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Billionaire Leon Cooperman told CNBC on Wednesday that he believes the wealthy will find ways to avoid paying Senator Elizabeth Warren’s wealth tax if it becomes law. He also argued that there are better mechanisms to increase federal government revenue.
“The idea has no merit. It’s silly. It’s probably not legal,” he said on “Squawk Box”.
“If the wealth tax passes, go out and buy yourself gold because people are going to be rushing to find ways to hide their wealth,” Cooperman added.
Cooperman’s appearance came after the Massachusetts Democrat and other progressives in Congress unveiled their plan for an annual tax of 2%, or 2 cents, on every dollar of people’s wealth worth 50 to $ 1 billion. Those whose fortunes are valued at more than $ 1 billion would be subject to an annual tax of 3%, or 3 cents, on every dollar above that threshold.
Supporters of the wealth tax proposal said it would generate at least $ 3 trillion in revenue over 10 years, citing analysis by University of California at Berkeley economists Emmanuel Saez and Gabriel Zucman.
“I believe in the progressive structure of income tax. I believe rich people should pay more,” Cooperman said, but the president of the Omega Family Office argued that the focus should be on the reform of existing systems to raise funds. For example, he said he was in favor of closing the so-called interest-bearing loophole, which benefits managers of hedge funds and private equity funds.
“The question we need to focus on as a nation is what should be the top tax rate for the rich? Because that will define the return on government income and the government should essentially allocate its activity to that income. “, added Mr. Cooperman. noting that he has long declared his willingness to “work six months a year for the government and six months for myself”. ‘
Warren told CNBC on Tuesday that she believes the wealth tax money could be “transformative” for the United States, enabling investments in early childhood education and infrastructure.
“It’s been put in place now to say we’re not going to levy taxes on assets worth less than $ 50,000, so it’s not intrusive. It’s not about going into people’s homes and assessing their subzeros or figuring out what their four year old cars are worth, ”Warren said.
“But he says if you have a fortune over $ 50 million you pay on it. And if your fortune is less than $ 50 million you don’t. Good for you,” she said. added. “I think most people would rather be rich and pay 2 cents. It’s not very complicated. It’s really a wealth tax of over $ 50 million.”
Cooperman was a vocal opponent of Warren’s previous argument for a wealth tax during his unsuccessful campaign for the 2020 Democratic presidential nomination.
In October 2019, Cooperman wrote a very critical letter to Warren, claiming that “defamation of the rich is misguided.” Warren’s campaign ran an ad pleading for a wealth tax next month, blasting billionaires including Cooperman.
After the campaign announcement became public, Cooperman told CNBC that the wealth tax would be “almost impossible to control and is likely unconstitutional.”
Cooperman, a hedge fund pioneer and son of a Bronx plumber, signed The Giving Pledge, created by Bill and Melinda Gates and Warren Buffett. When asked by CNBC’s Andrew Ross Sorkin on Wednesday whether he would support reform of a certain legacy-focused tax policy, Cooperman said: “To be honest with you, I’m not focusing on that. because my plan is to give all my money … to death. “
Cooperman said he was concerned about the rhetoric that vilified wealthy people in the United States. “We all have to work together to deal with our problems, and it is that simple. You have to decide if you are a capitalist or if you are a socialist,” he said.
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