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?
READER COMMENTS
David Henderson
Jun 18 2025 at 12:16pm
No.
Daniel B
Jun 19 2025 at 9:16pm
Could you quickly summarize why Holcombe thinks this is the case and the “many reasons” he gives for this? I find this idea hard to believe. On introspection, when I voted against certain laws in the past, I did that because I truly didn’t want those laws to be passed. If you had given me dictatorial powers, so that the choice was “actually [mine] to make,” I still would’ve opposed those laws. My beliefs about the effects of those laws wouldn’t have changed, after all, and thus I still wouldn’t decide to support them. But this doesn’t fit the Holcombe explanation.
I don’t really see how these questions prove what Holcombe is saying to be true. These questions are about making people reconsider their ideas, not their preferences. The people who want to prohibit the existence of billionaires – by taxing away their wealth, for example – want that because they think that will lead to an overall better world than one in which billionaires exist. Their preference is for a better world; their idea is about a means of getting to that better world – not allowing billionaires. (We know their preference is for a better world because if you asked them whether they think abolishing billionaires would lead to a less desirable world, they’d look at you like you were crazy; why assume they want to make the world worse?) With that in mind, I believe we can see that these questions translate more to something like “Are you sure your idea would lead to a better world?” than “Are you sure you would prefer a better world?”
To answer your question, I wouldn’t push such a button, because I have learned various things (from Hayek, Sowell, David Henderson, Milton Friedman, John Stossel, etc.) that make me skeptical of government intervention and big government in general. But there are in fact people who do want to abolish billionaires (that is why philosophical papers defending billionaires have been written), even considering your magical button questions regarding charity work. I’ve followed Chris Freiman on Twitter for a while and I remember him criticizing people who are critical of private charity; your points about government taxation preventing charity wouldn’t affect them very much presumably. Since I’m too lazy to find those posts now, I will just point out that Jacobin has an article entitled “Against Charity” from 2015. I admittedly am ignorant about the details of that or other similar articles, but the point is that people already have accounted for charity in their desire to prohibit billionaires or otherwise support bigger government. So yes, they presumably would in fact push the magic button you’re talking about.
I recall that back in 2008 or something like that Obama was asked whether he’d support a rise in capital gains taxes even if that lead to lower revenue, and he answered the question “why raise it all” in light of that with “for purposes of fairness.” (I think that video cuts off a later segment of Obama wondering whether revenue really would be lower, but the fact that he would even consider raising the tax for “fairness” even if it meant lower revenue is telling.) People actually have expressed support for raising taxes on the rich even if it didn’t lead to more revenue. I thought Margaret Thatcher was perhaps exaggerating in her statement that some people would rather have the poor poorer, as long as the rich were less rich, but unfortunately she was not, as these examples show. So I believe the answer to your question is yes.
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