Bill Gates Notoriously Calls for Higher Taxes on the Rich — But Here’s His Own Tax History

Bill Gates is one of the most famous billionaires in the world. Originally known as the tech genius who co-founded Microsoft, Gates is now the co-head of one of the largest philanthropic organizations in the world: the $77 billion Bill & Melinda Gates Foundation. His own personal net worth is estimated to be $108 billion, enough to rank him the 13th-richest person in the world according to Forbes.

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But unlike many billionaires, Gates calls out the American tax system as being decidedly unfair and in favor of the rich — and he wants to change it. As Gates put it during a 2023 “Ask Me Anything” session on Reddit, “I’ve been disproportionately rewarded while many others who work just as hard struggle to get by.”

But what is Gates’s own tax history, and how does he compare to other billionaires? And what exactly does he propose to change about the tax system?

One of the often-overlooked keys to building wealth is preserving it. It’s one thing to earn a big salary, but if you give it all away in taxes, it’s hard to become affluent. This is one of the edges that billionaires have over everyday working folks in America.

Salaried employees and wage earners have to pay ordinary income taxes on their earnings. Billionaires, on the other hand, tend to generate wealth through investments and inheritances. The way the current tax structure is set up, this penalizes lower- and middle-class Americans in comparison to the ultra-wealthy.

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In some cases, it’s really true that billionaires end up paying $0 in federal income taxes. Even Jeff Bezos and Elon Musk, the respective CEOs of Amazon and Tesla, have had years in which they were already billionaires and still paid $0 in federal income tax.

Many other important figures in the financial industry who may be lesser-known names to the general public, like Carl Icahn, George Soros and Michael Bloomberg, have also avoided paying any federal income taxes in the past, in some cases multiple times.

A 2021 analysis by ProPublica pointed out how this level of tax avoidance isn’t restricted to just a few individuals. The ProPublica data shows that from 2014 to 2018, the 25 richest Americans only paid a “real” tax rate of 3.4% on the wealth they gained over that period. Bloomberg’s rate was 1.3%, while Bezos’s was less than 1%.