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Before you lionize a convicted monopolist ... 1) The USA tax code encourages wealthy people to create foundations. The money in the foundation is still control

Before you lionize a convicted monopolist ... 1) The USA tax code encourages wealthy people to create foundations. The money in the foundation is still controlled by them and has tax benefits. 2) In other countries, wealthy people are taxed to provide social services like education and healthcare. In the USA, they're not - the capital gains rate of 15% is basically a round-off error compared to 90% last century. 3) Foundations work very well for tax planning. Who knows what their efficiency is as charity?

deleted 10y ago
[deleted]
the_economist 10y ago
The capital gains tax rate is not 15%. It is 20%, plus a 3.8% Obamacare tax. So Bill Gates is probably paying 23.8% on investment profits. Here in California there is a lovely 13.3% tax, bringing the total to 37.1%. Bill Gates is a resident of Washington, though, so he doesn't pay that. You can't blame Washington for not having a state income tax, though. Their tax laws seem to have worked out very well for them in attracting companies like Microsoft and Amazon.
strommen 10y ago
"Convicted monopolist" really doesn't have much of a ring to it. Especially when the only thing his company was ever found guilty of was bundling a web browser with the OS...
- deleted 10y ago
  [deleted]
- mcguire 10y ago
  How many copies of Windows have you paid for but never used? I have been running Linux on my personal machines since the early '90s. I try not to think about it.
  - WalterBright 10y ago
    There are many apps on my iphone that came bundled with it that I never use. I'm a bit surprised. Most people in the 90's that I knew who ran Linux either repurposed an old machine to it that would otherwise have been scrap, or assembled a machine from parts. In neither case did they buy a Windows license for it. I remember an Amazon employee telling me that it was hard to buy a Linux machine without Windows on it. I pointed out that Amazon at the time was selling a Linux machine buyable with "one click". Anybody could make and sell CPUs without a license from Microsoft. It wasn't hard at all (just buy the components in bulk). Nor was it illegal. The issue was that people wanted to buy Windows machines.
    - mcguire 10y ago
      The issue was that people wanted to buy Windows machines and Microsoft's licenses said that, if a company wanted to sell any copies of Windows, then every machine they sold had to have a copy of Windows installed. There were very few pre-installed Linux vendors (and still are) prior to the Netscape lawsuit, when Microsoft purportedly dropped the requirement. I never really repurposed any old machines; I've always been a Unix guy, so I went from an old Amiga to Linux as the first desktop Unix I could get. (I have a floppy with 0.99pl14, the first kernel I ever built, here somewhere...) I've also built my share of machines, but that never really worked for laptops. Plus, I'm old and tired.
      - WalterBright 10y ago
        If vendors could make money selling Linux machines, they would have. Like I said, it wasn't hard to get into that business. Even a niche business can be very profitable if it is not served by the rest of the industry.
geomark 10y ago
People fail to understand the difference between innovation driven monopoly and government enforced monopoly. The former is commendable, indicating that a company has developed a product so useful that it becomes so widely adopted as to become a monopoly. Nobody is forced to buy the product - people just find it so useful that the it dominates in the marketplace. And there is nothing preventing the rise of a competitor other than the monopolist's success. Got enough smarts and money to beat them? Then go for it. That's quite different than when a company uses regulatory capture to get regulations passed that maintain their monopoly and block competitors.
- eggy 10y ago
  I understand that, and I like the label of Corporatism when it is a big company colluding with the state, as opposed to Capitalism, which is for all its good and bad, better than the alternatives right now.
  - geomark 10y ago
    Yeah, I guess those are pretty good labels. I looked for a succinct definition of Corporatism: "the control of a state or organization by large interest groups." That happens in every economic system, not just capitalism.
- pasquinelli 10y ago
  how does a company innovate themselves into a monopoly? what's stopping others just copying their innovation and competing with them?
- onebigbug 10y ago
  You haven't listed all the possible options for obtaining a monopoly, though, including the one Microsoft was convicted of. In addition to creating a better product and by controlling the government, you can also engage in tying, whereby you have a monopoly (perhaps rightfully gained through innovation) and use it to gain a monopoly in another area by forcing customers to buy both together, you can sell at a loss until your competitors go out of business and then raise the price, you can collude with other companies to fix prices, or to only service certain areas or sectors. Having a monopoly is not illegal, exploiting your position as a monopoly to maintain it is. That is what Microsoft did.
eggy 10y ago
True, and people tend to villify those they are envious of, or because they don't align with their views. Nobody is spotless, and if you think you are, your mirror is dirty. You can find bad about Jobs, Gates, Jesus, the Bible, the Quran, anything and anybody if you look hard enough. I think Gates is genuinely a decent human being, and does a lot of good; he puts his money where his mouth is. So there may be a million great souls who do not, or cannot contribute money or time. At least, whether you think ill of him or not, the effect is he has helped many, many people. You should weigh this against your accusations.
kusmi 10y ago
I worked for the Gates foundation as a researcher. I don't claim objectivity. My impression of the division I worked in was that it was poorly managed, very political, had little oversight from the big man himself as far as I know, and most importantly that it will not accomplish any of the goals it set out. Despite everything there was a lot of patting on the back and pretty words, with zero meaningful progress.
- FreeInternet 10y ago
  Internet is no longer free. After http://www.thedailybeast.com/articles/2016/04/21/hillary-pac-spends-1-million-to-correct-commenters-on-reddit-and-facebook.html?n=2 http://www.thedailybeast.com/articles/2016/04/21/hillary-pac... I have trouble believing any account I read. You may be right but corruption is so rampant that you'll have to forgive me for my skepticism
zamalek 10y ago
> Who knows what their efficiency is as charity? That's exactly what the article explores.
mike2477 10y ago
I think it's a little outlandish to suggest that Bill Gates started the Gates Foundation in order to make more money or save on tax breaks. Did he do it for his ego? Maybe. But it'd be hard to find someone who has done great work who didn't do it for their ego. Being a skeptic in an internet forum is easy. Solving problems that The Gates Foundation has set out to solve isn't. I'll continue to lionize those who do the latter.

deleted 10y ago

[deleted]

the_economist 10y ago

The capital gains tax rate is not 15%. It is 20%, plus a 3.8% Obamacare tax. So Bill Gates is probably paying 23.8% on investment profits. Here in California there is a lovely 13.3% tax, bringing the total to 37.1%. Bill Gates is a resident of Washington, though, so he doesn't pay that. You can't blame Washington for not having a state income tax, though. Their tax laws seem to have worked out very well for them in attracting companies like Microsoft and Amazon.

strommen 10y ago

"Convicted monopolist" really doesn't have much of a ring to it. Especially when the only thing his company was ever found guilty of was bundling a web browser with the OS...

deleted 10y ago
[deleted]
mcguire 10y ago
How many copies of Windows have you paid for but never used? I have been running Linux on my personal machines since the early '90s. I try not to think about it.
- WalterBright 10y ago
  There are many apps on my iphone that came bundled with it that I never use. I'm a bit surprised. Most people in the 90's that I knew who ran Linux either repurposed an old machine to it that would otherwise have been scrap, or assembled a machine from parts. In neither case did they buy a Windows license for it. I remember an Amazon employee telling me that it was hard to buy a Linux machine without Windows on it. I pointed out that Amazon at the time was selling a Linux machine buyable with "one click". Anybody could make and sell CPUs without a license from Microsoft. It wasn't hard at all (just buy the components in bulk). Nor was it illegal. The issue was that people wanted to buy Windows machines.
  - mcguire 10y ago
    The issue was that people wanted to buy Windows machines and Microsoft's licenses said that, if a company wanted to sell any copies of Windows, then every machine they sold had to have a copy of Windows installed. There were very few pre-installed Linux vendors (and still are) prior to the Netscape lawsuit, when Microsoft purportedly dropped the requirement. I never really repurposed any old machines; I've always been a Unix guy, so I went from an old Amiga to Linux as the first desktop Unix I could get. (I have a floppy with 0.99pl14, the first kernel I ever built, here somewhere...) I've also built my share of machines, but that never really worked for laptops. Plus, I'm old and tired.
    - WalterBright 10y ago
      If vendors could make money selling Linux machines, they would have. Like I said, it wasn't hard to get into that business. Even a niche business can be very profitable if it is not served by the rest of the industry.

geomark 10y ago

People fail to understand the difference between innovation driven monopoly and government enforced monopoly. The former is commendable, indicating that a company has developed a product so useful that it becomes so widely adopted as to become a monopoly. Nobody is forced to buy the product - people just find it so useful that the it dominates in the marketplace. And there is nothing preventing the rise of a competitor other than the monopolist's success. Got enough smarts and money to beat them? Then go for it. That's quite different than when a company uses regulatory capture to get regulations passed that maintain their monopoly and block competitors.

eggy 10y ago
I understand that, and I like the label of Corporatism when it is a big company colluding with the state, as opposed to Capitalism, which is for all its good and bad, better than the alternatives right now.
- geomark 10y ago
  Yeah, I guess those are pretty good labels. I looked for a succinct definition of Corporatism: "the control of a state or organization by large interest groups." That happens in every economic system, not just capitalism.
pasquinelli 10y ago
how does a company innovate themselves into a monopoly? what's stopping others just copying their innovation and competing with them?
onebigbug 10y ago
You haven't listed all the possible options for obtaining a monopoly, though, including the one Microsoft was convicted of. In addition to creating a better product and by controlling the government, you can also engage in tying, whereby you have a monopoly (perhaps rightfully gained through innovation) and use it to gain a monopoly in another area by forcing customers to buy both together, you can sell at a loss until your competitors go out of business and then raise the price, you can collude with other companies to fix prices, or to only service certain areas or sectors. Having a monopoly is not illegal, exploiting your position as a monopoly to maintain it is. That is what Microsoft did.

eggy 10y ago

True, and people tend to villify those they are envious of, or because they don't align with their views. Nobody is spotless, and if you think you are, your mirror is dirty. You can find bad about Jobs, Gates, Jesus, the Bible, the Quran, anything and anybody if you look hard enough. I think Gates is genuinely a decent human being, and does a lot of good; he puts his money where his mouth is. So there may be a million great souls who do not, or cannot contribute money or time. At least, whether you think ill of him or not, the effect is he has helped many, many people. You should weigh this against your accusations.

kusmi 10y ago

I worked for the Gates foundation as a researcher. I don't claim objectivity. My impression of the division I worked in was that it was poorly managed, very political, had little oversight from the big man himself as far as I know, and most importantly that it will not accomplish any of the goals it set out. Despite everything there was a lot of patting on the back and pretty words, with zero meaningful progress.

FreeInternet 10y ago
Internet is no longer free. After http://www.thedailybeast.com/articles/2016/04/21/hillary-pac-spends-1-million-to-correct-commenters-on-reddit-and-facebook.html?n=2 http://www.thedailybeast.com/articles/2016/04/21/hillary-pac... I have trouble believing any account I read. You may be right but corruption is so rampant that you'll have to forgive me for my skepticism

zamalek 10y ago

> Who knows what their efficiency is as charity? That's exactly what the article explores.

mike2477 10y ago

I think it's a little outlandish to suggest that Bill Gates started the Gates Foundation in order to make more money or save on tax breaks. Did he do it for his ego? Maybe. But it'd be hard to find someone who has done great work who didn't do it for their ego. Being a skeptic in an internet forum is easy. Solving problems that The Gates Foundation has set out to solve isn't. I'll continue to lionize those who do the latter.