Billionaire Leon Cooperman told CNBC on Wednesday he believes rich people will find ways to avoid paying Senate Elizabeth Warren’s wealth tax if it becomes law. He also argued that there are better mechanisms for raising federal government revenue.
“The idea has no merit. It’s foolish. It’s probably not legal,” he said on ‘Squawk Box’.
“If the wealth tax succeeds, go buy gold for yourself, because people are in a hurry to find ways to hide their wealth,” Cooperman added.
Cooperman’s appearance comes after the Massachusetts Democrats and other progressives in Congress announced 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 fortune is valued at more than $ 1 billion are subject to an annual tax of 3%, or 3 cents, on every dollar above the threshold.
Supporters of the wealth tax proposal said it would generate at least $ 3 billion in revenue over ten years, citing an analysis by Emmanuel Saez and Gabriel Zucman, economists at the University of California-Berkeley.
“I believe in the progressive income tax structure. I believe that rich people should pay more,” Cooperman said, but the chairman of the Omega family office argues that the focus should be on reforming existing systems to raise money. He said, for example, that he was in favor of eliminating the so-called default interest rate, which is to the advantage of hedge fund and private equity fund managers.
“The question we need to unite as a nation is what should be the maximum tax rate on wealthy people? Because it will define the return for the government and the government should basically allocate its activity to the revenue return,” Cooperman added. he noted that he had long been willing to work ‘six months a year for the government and six months for myself’. ‘
Warren told CNBC on Tuesday that she believes the money raised by the wealth tax could be ‘transformative’ for the US, enabling investments in early childhood education and infrastructure.
“It’s now set out to say we’re not going to collect tax on any asset worth less than $ 50,000. So it’s not intrusive. It’s not about getting into people’s homes and their Sub-zeros. to appreciate or to find out what their 4-year-old cars are worth, ‘Warren said.
“But it says that if you have a fortune of more than $ 50 million, you pay it. And if your fortune is below $ 50 million, you do not have to. At least good for you,” she added. “I think most people would rather be rich and pay 2 cents. It’s not very fine. It’s really a tax on fortunes above $ 50 million.”
Cooperman was a staunch opponent of Warren’s previous campaign for wealth tax during her unsuccessful campaign for the Democratic presidential candidate in 2020.
In October 2019, Cooperman wrote a scathing critical letter to Warren, saying that ‘contempt of the rich is being deceived’. Warren’s campaign delivered an ad the following month arguing for a wealth tax that had blown up billionaires, including Cooperman.
After the campaign’s advertisement became known, Cooperman told CNBC that the wealth tax would be almost impossible for the police, and probably unconstitutional.
Cooperman, a pioneer of the hedge fund and son of a plumber from the Bronx, 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 a reform of a certain inheritance tax policy, Cooperman said: ‘To be honest with you, I’m not set on it, because my plan is to give away all my money. at death. ‘
Cooperman said he is concerned about rhetoric that has dissatisfied wealthy people in the US. ‘We all need to work together to tackle our problems, and it’s as simple as that. You have to decide if you are a capitalist or if you ‘are a socialist,’ he said.