Billionaire Leon Cooperman told CNBC on Wednesday that he believes rich people will find ways to avoid paying wealth tax on Senator Elizabeth Warren if it becomes law. He also argued that there are better mechanisms to increase federal government revenues.
“The idea has no merit. It’s stupid. It’s probably not legal,” he told Squawk Box.
“If the wealth tax passes, go out and buy gold because people will be quick to find ways to hide their wealth,” Cooperman added.
Cooperman’s appearance came after the Massachusetts Democrat and other congressional progressives unveiled their plan for an annual tax of 2 percent or 2 cents on every dollar of people’s wealth worth $ 50 to $ 1 billion. Those whose assets are valued at more than $ 1 billion would be subject to an annual fee of 3%, or 3 cents, for every dollar above this threshold.
Proponents of the wealth tax proposal said it would raise revenue of at least $ 3 trillion over 10 years, citing an analysis by economists Emmanuel Saez and Gabriel Zucman, economists at the University of California-Berkeley.
“I believe in the progressive structure of income tax. I think rich people should pay more,” Cooperman said, but the chairman of the Omega family office said the emphasis should be on reforming existing systems to raise money. For example, he said he was in favor of closing the so-called interest gap, which benefits managers of hedge funds and private equity funds.
“The question we need to focus as a nation is what should be the maximum tax rate for rich people? Because it will define the return on income to the government, and the government should practically attribute its work to that return,” he added. Cooperman, noting that he has long declared his desire to “work six months a year for the government and six months for me.” ‘
Warren told CNBC on Tuesday that he believes wealth tax money could be “transformative” for the United States, allowing investment in early education and infrastructure.
“It was created now to say that we will not collect taxes on any assets worth less than $ 50,000, so this is not intrusive. It’s not about getting into people’s homes and evaluating their Sub-Zeros or finding out which 4-year-old cars are worth it, “Warren said.
“But it is said that if you have a fortune over $ 50 million, you pay for it. And if your fortune is under $ 50 million, you don’t. Good for you, anyway,” she added. “I think most people would prefer to be rich and pay 2 cents. That’s not very elegant. It’s really a wealth tax of over $ 50 million.”
Cooperman was a vocal opponent of Warren’s previous pitch for a wealth tax during his failed campaign for the 2020 Democratic presidential nomination.
In October 2019, Cooperman wrote a harshly critical letter to Warren, saying that “denigrating the rich is wrong.” Warren’s campaign aired an ad in support of the wealth tax next month, throwing billionaires, including Cooperman.
After the campaign announcement went public, Cooperman told CNBC that the wealth tax would be “almost impossible for the police and probably unconstitutional.”
Cooperman, a pioneer of hedge funds and the 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 if he would support a reform of a certain legacy-focused fiscal policy, Cooperman said: “To be honest with you, I’m not focusing on this, because my plan is to -I give all my money to death “.
Cooperman said he was concerned about the rhetoric that has hurt rich people in the United States. “We have to work together to solve our problems and it’s as simple as that. You have to decide if you’re a capitalist or a socialist,” he said. .