Changing tax laws won't bring in 'big cheques': Gates

Changing tax laws won't bring in 'big cheques': Gates

Summary: Microsoft co-founder and philanthropist Bill Gates has welcomed reviews of taxation laws to close loopholes for multinationals, but he has warned that it won't bring in "big cheques" to government coffers.

TOPICS: Microsoft, Australia

As governments around the world look at ways to ensure big multinational corporations like Google, Apple, and Microsoft have their profits taxed in the country where that profit is generated, and not a country with a much lower tax rate, Microsoft co-founder and philanthropist Bill Gates has said that it's a good debate to have, but has warned that it will not bring in the big revenues governments are chasing.

(Image: Screenshot by Josh Taylor/ZDNet)

In Australia, the government and the opposition have both pledged to close the loopholes that allow multinationals to send their profits offshore to avoid being taxed in Australia, as last week Apple CEO Tim Cook appeared before US congress to say Apple would bring more of its capital back to the US if the country had a "reasonable" tax rate.

Gates, who is in Australia to promote the work of the Bill and Melinda Gates Foundation's philanthropic work, told the National Press Club in Canberra today that he wasn't sure that closing the loopholes would ensure governments get their definition of a "fair share" of revenue from the mulitnational companies.

"That's a good debate people should have, but I don't think, whatever your definition of the word 'fair' is, that unless you change the laws, that they're likely to come bearing large cheques," he said.

Gates said that tax laws should always be discussed.

"My dad led a big campaign in the United States to preserve estate tax, which I thought was a very appropriate thing," he said.

"You won't find many people who are for a tax. It's kind of easier to be for spending than it is to be for tax, so I applaud everyone who's brave enough to get criticised for being for the mechanism that has to raise some amount of revenue to perform these functions."

Gates, who this morning had met with Prime Minister Julia Gillard and Opposition Leader Tony Abbott to lobby for an increase in Australia's foreign aid budget, devoted most of his speech to his work with the foundation, and its work in helping the world's poorest and dealing with diseases in developing nations.

Gates said that despite loving his work at Microsoft, he wanted to work on something that would reach the world's poorest, which technology doesn't quite reach.

"I devoted myself to a company that would participate in building the software that would bring that capability to life, that would give us all the tool to communicate and create in new and different ways," he said. "And that digital revolution is literally just at the beginning."

"But when I chose to change and focus on the foundation, I saw that technology doesn't naturally get to those most in need, and in fact, their most basic needs are not initially related to IT or the digital revolution in any way. In fact, the needs are based on wanting their children to live, wanting their child to have nutrition and to grow up to achieve their potential."

But Gates acknowledged that there was a difficulty in moving from the tech world to philanthropy. He said that while in Microsoft, he would be aware of signals from the market that would say whether the company is heading in the right direction, with philanthropy, it is much harder to determine whether the aid is going in the right places. He said it was essentially starting fresh.

"The difficulty with philanthropy, when you start out, you're naive."

Topics: Microsoft, Australia


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • $48 Billion From Apple Alone... "big" do you want?
    • funny you say that

      From the article "profits taxed in the country where that profit is generated". This is precisely what Apple is doing. 2/3 of their profit is generated outside the US. That money are taxed outside of the US.

      Perhaps the US wants to tax Apple one more time?
      • Re: "profits taxed in the country where that profit is generated"

        So Apple made $137 billion in profit in Ireland alone?
        • Probably not Ireland, but not the US either.

          Even if those international profits were not taxed in Ireland, the US has not "right" to them either if they are taxed in the country that generated them.
          • Why does government deserve big checks to begin with?

            They do not do a d@mn thing that is productive. All they are capable of is wasting your tax away and ending up in a deficit. Instead of bigger checks they should get smaller ones until they learn to behave fiscally.
          • are a total idiot

            End of Story.....period
            Over and Out
          • Changing tax laws won't bring in 'big cheques': Gates

            in the us, when the federal government cut back on anything, the economy falters. the fortune 500's biggest client is the government (federal/local), and i believe wherever there is commerce the government is the biggest spender. if, may the gods forbid, the rich are allowed to their devices they will hoard all their profits and leave the economy dry. the purpose of the bailout was to inject liquidity to the market, yet the big-to-fail institutions after getting the money just stand pat and did nothing to re-invest those money. instead, they congratulated themselves and gave obscene fat bonuses among them while the housing market was tanking and house owners were facing foreclosure left and right ... the purpose of governments in the economy is to distribute wealth that otherwise will be hoarded by the greedy bunches. greed is good, only if under control.
            sample of your wasted dollars, if indeed you consider them wastes:
          • Re: They do not do a d@mn thing that is productive

            Who created the Internet?
          • and LBiege are biggest idiots to post here.........IRELAND

            is a frigging TAX shelter just like the Camin Islands are..............Everyone enjoys the benifits of living in the USA and the rich do any thing they can to avoid paying taxes..........

            remember one thing ....

            Over and Out
          • No...

            You're the biggest idiot, and extremely naive.

            I would suggest you learn how the global taxation system works and, while you are at it, learn how to spell Cayman.

            BTW, only Americans benefit from living in America. That's if you call living in America a benefit. Personally, you couldn't pay me enough to live in a totalitarian state and America is well on it's way.

            Good on Apple, Google et al... If they can legally minimise their tax then why shouldn't they?
    • $48 Billion From Apple Alone...

      Ireland, Population 4.576 million (2011),
      I want some idiot to tell me Apple can make 137 billion dollar off 4.576 million people. If the word impossible comes to mind then that's the reason Apple was pulled in a congressional hearing. Either you are stupid or someone is cheating the American tax payers.
      Only a clown cant look up facts or the facts don't matter.
      • You need to understand the context

        Gates is in Australia at the moment. Getting big companies to pay tax is quite an issue here, and, presumably, in many other countries around the world. There is quite some evidence that big companies move their money off-shore to avoid paying tax.

        The other side of the equation, the one to which Gates alludes, is that our Labor Government is trying to use big companies as their private ATMs because of the massive debt accumulated by our government.

        Big companies certainly need to be paying more tax here, in Australia; not somewhere else in the world. However, giving more money to this government is akin to simply pissing it up against a wall.
      • It's not cheating if...'re following the rules.
        • Smokey Yunick, CPA?

          That does seem to be the issue. I wonder how much political will there actually is to put a stop this Yunicking of the tax code.

          Of course, there's a chance that rather than exploiting loopholes in the law, these companies will attempt to circumvent the laws outright. Of course, the enforcement of these new laws is a bridge that will be crossed in due time.
          Third of Five
      • Re: make 137 billion dollar off 4.576 million people

        Did you ever know you should not trust more than 10% of what you read in the press? (he respected press, that is)

        Apparently, Apple has local business units all over the world and Apple apparently sells a lot of things all around the world, not in Ireland alone. You know, countries like Russia, China...
  • Discussion is good

    But asking big business about setting tax laws is like asking turkeys to vote for Christmas ! They won't turn their backs on the US or UK markets, they are too big. If you want to do the trade, pay the tax.
    Dave Derrick
  • I'd settle with $1000 from each of the 47%

    No income tax paying moochers.

    Money made in other countries shouldn't concern our government.
    • Understand

      That some of the non tax payers moochers, are rich people who have accountants that find ways to get all the deductions so they do not pay tax at all.
      • Also...

        Also, many of the people who don't pay income taxes don't make enough money to have to pay income taxes. This, of course, does not preclude them from paying other taxes, such as sales tax on consumer goods. For that matter, they probably pay a larger proportion of sales taxes out of their net incomes than other people do, since they're paying from a smaller net income.
        Third of Five
  • Must be nice

    Mr. Gates sees the advantages of an estate tax – yet he sets up trusts and foundations for his money to ensure he alone chooses how it is spent. If he were a true believer in the good government can do, he would just write checks to the Treasury Department and ask them to divest as they see fit. Instead, he uses teams of lawyers to disperse his riches as he chooses, without the interference of taxing authorities. If only he would advocate for the common citizen to have such choices in how they spend money verses turning over trillions to taxing authorities.