Jeff Bezos says only 'skill' will solve wealth inequality, not overtaxation

Amazon Executive Chairman Jeff Bezos said during an interview on Wednesday that wealth inequality in the United States can only be addressed through “skill,” while also arguing that lower-income Americans should not be required to pay federal income taxes.

In an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box,” Bezos discussed wealth, affordability, the US tax code, and growing criticism of billionaires in America.

“You see it in a bunch of headlines. You see it in a bunch of places. And I’ve been thinking, I have been thinking about what is – what is driving this, because it does seem different from 10 years ago,” Bezos said. “I think what’s going on is that it’s kind of a tale of two economies. So you have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling – struggling to pay rent, groceries.”

He argued that politicians respond to complaints over affordability by blaming the wealthy rather than addressing the root causes.

“What’s happening here is politicians are using the kind of age-old techniques,” Bezos explained. “So there’s this tale of two economies, and they’re using this age-old technique of, you know, picking a villain and pointing fingers. But the problem is that doesn’t solve anything. And so like, if you want to help the group of people who are struggling, you have to figure out real root causes and solutions. And that takes skill. You know, it’s like the way we – if we have a problem at Amazon, you know, the way we would fix it is we would go in and we’d do the five whys and we’d try to get to a root cause. We try to find a root fix and then we fix it at the root, you’re fixing it forever. It’s a real solution.”

“And what we don’t do because it doesn’t work is just point fingers and blame people. It might feel good for 10 seconds, but it doesn’t accomplish anything. And so what could you really do?” he continued.

Bezos then proposed eliminating federal income taxes for lower earners in the US.

“A nurse in Queens who makes $75,000 a year pays 12 – more than $12,000 a year in taxes. Does that really make sense? So, people talk about making the tax system more progressive. How about we start by having the nurse in Queens not pay taxes?” he suggested. “Why is a nurse in Queens who makes $75,000 a year paying more than $1,000 a month in taxes?”

“That’s $1,000 a month that could help with rent or groceries or anything,” Bezos continued. “And so – and by the way, do you know what that all adds up to? The bottom half of income earners in this country pay only 3 percent of the taxes. It’s only 3 percent. We can find 3 percent. So we don’t have – it’s a small amount of money for the government.”

Bezos also argued that the country does not have a revenue problem, as the US has the most progressive tax system in the world. He claimed that the US, in reality, has a spending problem.

“The top 1 percent of taxpayers pay 40 percent of all the tax revenue. The bottom half pay only 3 percent. We have already, and I think it should be zero. I don’t think it should be 3 percent,” Bezos said. “I think it should be zero. So we would be making more progressive that way. We actually have a spending problem and that’s a skills issue.”