A few days ago, Bill Gates received a rather malicious piece of hate mail singed, “Ralph Nader.” It wasn’t his first.

Presumably, the infamous “Consumer Advocate” left his return address off of the envelope, because someone at Microsoft accidentally opened it instead of just throwing it in the pile of America On Line CDs and winning notices from the Publisher’s Clearing House. In the letter (also signed by James Love from the “Consumer Project on Technology”), Nader accused “wealthy Microsoft shareholders,” including Gates, of “benefiting enormously” from “lower tax rates.” He continued by quoting some tax law and implying that he was capable and willing to rally Microsoft shareholders if Gates did not take him seriously. It was a thinly veiled threat from a historically spiteful corporate vandal. On the schoolyard, Nader would (hopefully) be scorned for arguing that the smart, productive kids were not handing over enough of their milk money to the local bullies. But since he is all grown up now and uses at least a sixth-grade vocabulary, Reuters cheerfully reproduces his tripe for newspapers throughout the world.

Nader’s letter looks something like this (I cut some parts out and paraphrased a bit):

Dear Mr. Gates:

We are writing to ask Microsoft to change its practice of not paying dividends to shareholders. Our reasons are as follows.

1. The quantitative failure to pay dividends year after year is an inappropriate and we believe unlawful device to shelter Microsoft earnings from federal income taxes…

(It is unfair that you are so successful and you should be punished for this, blah, blah, blah…)

2. Many shareholders would benefit from the payment of dividends…

(You are the slave of the poorest shareholders and will be whipped severely if you do not comply, etc., etc., etc.)

What Mr. Nader claims to be upset about is Microsoft’s long-time “practice of not paying dividends to shareholders.” US law says that income from dividends is subject to income taxes, while profit resulting from the sale of stock is subject to capital gains taxes. Instead of using its profits to pay dividends to shareholders, Microsoft puts the money in the bank to hold as an asset. In lieu of income from dividends, shareholders can simply sell Microsoft stock (the value of which is partially determined by how much money Microsoft has in the bank). Since the capital gains rate is 20 percent, anyone who pays a marginal income tax rate of more than 20 percent will pay less in taxes if they sell stock then they will if they receive the same income via dividends. “Wealthy Microsoft shareholders” obviously pay much more than 20 percent income tax (almost double), so they benefit by not receiving stock dividends and selling shares instead. Actually, any Microsoft shareholder who pays more than 20 percent income tax derives the same benefit.

What Mr. Nader is actually upset about is success. As a “Consumer Advocate,” he has spent years trying to destroy the very corporations and productive individuals who make commerce possible. As a symbol of corporate success, Microsoft has been on his hit list for quite some time. In a craftily worded “invitation” to Gates in 1997, Nader expressed concern over “concentration of economic power” and casually mentioned that he had “worked with many people of conscience inside companies, some of whom became effective whistle-blowers.” Although a threat from a mob thug is not quite as subtle, the message is the same. In April of 1999, Nader wrote an article titled, “What to do with Microsoft?” The thought that Microsoft’s owners should be able to decide what to do with their own property did not seem to have occurred to Nader

Bill Gates should not be wasting his valuable time reading anything but an apology from the likes of Ralph Nader, “Consumer Advocate.” On the other hand, if he truly enjoys reading letters from various advocates, perhaps he should read this one:

Dear Mr. Gates,

I am writing to ask that Microsoft executives avoid paying taxes any way that they legally can. My reasons are as follows.

1. You are morally entitled to your life and the product of your labor.

2. The government is likely to spend any tax revenue obtained from Microsoft to pass more laws designed to impede future progress and punish success.

Keep the profits that you have rightly earned, and use them for whatever you damn well please.

Sincerely,

Carter Laren
“Producer Advocate”

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Carter Laren

Carter is a part-time free-lance writer and Producer Advocate. He is also a former editor and contributing writer at Capitalism Magazine, where he primarily focused on self-defense and national-defense issues. While at the University of Pittsburgh, Carter was a regular columnist for The Pitt News. In his spare time, Carter instructs both law enforcement and fellow citizens in the defensive use of firearms and is a student of the martial arts.

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