Earlier I caught up with Bill Gates, the founder of Microsoft. He made money beyond the dreams of avarice and decided some years ago to spend much of it improving the lives of others in the developing world. I wanted to know what he felt about foreign aid and the gap between rich and poor.
JP (to BG): When you hear that statistic from Oxfam that the poorest half of the world own about as much as the 85 richest, including you of course, does that make you feel uncomfortable?
BG: Well we... What makes me uncomfortable is that children die, that people don't get a good education, they don't get enough nutrition and that's what I've devoted my life working on. So all the money in my hands is going against those problems.
JP: But you don't deny that the gap between rich and poor seems to have got worse?
BG: The gap between rich and poor has not gotten worse, thank goodness. Less children are dying, people are living longer, people are more literate. If you go back far enough, everybody was poor. Ahh. If you want everybody to be the same like 200 years ago when life was very short, a third of all children died before they were five years old. That was an age of strong equality.
JP: Do you think that enough is being spent on international aid?
BG: I'd like to see that increased. Particularly the programs where you are buying malaria bed nets and you're preventing deaths there. You're buying vitamin A. You'r buying AIDS drugs. You're inventing new seeds that are more productive; giving them out (and) teaching the farmers how to use them. We've seem phenomenal benefits in the aid programs that we're partnered in.
JP: You're a notable philanthropist of course. Much of this aid is government aid. Why is it the business of taxpayers in the United States, or in Britain, or anywhere else in Europe or anywhere else in the world to spend money on poorer people in poorer countries?
BG: Well you have to decide whether the lives in, say, Africa have any value or not. Do you, you know, as we see them starving, not having enough nutrition; not having access to vaccines; having disease where there's more money spent on curing baldness than on a disease that kills a million children - does this bother us or not? Are we willing to take, in the case of the UK less than 2% of all government spending [see below] and have it go towards the very poorest, which in fact is very generous?
JP: You could completely alter the picture of the world if you went for a genuine redistributive system in taxation. Could ..
BG: You mean like North Korea?
JP: No, I do not mean like North Korea! I mean by democratic consent.
BG: Well yeah ..
JP: You could do that.
BG: Yeah we have many democracies, they all have different taxation policies. The Nordic countries have certain taxation policies, the UK has different ones. I'm not an expert on any but the US.
JP: Would you favour in the US a higher rate of personal taxation?
JP: To what level?
BG: That's fairly complicated to pick an exact level but I've been a big proponent of the estate tax and I do believe that income on capital - we could tax that a bit higher.
JP: And when you saw the results of the Senate's investigations into Microsoft's tax affairs and the allegation that about $4million's worth or taxes a day was't being paid because of the way that Microsoft managed their affairs; what did you think?
BG: I think that's about as an incorrect characterization of anything as I've ever heard.
JP: It was the allegation that was made.
BG: No, no. It's just simply hogwash.
JP: Which aspect is hogwash?
BG: The idea that Microsoft didn't pay its taxes.
JP: It's not that Microsoft didn't pay "taxes"; it's that they could have more taxes
JP: Yes, by choosing to organize their affairs differently rather than running them through Puerto Rico.
BG: Yea, your numbers are just completely wrong so ..
JP: Alright, let me put it a different way. As a statement of principle, are you in favor of people paying as much tax as possible?
BG: I think if you're ... governments should pass the tax laws they need in orderI to collect the revenue they want to collect. I don't think that saying people should volunteer to pay taxes is likely to raise that much. It can be tried. You know, the rules are set. I've paid more taxes than any individual ever and gladly so - I should pay more but I've paid over 6 billion in taxes.
JP: How do persuade people that it's their political or moral duty to pay more tax in order that there can be some sort of redistribution?
BG: You, you make sure that they follow the law and pay their taxes because if they don't you put them in jail. It seems to work.
JP: Bill Gates, thank you very much.
* the "under 2%" quoted is for government aid and amounts to the UN target of 0.7% of GDP.
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