They have all taken from the public or from employees, or through taxes or untaxed inheritances.
By Paul Buchheit
January 26, 2014
The top individuals on the 2013 Forbes 400 list are generally believed to be makers of great companies or concepts. They are the role models of Paul Ryan, who laments, “We’re going to a majority of takers versus makers in America.” They are defended by Cato Institute CEO John A. Allison IV, who once protested: “Instead of an attack on the 1 percent, let’s call it an attack on the very productive.”
But many of the richest Americans are takers. The top twenty, with a total net worth of almost two-thirds of a trillion dollars, have all taken from the public or from employees, or through taxes or untaxed inheritances.
Bill Gates may be a knowledgeable and hard-working man, but he was also lucky and opportunistic. He was a taker. In 1975, at the age of 20, he founded Microsoft with high school buddy Paul Allen. This was the era of the first desktop computers, and numerous small companies were trying to program them, most notably Digital Research, headed by brilliant software designer Gary Kildall. His CP/M operating system (OS) was the industry standard. Even Gates’ company used it.
But Kildall was an innovator, not a businessman, and when IBM came calling for an OS for the new IBM PC, his delays drove the big mainframe company to Gates. Even though the newly established Microsoft company couldn’t fill IBM’s needs, Gates and Allen saw an opportunity, and so they hurriedly bought the rights to another local company’s OS — which was based on Kildall’s CP/M system. Kildall wanted to sue, but intellectual property law for software had not yet been established. Kildall was a maker who got taken.
David Lefer, a collaborator for the book They Made America, summarized: “Gates didn’t invent the PC operating system, and any history that says he did is wrong.”
At first glance, Warren Buffett seems to be a different breed of multi-billionaire, advocating for higher taxes on the rich and a reasonable estate tax. But his company, Berkshire Hathaway, hasn’t been paying its taxes. According to the New York Post, “the company openly admits that it owes back taxes since as long ago as 2002.”
A review of Berkshire Hathaway’s annual report confirms that despite profits of over $22 billion in 2012, a $255 million refund was claimed, while $44 billion in federal taxes remain deferred on the company’s balance sheet.