Ya it's weird to me how Bill Gates nailed the problem so soundly but came to the typical uninsightful solutions that we've had in the US since 1980. Trickle down economics (where benefits are distributed by the private sector rather than government via taxes) is just not going to work in a world where income is decoupled from labor. In other words, as the value of human capital decreases, people without resources will have fewer means to raise themselves out of poverty. Paying no taxes won’t matter in a world where the unemployment rate is 10, 20, 50%. It will just exacerbate the concentration of wealth.

An alternative to all of this is to tax all financial transactions: whether to family members, religious organizations, political campaigns or between large institutions or countries. The idea being that in the end there is no real way to distinguish donation from income. Everyone would pay a tax on the difference in their net worth between the beginning and end of the year. The end result would be that people who accumulate large amounts of wealth would pay higher taxes than the majority of the country which is basically living a steady state existence. This also takes care of inheritance tax because children born to wealthy families would pay their income tax the year of their inheritance.

We’ve made a mistake in this country thinking that “the government” is small group of powerful individuals. That’s not how things started. Originally the government was the people, so things like tariffs were paid mostly by businesses as a way to fund public schools and infrastructure for everyone. People voted for tariffs so that they didn’t have to pay for government expenses out of pocket. Starting with the Civil War and then at the turn of the 20th century, that system got replaced by the income tax system we have today, and people have been swindled into paying for government excess (mostly in the form of military spending and tax breaks for industry) out of pocket again.

The gist of this is that framing “taxes” as an expense rather than an income is an effective way to get people to vote against their own self interest. People earning less than roughly $100,000 per year ($16 trillion GDP minus $2 trillion for government, divided by 140 million working Americans) don’t realize that they are short the thousands of dollars that they would receive if people making more than the average paid their fair share.

Consider if the tax rate was a flat 50%, with the excess above $2 trillion for government going to everyone as a basic income. Someone earning $30,000 pays about $5,000 today. But under the new system, there would be $7 trillion going to 300 million people, or about $23,000 per capita. So that person would pay $15,000, receive $23,000, so they would actually receive a credit of $8,000, for a total annual income of $38,000. That $13,000 difference between what we’re paying now and what we could be receiving is a major motivator for the Occupy movement, the Other 98% and similar groups. I find this way of looking at things to be much more inspiring than the usual “you pay us” knee jerk stuff coming from people who have profited from the current income tax system.