A person making US$40,000 a year is better off than someone who was making the same salary decades ago, because inventions like the internet have boosted the quality of life, Bill Gates, the world’s richest person, said.
The Microsoft Corp. co-founder said the US economy is strong and that it’s “just nonsense” to suggest existing tax rates restrain growth by discouraging innovation, Bloomberg reported.
The world’s largest economy is struggling to regain momentum, and tepid wage growth continues even as the unemployment rate has reached its lowest level since May 2008.
“It doesn’t mean we shouldn’t worry about middle-class incomes, but the comparisons overstate the lack of progress,” Gates said Sunday on CNN’s Fareed Zakaria GPS.
Gates scoffed at comparisons linking taxes and regulation to slower growth.
“The idea that there’s some direct connection, that all these innovators are on strike because tax rates are at 35 percent on corporations, that’s just such nonsense,” he said.
The nominal level of US corporate taxes is offset by elements such as overseas deferments and accelerated depreciation, Gates said.
“Corporate profit [tax] as a percent of US GDP … is 2 percent. It used to be 4 percent. That’s at a time when corporate profits are at an all-time high,” he said.
“What’s actually being paid is way less. And the notion that change in that nominal rate will unlock something, you know, overstates how you improve things.”
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