Billionaire Leon Cooperman told CNBC on Wednesday that he believes the wealthy would find ways to avoid paying the tax on Senator Elizabeth Warren’s fortune if it became law. He also argued that there are better mechanisms for increasing federal government revenue.
“The idea has no merit. It is foolish. It is probably not legal,” he said in “Squawk Box”.
“If the wealth tax is passed, go out and buy some gold because people will be rushing to find ways to hide their wealth,” added Cooperman.
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 million 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 limit.
Proponents of the fortune tax proposal said it would generate at least $ 3 trillion in revenue in 10 years, citing an analysis by economists Emmanuel Saez and Gabriel Zucman at the University of California-Berkeley.
“I believe in the progressive income tax structure. I believe the rich should pay more,” said Cooperman, but the president of the Omega Family Office said the focus should be on reforming existing systems to raise money. For example, he said he was in favor of eliminating the so-called carry-over interest gap, which benefits hedge fund managers and private equity funds.
“The question we have to come together as a nation is what should the maximum tax rate on the rich be? Because that will define the revenue generated by the government and the government should basically allocate its activity to that revenue,” added Cooperman, noting that there is much says he is willing to “work six months a year for the government and six months for me”. ‘
Warren said on Tuesday on CNBC that he believes the money raised by the wealth tax may be “transformative” for the United States, allowing for investments in early childhood education and infrastructure.
“It is now established to say that we are not going to charge taxes on any asset worth less than $ 50,000, so that is not intrusive. It is not about entering people’s homes and evaluating their Sub Zeros or finding out what their old cars are worth. worth it, “said Warren.
“But it says that if you have a fortune above $ 50 million, you pay for it. And if your fortune is below $ 50 million, you don’t pay. Good for you, anyway,” she added. “I think most people prefer to be rich and pay 2 cents. This is not very sophisticated. It is really a tax on wealth above $ 50 million.”
Cooperman was a vocal opponent of Warren’s previous pitch for a wealth tax during his unsuccessful campaign for the 2020 Democratic presidential nomination.
In October 2019, Cooperman wrote a severely critical letter to Warren, saying his “defamation of the rich is wrong”. Warren’s campaign ran an ad advocating a fortune tax the following month, targeting billionaires, including Cooperman.
After the campaign’s announcement became public, Cooperman told CNBC that the wealth tax would be “almost impossible for the police and probably unconstitutional”.
Cooperman, a hedge fund pioneer and the son of a plumber in 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 particular inheritance-focused tax policy, Cooperman said, “To be honest with you, I’m not focused on that because my plan is to donate all my money. money in death. “
Cooperman said he was concerned about the rhetoric that vilified rich people in the United States. “We all have to work together to deal with our problems, and it is as simple as that. You have to decide whether you are a capitalist or whether you are” re a socialist, “he said.