ‘I’m okay with this change. I’m okay with this increase. Yes, please tax me,’ that’s always a coup,” she said.
Guided by his father, Bill Gates Sr., who served as the public face of a failed push 10 years ago for a state income tax, the younger Gates has been the most consistently vocal about wanting to pay substantially more in taxes. That’s been especially so in his home state of Washington, which he has said has “the most regressive tax system in the country.”
Gates has expressed concern that taxes could go “too far” — including, at times, wealth taxes. But, in general, he has said he supports substantially higher rates, including higher federal estate taxes and capital gains taxes, along with an institution of a state income tax in Washington, which it currently lacks.
“I think the rich should pay more than they currently do, and that includes Melinda and me,” Gates said in a year-end 2019 blog post about his views.
Ballmer’s tax views are more of a moving target, but he has in recent years voiced more and more comfort with increases. An avowed deficit hawk, Ballmer has stressed the need for a closer look at federal spending patterns. But he has also increasingly sounded more fiscally liberal in recent interviews, saying in 2019, for instance, “I certainly know that there are things I believe in that might require more” in tax revenue.
“Because I’ve been very fortunate, I can say to you I’d be happy personally to pay more taxes,” Ballmer said at a conference earlier this year.
Bezos, whose politics have been described as libertarian, has displayed an anti-tax streak: He, along with Ballmer, donated to a group a decade ago that opposed a measure trying to create a state income tax in Washington. And when Bezos said last week that he supported Amazon paying more in corporate income taxes to finance Joe Biden’s infrastructure plan, he didn’t offer anything about whether he backed paying more in personal income taxes — another part of the Biden economic package — to finance that same policy goal.
And then there’s Scott, who has the most limited paper trail on these policy questions. She has said nothing to date explicitly about taxes. She has, however, repeatedly expressed deep concerns about wealth inequality — reflecting recently on how the pandemic functioned as a “wrecking ball” for the poor while enriching billionaires, stirring a speculative belief from progressives that she may agree with them,
Activists on both sides aren’t necessarily surprised these billionaires have taken a pass right now. Some Washington political observers think billionaire non-engagement is only sustainable because the wealth tax currently faces long odds this legislative session. The capital gains tax on the cusp of becoming law took years of advocacy before it became a front-burner debate in the state.
And yet John Burbank, a longtime Washington tax activist who has met with Ballmer aides in recent months to discuss progressive state tax policy more generally, said he actually saw the billionaires’ inactivity and neutrality as a win for his side.
Why? Well, he said, at least the billionaires weren’t actively speaking out against the bill — as they might have in the past.
