Bill Gates and other billionaires live off the poor, says Steyer

Bill Gates and fellow rich folks knocked for claiming to be self-made

By Jeph Ajobaju, Chief Copy Editor

Wealth accrued by the uber-rich, including Bill Gates, is off the sweat of “millions of poor people”, says Tom Steyer, himself a billionaire, who is pouring a blast of cold water on the notion of a self-made billionaire.

Steyer, a hedge fund capitalist and former 2020 Democratic presidential candidate, spoke about the former Microsoft CEO against the background of earlier reports that the most wealthy in the United States hardly pay tax.

An expose in June by ProPublica, an investigative website, named Jeff Bezos, Elon Musk, and Warren Buffet among those who exploit tax loopholes like Donald Trump to avoid paying little or no tax.

Steyer’s remarks come as taxes on wealthy individuals remain a key sticking point in negotiations among Congressional Democrats over a spending bill that would expand social services and accelerate the U.S. response to climate change, per Yahoo Finance reporting.

The measure, which initially aimed to raise taxes on wealthy people as a central source of revenue, could end up reducing their tax bill, if the law includes a proposed repeal of the $10,000 cap on the federal deduction for state and local taxes, known as SALT, the bipartisan Committee for a Responsible Federal Budget found in an analysis released in October.

Steyer, who supports raising taxes on the wealthy, said company founders deserve to benefit from lucrative ventures. But he acknowledged that their success owes to a working class of millions who made it possible for them to flourish.

“I have always thought that the capitalist system should reward people for coming up with ideas and products that make other people’s lives safer, healthier, more fun, more productive,” he says. “Absolutely.”

“Having said that, do I also think that those people when they succeed – when a Bill Gates succeeds, did he create Microsoft? Yeah, at some level he did. But he did it within a system that other people, millions of poor people, millions of unassuming people, had dedicated their lives to create.”

“So he was building it – you know the old saying — standing on the shoulders of giants,” Steyer adds.

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Pandemic makes billionaires even richer

The wealthiest 400 American families paid an 8.2 per cent average rate on federal income taxes from 2010 to 2018, according to an analysis released by the White House in September.

The tax rate for the wealthiest families over that period fell below the average 13.3 per cent tax rate paid by US families in 2018, the Tax Foundation found.

Many of the wealthiest Americans give away large sums to charity. Bill and Melinda Gates have given nearly $37 billion to the Gates Foundation, a philanthropic organization that fights poverty and disease across the globe.

At the COP26 climate summit last week, Bezos, Amazon CEO, pledged $2 billion for restoring natural habitats and addressing flaws in the food system.

The COVID-19 pandemic has coincided with a rise in average CEO compensation as well as an explosion in income among America’s top-earning CEOs and its wealthiest individuals.

Eight of the highest-earning executives each received compensation last year worth more than $100 million. In 2019, only one executive reached that threshold, according to a survey conducted by consulting firm Equilar for The New York Times.

Moreover, the richest 1 per cent of Americans own roughly 16 times more wealth than the bottom 50 per cent, Federal Reserve data for the first quarter of 2021 showed.

The fortune of U.S. billionaires has grown $2.1 trillion during the pandemic, boosting their collective wealth by 70 per cent, according to the left-leaning Institute for Policy Studies.

No lone rangers

Yahoo Finance reports that Steyer rose to prominence as the founder and senior managing member of hedge fund Farallon Capital Management, which he departed in 2012.

Since then, he launched the voter engagement organization NextGen America and became a leading advocate on environmental issues.

Wealthy people take on a duty to those who built and sustained the society that enabled their success, Steyer says.

“You have huge obligations, responsibilities, and debts to your fellow citizens who have done so much,” he says.

“That teacher, that soldier, that nurse who’ve done so much to create a system that is safe for you to go write some code, and make a ton of money.

“So let’s just be clear, we’re in this together. Nobody is going to succeed the United States of America without everybody else succeeding.”