Bill Gates is making most of his money on appreciation of his MSFT shares, and has no use for liquidity on any significant portion of them. A person can only sp

Bill Gates is making most of his money on appreciation of his MSFT shares, and has no use for liquidity on any significant portion of them. A person can only spend so much; consumption inequality is much less dramatic than wealth or income inequality. So the vast majority of "income" at this level is unrealized capital gain, not taxable at all. When someone like this does need liquidity, the top marginal tax rate on capital gain is 20%, not 37% like it is for wage income. But cheaper still is interest. He can pledge the shares as collateral and take out a loan at something like 2%/year (probably less). Progressive taxation is only for wage workers. A FAANG senior engineer is "the 1%" within the progressive tax system, and getting hit as hard as it is possible to get hit. But his founder-CEO lives outside the progressive tax scheme (c.f. Steve Jobs and his $1 salary), barely has a foot in any tax scheme (most gains unrealized), and is paying almost nothing in percentage terms.