Do high taxes make you less generous?

Here’s a question: do you think that Bill Gates would have started and built up his Microsoft empire had the top rate of US income tax been 99 per cent? I don’t know Gates but I think the answer is obvious. Why would he have put in all those hours and taken all those risks if the state was going to snatch away virtually all the rewards? Either he wouldn’t have bothered or – my guess – he would have jumped on a plane and founded his business somewhere else, even renouncing his US citizenship in the process in order to avoid the taxman coming after him.

I pose the question because 99 per cent is the proportion of his worldly wealth that Gates announced this week he intends to give away over the next 20 years. That is a pretty useful sum of money: £150 billion is nearly enough to fund the entire NHS for a year.