Bill Gates has become an American icon. He is the epitome of the American success story. Born into a well to do family, he attended the same elite private school as his father had before him. He went on to Harvard but drop out because he had an idea for a new type computer operating system he wanted to work at developing. He would develop an operating system that would allow low tech people to use computers. He called his new computer operating system “Windows” and he built a company around his idea called Microsoft. Bill’s idea caught on quickly and Microsoft Windows would grow to be the dominate computer operating system in the world. As a result of the success of Microsoft, Bill Gates became the richest man in the world (estimated net worth is $76 billion).
So, when someone with the genius of Bill Gates talks about his vision of the future, it’s probably a good idea to pay attention to what he has to say… and it’s also a good idea to read between the lines of what he and other elites have to say about the future.
Mr. Gates spoke to the American Enterprise Institute last month and Business Insider reported on what he had to say:
… Gates said that within 20 years, a lot of jobs will go away, replaced by software automation (“bots” in tech slang, though Gates used the term “software substitution”).
This is what he said:
“Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing. … Technology over time will reduce demand for jobs, particularly at the lower end of skill set. … 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.”
Gates believes that the tax codes are going to need to change to encourage companies to hire employees, including, perhaps, eliminating income and payroll taxes altogether. He’s also not a fan of raising the minimum wage, fearing that it will discourage employers from hiring workers in the very categories of jobs that are most threatened by automation.
“When people say we should raise the minimum wage. I worry about what that does to job creation … potentially damping demand in the part of the labor spectrum that I’m most worried about.”
Isn’t that something? The richest man in the world is “most worried” about minimum wage workers. And, Gates is suggesting that income taxes( including corporate taxes) and payroll taxes should be eliminated. How do Gates and friends see the cost of the federal government being paid? This Daily Caller articles tells us that they want to replace income and payroll taxes with a consumption tax.
“I think it’s [a] tough” task to protect the middle class from the impact of automation, billionaire investor and immigration-advocate Steve Case said in December.
“I do think tax structures will have to move away from taxing [companies’] payroll because society has a desire to have employment,” Gates said.
“That’s going to force us to rethink how these tax structures work in order to maximize employment,” he said. One alternative, he said, would be to create consumption taxes — such as a federal sales tax — to hit higher-income people, while also reducing taxes paid by employers for each employee.
“The idea that consumption should be progressively taxed, I think that makes a lot of sense,” he said.
A progressive consumption (sales) tax? How would that work? I guess everyone would have to have a government I.D. with a computer chip containing the information from their W-2 forms. In other words, the robot waiting on a customer would ask for their government I.D. card and scan it and the costumers income level would determine their percentage consumption tax.
Earlier in the Daily Caller article there was this little tidbit about just how much impact new technology may have on the job market:
A 2013 “study by Oxford University researchers Carl Benedikt Frey and Michael A. Osborne … [predicted] that nearly half of American jobs are at ‘high risk’ of being taken over by robots in the next decade or two,” National Journal reported in March.
In 20 years half of American’s jobs may be lost to robots and “software solutions”. That is scary! Yet, as this same article and many others point out, Gates and friends are big supporters of the Senate’s immigration reform bill. Does that make sense if so many people are going to lose their jobs? How many illiterate immigrants is Microsoft going to hire? The Daily Caller article may have the answer:
The immigration increases are backed by progressives who believe new immigrants will vote for Democrats. They’re also backed by wealthy voters who stand to gain from cheaper workers or services, such as landscaping and childcare. The increases are also backed by many business leaders, including Gates and Facebook founder Mark Zuckerberg, who try to hire cheap foreign professionals for jobs sought by American professionals.
Ah! That clears things up. Gates and friends want to be able to hire highly qualified immigrants who will accept a much lower salary than Americans with the same qualifications. The rational they use is that with so much unemployment due to technology, it’s necessary keep the employer’s cost for labor down in the formerly upper middle class so that even more people don’t become unemployed.
If Bill Gates and friends are right about “software solutions” and robotics replacing up to 50% of the workforce within two decades and if they succeed in getting the tax reforms and immigration reforms they want, America will no longer be a “first world” nation. (Logically all other “developed” nations would go the same way.) The number of people on food stamps would go from 50 million today to maybe 150 million in those two decades. The middle class will shrink dramatically and the average income of the remaining middle class will be much less than it is today. The rich oligarchs though their very high consumption tax will be paying to support all those who can not find employment.
Her is a question for you to ponder. How long will the rich oligarchs put up with supporting half or more the population?
Well, that’s what I’m thinking. What are your thoughts?