Bill Gates has for many years been focusing on philanthropic projects through the Gates Foundation. He recently announced an end date for this endeavor. As Bill Gates put it in his recent announcement:
I will give away virtually all my wealth through the Gates Foundation over the next 20 years to the cause of saving and improving lives around the world. And on December 31, 2045, the foundation will close its doors permanently.
Gates says over the last 25 years, his foundation has put $100 billion into various projects and causes, funded through his own wealth as well as the wealth of other billionaires like Warren Buffett. His goal is for the foundation to now pick up the pace – in the next 20 years until it closes, he expects his foundation will be donating another $200 billion, with Gates giving away virtually all his wealth as part of this process.
The Gates Foundation has done tremendous good in the world – by any reasonable estimate many millions of lives have been saved and millions more improved. Billionaires like Bill Gates are often criticized for not paying enough in taxes. However, opportunity cost cannot be ignored. (Or, I guess it’s more accurate to say opportunity cost should not be ignored – clearly people can ignore it.) Instead of funding these causes through the Gates Foundation over the next 25 years, that $200 billion could instead be collected as taxes by the federal government over that same timeframe. No change in tax law needs to happen for this to occur – citizens are free to send in extra tax money to the government any time they wish. Every wealthy person out there who loudly and publicly insists “people like me should be paying more in taxes” in fact has the ability to do just that, anytime they want. The optics of this are rather odd. When someone loudly declares that they believe they have a moral obligation to do X, while also having the ability to X at any time and nobody can prevent them from doing so, but nonetheless they consistently decline to do X, one might reasonably wonder if they really believe in the moral obligation they preach.
In his book Following Their Leaders: Political Preferences and Public Policy, Randall Holcombe makes a distinction between expressive preferences and instrumental preferences. An expressive preference is, as the name suggests, about what ideas we prefer to express, to others or even to ourselves. Instrumental preferences are about what outcomes we would directly choose to create when given an effective choice. What we expressively prefer isn’t aways the same as what we instrumentally prefer. Holcombe argues that voting behavior and political activism are driven by expressive preferences more than instrumental preferences. As he says, voters “are acting expressively, not instrumentally, and as individuals they are not choosing an outcome, they are expressing a preference. There are many reasons to think that the preferences they express at the ballot box may differ from outcomes they would prefer if the choice among social alternatives were actually theirs to make.”
So here’s the question that comes to mind. Lets imagine that we find an advocate of increasing taxes on billionaires – even better, one of the people who insists “billionaires should not exist.” Suppose we presented them with a magical button that would send out a signal to Bill Gates’ brain and imprint in him the desire to shut down his foundation right now, and instead give all his wealth, all at once, to the federal government as a voluntary tax contribution. At time of writing, Bill Gates’ net worth is around $116 billion, so by pushing this button, let’s say the federal government will gain an additional $116 billion in revenue. (To put that number into context, according to the CBO the federal government spent $640 billion in the month of January 2025 alone – over five and a half times Bill Gates’ entire fortune in a single month!) The cost of this will include, among other things, the elimination of all the cumulative good that would otherwise have been done by the Gates Foundation over the next two decades.
If we put this magical button in front of this “billionaires shouldn’t exist” advocate and offered them the choice – eliminate Bill Gates’ billionaire status, send another $116 billion in tax revenue to the federal government, at the cost of erasing all the future work that would have been done by the Gates Foundation, would they push the button? Would their expressive preference to eliminate billionaires from existence and collect more in taxes from the rich also turn out to be their instrumental preference? Or, with the full weight of that decision suddenly entirely on them, causing them to personally bear the full moral responsibility of erasing all the work the Gates Foundation would have done over the next 20 years, would they perhaps hesitate and reconsider if the preference they’ve been expressing is really what they would choose to enact?
Would you push the button?
