Billionaire Leon Cooperman told CNBC on Wednesday that he believed rich people would find ways to avoid paying wealth tax on Sen. Elizabeth Warren if it became law. He also argued that there are better mechanisms to increase federal government revenue.
“The idea has no merit. It’s nonsense. It’s probably not legal,” he told Squawk Box.
“If the wealth tax passes, go out and buy yourself some gold because people will rush 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%, or two cents, on every dollar of people’s wealth worth 50 to $ 1 billion. Those whose fortunes are valued above $ 1 billion would be subject to an annual tax of 3%, or 3 cents, for every dollar above that threshold.
Proponents of the wealth tax proposal said it will raise at least $ 3 trillion in revenue in ten years, citing an analysis by University of California-Berkeley economists Emmanuel Saez and Gabriel Zucman.
“I believe in the progressive structure of income tax. I think rich people should pay more,” Cooperman said, but the president of the Omega Family Office said the focus should be on existing systems to raise money. For example, he said he was in favor of eliminating the so-called interest gap, which benefits hedge fund managers and private equity funds.
“The question we need to focus on as a nation is what should be the maximum tax rate for rich people? Because that will define the return on government revenue and the government should basically allocate its activity to that return. Cooperman added, noting that he had long ago expressed his willingness to “work six months a year for the government and six months for me.” ‘
Warren told CNBC on Tuesday that he believes the money raised from the wealth tax could be “transformative” for the United States, allowing for investments in early childhood education and infrastructure.
“It has been created now to say that we will not collect taxes on any assets worth less than $ 50,000, so this is not intrusive. It is not about entering people’s homes and valuing their subzeros or figuring out which ones. they’re four years old. old cars are worth it, “Warren said.
“But he says if you have a fortune above $ 50 million, you pay for it. And if your fortune is below $ 50 million, no. It’s not good for you,” he added. “I think most people would rather be rich and pay two cents. That’s not very fancy. It’s really a wealth tax in excess of $ 50 million.”
Cooperman was a vocal opponent of Warren’s previous launch for a wealth tax during his failed campaign for the 2020 Democratic presidential nomination.
In October 2019, Cooperman wrote a highly critical letter to Warren, saying his “vilification of the rich is wrong.” Warren’s campaign ran an ad advocating a wealth tax the following month, prompting thousands of billionaires to include Cooperman.
After the campaign announcement was made 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, has signed The Giving Pledge, created by Bill and Melinda Gates and Warren Buffett. When asked by CNBC’s Andrew Ross Sorkin if he would support a reform of a particular inheritance-centered fiscal policy, Cooperman said, “To be honest with you, I’m not focused on this because my plan is give away all my money to death “.
Cooperman said he was concerned about the rhetoric that popularized the rich people of the United States: “We have to work together to deal with our problems, and it’s as simple as that. You have to decide if you’re a capitalist or not.” you are a socialist, ”he said.