Bill Gates on UBI: Government shouldn’t just write checks to everyone

By Business LeadersFOXBusiness

Does universal basic income make political sense?

TJM Europe Managing Director Scott Shellady goes through the pros and cons of Chicago reportedly testing universal basic income.

While Microsoft co-founder and billionaire philanthropist Bill Gates favors a more progressive tax structure, he doesn’t think universal basic income is an appropriate solution to the problems currently facing the U.S. workforce.

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Universal basic income (UBI) is a modern welfare scheme through which citizens are granted a consistent, livable income from the government, without condition.

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When asked during a Q&A on social media platform Reddit this week whether UBI could work – and if not how the U.S. should adapt to the way automation is transforming the workforce – Gates said we are a long way away from a “hyper-productive” world where work is no longer important.

“We still need people to work to produce the goods and services of society,” he said. “We are not rich enough to give up work incentives.”

Given the conditions Gates sees currently characterizing both society and the workforce, he added that experts can look into UBI, but there have to be other initiatives underway to lift those in need out of poverty.

“People can do the math on UBI and figure out what the costs would be,” he said. “I think we still need to focus [on] benefits on those in need - those who can't work or who need retraining. Admittedly this means [identifying] those people rather than just writing checks to everyone and government does this imperfectly.”

Gates made similar comments two years ago during another Q&A, where he said the U.S. is not “rich enough” to allow people not to work, though at the time he added someday the country will be.

At least one 2020 Democratic candidate – entrepreneur Andrew Yang – has proposed a universal basic income scheme to create a "trickle-up" economy.

While Gates doesn’t think the U.S. is ready to implement UBI in the near future, he does think there are ways the government could make the economy – through the tax code – more progressive. Gates has famously said that although he has paid $10 billion in taxes—he doesn’t think that it’s enough.

This week, Gates echoed those comments, saying he thinks the rich should payer a higher share of taxes.

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“A key element is making capital gains taxation more like ordinary income (some have suggested making them the same) and having an estate tax more like we had in the past (55 percent above $3.5 million),” Gates wrote on Reddit. "So yes I have paid $10 billion, but I should have had to pay more on my capital gains.”

The business leader, who is worth an estimated $96.8 billion, also recently said he does not “deserve” his fortune.