Elizabeth Warren calls out Jeff Bezos in her latest wealth tax campaign: ‘I’m looking at you’

Sen. Elizabeth Warren and Amazon CEO Jeff Bezos.
Sen. Elizabeth Warren and former Amazon CEO Jeff Bezos.

  • In a CNBC interview on wealth taxes, Sen. Elizabeth Warren again called out Jeff Bezos.
  • Warren has repeatedly criticized Bezos over how much he pays in taxes, especially following his space adventure.
  • Under Warren’s proposed measure, Bezos would have paid $5.7 billion in taxes in 2020.
  • See more stories on Insider’s business page.

In an interview with CNBC’s Squawk Box, Sen. Elizabeth Warren again took aim at now-earthbound billionaire Jeff Bezos in her latest push for a wealth tax.

When it comes to taxing the assets of America’s wealthiest, Warren said, “it shouldn’t make a difference whether you have real estate, or whether you have cash, or whether you have a bazillion shares of Amazon.”

“Yes, Jeff Bezos, I’m looking at you,” she said.

Warren has repeatedly taken aim at billionaire Bezos over how much he pays in taxes. ProPublica recently revealed that Bezos reportedly did not pay income taxes for two years, and that he received a $4,000 tax credit in 2011 meant for families earning under $100,000.

Earlier this week, Warren tweeted that “the richest guy on Earth can launch himself into space while over half the country lives paycheck to paycheck, nearly 43 million are saddled with student debt, and child care costs force millions out of work. He can afford to pitch in so everyone else gets a chance.”

She also criticized his comments thanking every Amazon employee and customer for funding his foray, where Bezos said “you guys paid for all of this.”

“Jeff Bezos forgot to thank all the hardworking Americans who actually paid taxes to keep this country running while he and Amazon paid nothing,” Warren tweeted.

Amazon did not immediately respond to Insider’s request for comment.

Warren has repeatedly called for a wealth tax

Warren campaigned on a wealth tax in her failed 2020 presidential run, and continues to push for legislation that targets America’s highest earners.

Under her most recent proposal, the Ultra-Millionaire Tax Act, households with a net worth of $50 million or more would see at least a 2% tax on their assets. Those with over $1 billion would have a 3% tax – what Warren called a “tiny little tax” on CNBC.

“But notice, if we put that tiny little tax in place, that would be enough to pay for universal childcare, enough to pay for our kids to be able to go to college, enough for us to pay for all of those roads and bridges and bring them into the 21st century,” Warren said.

Wealth taxes, and taxes on high-earners, have recently claimed the spotlight amidst a push to fund President Joe Biden’s infrastructure package. While Biden did not propose an outright wealth tax, some of his measures would target America’s highest earners. He also proposed increasing IRS funding, which could raise an additional $700 billion over 10 years. Those proposals came after a study from IRS researchers and academics found the top 1% of Americans fail to report about a quarter of their income to the IRS.

Per an analysis from Americans for Tax Fairness and the Institute for Policy Studies Project on Inequality found that, Bezos would have ponied up $5.7 billion in taxes in 2020 under Warren’s wealth tax.

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Warren Buffett defends himself after ProPublica says he avoids taxes

warren buffett
Warren Buffett

  • ProPublica reported this week that Warren Buffett pays relatively little income tax, despite huge gains in his wealth.
  • The investor pays minimal tax by holding Berkshire Hathaway stock and not paying a dividend.
  • Buffett pointed out that shareholders don’t want a dividend and he’s giving his fortune away.
  • See more stories on Insider’s business page.

Warren Buffett minimizes his personal tax bill by keeping his fortune in Berkshire Hathaway stock and not paying a dividend, ProPublica said in an investigative report published on Tuesday.

The billionaire investor and Berkshire CEO defended himself in a detailed statement to the news outlet, explaining that his shareholders don’t want a dividend, and saying he’s on track to give virtually all of his money to good causes.

ProPublica analyzed Buffett’s income-tax returns between 2014 and 2018 and determined that even though his wealth grew by $24 billion in that period, he only reported $125 million of income and paid just $24 million in taxes.

“No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire,” ProPublica declared. It added that Buffett’s annual income of $12 million to $25 million between 2015 and 2018 was tiny; more than 14,000 US taxpayers reported a higher income than he did in 2015.

Buffett responded to ProPublica’s main assertions – that he squirrels away his money in Berkshire stock and eschews a dividend to keep his tax bill low – with 23 pages of documents. They included a written statement, as well as excerpts from several of Berkshire’s annual reports, news releases, and photocopies of newspaper and magazine stories.

The investor pointed out that Berkshire shareholders overwhelmingly prefer the company to reinvest its profits instead of paying a dividend, as they know a big chunk of the funds will ultimately go towards good causes.

“Many large shareholders, including me, enjoy the long-term buildup in value, knowing that it is destined for philanthropy, not consumption or dynastic aspirations,” Buffett said.

The investor highlighted that holders of Berkshire’s “A” shares voted 87-1 against a dividend in 2014, and “B” shareholders voted 47-1. He likely wanted to show that Berkshire doesn’t pay a dividend because the vast majority of its shareholders don’t want one, not because he wants to lower his personal tax bill.

Buffett defended his decision to keep virtually all of his fortune in Berkshire stock. The 90-year-old billionaire has pledged to give over 99% of his net worth to philanthropic causes, and has already donated about half of his nearly 475,000 “A” shares since 2006, he said.

Moreover, Buffett calculated the tax benefits from his donations to date at less than 50 cents for every $1,000 he’s given away. He also prefers to hand his cash to charities, instead of giving it to the federal government to pay off the national debt.

“I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt,” he said.

Buffett reiterated his support for changes to the tax code that would reduce wealth inequality.

“I hope that the earned-income tax credit is greatly expanded and additionally believe that huge dynastic wealth is not desirable for our society,” he said.

Buffett attached photocopies of a Fortune cover story from 1986 to his statement. It was titled, “Should you leave it all to the children?” and included his advice on how much to pass down: “Enough money so that they would feel they could do anything, but not so much that they could do nothing.”

Read the original article on Business Insider

Warren Buffett defends himself after ProPublica says he avoids taxes and pegs his ‘true tax rate’ at 0.1%

warren buffett
Warren Buffett

  • Warren Buffett’s “true tax rate” is 0.1%, ProPublica reported this week.
  • The investor pays minimal tax by holding Berkshire Hathaway stock and not paying a dividend.
  • Buffett pointed out that shareholders don’t want a dividend and he’s giving his fortune away.
  • See more stories on Insider’s business page.

Warren Buffett’s real income-tax rate is 0.1%, and he minimizes his personal tax bill by keeping his fortune in Berkshire Hathaway stock and not paying a dividend, ProPublica said in an investigative report published on Tuesday.

The billionaire investor and Berkshire CEO defended himself in a detailed statement to the news outlet, explaining that his shareholders don’t want a dividend, and saying he’s on track to give virtually all of his money to good causes.

ProPublica analyzed Buffett’s income-tax returns between 2014 and 2018 and determined that even though his wealth grew by $24 billion in that period, he only reported $125 million of income and paid just $24 million in taxes. That put his “true tax rate” below the almost 1% paid by Amazon CEO Jeff Bezos and well below Tesla CEO Elon Musk’s 3.3%.

“No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire,” ProPublica declared. It added that Buffett’s annual income of $12 million to $25 million between 2015 and 2018 was tiny; more than 14,000 US taxpayers reported a higher income than he did in 2015.

Buffett responded to ProPublica’s main assertions – that he squirrels away his money in Berkshire stock and eschews a dividend to keep his tax bill low – with 23 pages of documents. They included a written statement, as well as excerpts from several of Berkshire’s annual reports, news releases, and photocopies of newspaper and magazine stories.

The investor pointed out that Berkshire shareholders overwhelming prefer the company to reinvest its profits instead of paying a dividend, as they know a big chunk of the funds will ultimately go towards good causes.

“Many large shareholders, including me, enjoy the long-term buildup in value, knowing that it is destined for philanthropy, not consumption or dynastic aspirations,” Buffett said.

The investor highlighted that holders of Berkshire’s “A” shares voted 87-1 against a dividend in 2014, and “B” shareholders voted 47-1. He likely wanted to show that Berkshire doesn’t pay a dividend because the vast majority of its shareholders don’t want one, not because he wants to lower his personal tax bill.

Buffett defended his decision to keep virtually all of his fortune in Berkshire stock. The 90-year-old billionaire has pledged to give over 99% of his net worth to philanthropic causes, and has already donated about half of his nearly 475,000 “A” shares since 2006, he said.

Moreover, Buffett calculated the tax benefits from his donations to date at less than 50 cents for every $1,000 he’s given away. He also prefers to hand his cash to charities, instead of giving it to the federal government to pay off the national debt.

“I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing US debt,” he said.

Buffett reiterated his support for changes to the tax code that would reduce wealth inequality.

“I hope that the earned-income tax credit is greatly expanded and additionally believe that huge dynastic wealth is not desirable for our society,” he said.

Buffett attached photocopies of a Fortune cover story from 1986 to his statement. It was titled, “Should you leave it all to the children?” and included his advice on how much to pass down: “Enough money so that they would feel they could do anything, but not so much that they could do nothing.”

Read the original article on Business Insider

I’m a millionaire. Biden’s plan to raise my taxes is a great idea.

Biden
President Biden looks on while delivering a speech.

  • An opinion in the Wall Street Journal states that Biden’s plan to raise taxes on the rich will adversely affect investing.
  • But wealthy people are going to invest no matter how high their taxes are.
  • It’s time to finally raise taxes on the rich, and use the money to make the country stronger.
  • Morris Pearl is the Chair of the Patriotic Millionaires.
  • This is an opinion column. The thoughts expressed are those of the author.
  • See more stories on Insider’s business page.

The campaign against President Biden’s proposed tax hikes on the wealthy is in full swing, and much like the campaign in favor of President Trump’s tax cuts for the wealthy in 2017, so far it’s based more on misinformation than fact.

A recent editorial from the Wall Street Journal Editorial Board bashing a capital gains tax hike as “The Dumbest Tax Increase” is a prime example. The editorial lays out a series of arguments against raising taxes on millionaire investors that, as a millionaire investor myself, come across as glaringly misleading and factually incorrect.

The centerpiece of the argument against increasing capital gains tax rates is that doing so will change how wealthy people invest. But as venture capitalist Alan Patricof recently stated, wealthy people are going to continue to invest no matter what the capital gains tax rate is. The only other alternative is to either spend their money or keep it in a shoe box under their bed.

I’m rich. Tax me.

In an economy with a glut of investment capital and a shortage of consumer demand, it wouldn’t be such a bad thing to have rich people spending more. If the explosion of stock prices, real estate prices, SPACS, cryptocurrency, NFTs, and other speculative investments indicates anything, it’s that rich people may just have too much money and not enough ways to invest it productively.

Research shows the majority of stocks in the US are held in accounts that are exempt from the capital gains tax. Over the last 50 years, the percentage of publicly traded US stocks held in taxable accounts has gone from over 80% to under 25%. So even if we accept the erroneous argument that capital gains taxes will alter investor behavior, 25% still likely wouldn’t be enough for those changes to have a significant impact on the economy. The fact that the WSJ Editorial Board chose to include a John F. Kennedy quote from 1963 about the effects of capital gains while ignoring key changes that have taken place in our economy since then, like the number of stocks in taxable accounts, is emblematic of the ways opponents of Biden’s tax plan cherry pick and de-contextualize facts.

It’s true that inflation and the inability to fully deduct losses on investments will leave some wealthy investors paying more than they might otherwise, and that taxing capital gains in addition to levying corporate taxes could be interpreted as “double taxation,” which further limits the earnings of rich stock owners. But that’s kind of the point.

The Biden tax proposal is designed to make wealthy investors pay higher taxes – it’s not a sign that the proposal is bad if it’s making investors who earn over a million dollars a year pay higher taxes because that’s what it is intended to do. This is a feature of the Biden tax plan, not a bug, no matter how much those millionaire and billionaire investors may complain about it. Everyone who is making that much money can afford to pay higher taxes, and our country needs them to.

It is absurd that wealthy investors like myself pay lower tax rates than Americans who actually work for a living. Any change that will bring more fairness to the tax code and shrink the out-of-control inequality threatening our society is worth doing on that basis alone, regardless of all the good for which the potential new revenue can be used.

American billionaires saw their wealth grow by $1.3 trillion during the global pandemic, while working class families, women, and communities of color all disproportionately felt the enormous financial fallout. This gross wealth inequality, including the transfer of wealth from the middle class to the ultra wealthy, has existed in our country for decades, but it’s reached unsustainable levels in recent years. A tax plan that starts to reverse this trend isn’t “dumb,” it’s sorely needed.

The current state of our tax code is failing everyone – including the salaried employees of the Wall Street Journal and the staff members of Republican members of Congress opposing Biden’s tax plan – except those at the top. The status quo is broken, and Biden’s plan to raise taxes on capital gains is exactly the change this country needs. It’s time we embrace something new and tax the rich.

Read the original article on Business Insider

Joe Biden wants to tax the wealthy without creating a wealth tax, even though it’s overwhelmingly popular

amtrak joe biden
President Joe Biden.

  • As infrastructure talks begin to heat up, taxes – and how much they’ll go up – will be a hot topic.
  • Yes, Biden wants to raise taxes on the wealthy, but he doesn’t want to do an outright wealth tax.
  • It’s an important distinction, as Biden is proposing tweaks to already existing programs.
  • See more stories on Insider’s business page.

Yes, President Joe Biden wants to tax the wealthiest Americans. But he wouldn’t do it with a wealth tax.

It may seem like a small difference, but it’s a significant one. A wealth tax is an outright tax on someone’s net worth, while Biden is proposing changes to existing taxes.

Of course, there’s a famous example of a wealth tax from one of Biden’s rivals from the 2020 campaign: Sen. Elizabeth Warren’s Ultra-Millionaire Tax Act, which would levy additional taxes on those with a net worth of $50 million or more.

White House Press Secretary Jen Psaki broke it down at a March press briefing: “I know Sen. Warren has put forward a wealth tax, and the president shares her view that middle-class families are paying more than their fair share and those at the top are not doing their part, so certainly he has that shared objective,” before continuing, “He laid out during the campaign his own plans for fixing this, which are different from Sen. Warren’s.”

When he talks about raising taxes, Biden’s tone strikes notes of Warren and Sanders, saying hikes won’t impact the wealthiest’s standard of living or “deprive” them of their second or third homes, and he’s “sick and tired of ordinary people being fleeced.”

But he’s not legislating like Warren and leaning into an outright wealth tax (even though it’s consistently popular). Instead, he’s opting for more of a backdoor, with a series of complex reforms that may be more palatable to lawmakers. It shows the potential limitations of how far left Biden is willing to – or thinks he can – go.

Biden would raise the income tax rate to 39.6% for Americans earning over $400,000, and would increase the rate of tax on assets – called capital gains – to be in line with that 39.6% income tax, rather than the current lower rate of around 20%. He also wants to ramp up IRS enforcement on the ultrawealthy, who have been found to hide billions. He also wants to close up loopholes like the stepped-up basis, which can provide massive tax relief on inherited properties.

“While there may be some overlap in the people – the subset of the population – being hit by these tax hikes, the design is very different,” Garrett Watson, a senior policy analyst at the Tax Foundation, told Insider of the difference between the two plans. “One is hitting income, and the other is taxing the stock of wealth or someone’s net worth.”

The Biden White House hasn’t totally dismissed the idea of an outright wealth tax, but it hasn’t supported it, either. Treasury Secretary Janet Yellen cited implementation problems as one reason it would be difficult to execute, but never fully ruled it out.

How Biden’s proposal would impact the wealthy

That difference in design could actually have a disparate impact on the wealthiest Americans, according to David Gamage, a law professor at Indiana University who recently testified in front of Warren and a Senate Finance subcommittee on wealth taxes.

Biden’s proposal to hike the capital-gains rate would have a big impact on some of the very wealthy, Gamage told Insider. Specifically, he said, people like Wall Street financiers earn most of their income from capital gains (like selling off stocks increasing in value). That means they essentially pay half the tax rate on their income, unlike people drawing a straightforward salary.

But then there’s people like Elon Musk and Bill Gates and Warren Buffett.

“Most of their wealth or economic income is in the form of their stuff they own going up in value because of the things they’ve done, primarily stock,” Gamage said, “and until they sell that stock – which they’re never going to do, for the most part, because there’s ways around that – it wouldn’t be included in the tax space.”

Things like closing some potential loopholes, including the stepped-up basis, which taxes an inheritance on the value it’s inherited at – not value it gained while held by its prior owner – could potentially have a big impact on megamillionaires and billionaires, said Gamage.

But, according to Bill Smith, managing director for CBIZ MHM’s national tax office, said that getting through those loopholes adjustments could be paramount; he said it could be a “money-loser” if it just taxes capital gains alone, because people might hold off on selling them.

What it all means

If all of that sounds a bit confusing to you, you’re not alone.

Frank Clemente, president of Americans for Tax Fairness, noted that wealth taxes often poll well – and that could be because of how straightforward they are.

“I think that it does so well in polls because it’s easy to understand. It’s very clear. It does not hit people,” Clemente said. “If you’re assessing a wealth tax on $50 million, everybody knows they’re not at $50 million except for a very small slice of the population.” Clemente, a wealth tax advocate, said he wishes Biden had been a bit bolder in his proposals, but thinks he “calibrated his position to what he thinks he could get through Congress.”

However, that doesn’t mean talks of a wealth tax will simply just go away; Smith said he doesn’t think that we’re done with an either/or situation.

“I think the Biden proposals have a number of steps in the right direction, but we need more than what’s currently being proposed to really fix the deep flaws in the income tax,” Gamage said, noting that a proposal like Biden’s could work well in tandem with Warren’s wealth tax.

And what’s been proposed isn’t final yet. There’s a long road of negotiations over different economic packages and their funding ahead. It’ll be a hot tax summer, as politicians argue over how they’ll change and who will pay them. Currently, the top 1% of tax filers would shoulder the burden of proposed changes on individuals, paying $100,000 more annually.

“It’ll be interesting to see how this stuff moves through Congress,” Watson said.

For his part, Biden has vocally defended the tax measures laid out in his plans, emphasizing fairness and equity.

“This is about making the average multimillionaire pay just a fair share,” he said in one fiery address. “It’s not going to affect their standard of living a little bit.”

But it also won’t target their wealth.

Read the original article on Business Insider

A group of millionaires is organizing Tax Day protests – including one in front of Jeff Bezos’ house – encouraging higher taxes on the rich

Jeff Bezos
  • A protest outside of Jeff Bezos’ home in New York will urge him to back a wealth tax.
  • The protests are happening on Tax Day and are run by a group called Patriotic Millionaires.
  • In addition to the protest, the group sponsored billboards in D.C. and New York urging tax reform.
  • See more stories on Insider’s business page.

“As a millionaire, tax me more.” That’s the motto of members of the Patriotic Millionaires group, which is organizing protests and mobile billboards on Tax Day encouraging higher taxes for the rich.

The three mobile billboards, which feature videos of well-known billionaires like Jeff Bezos, Elon Musk, and Mark Zuckerberg, will drive through New York City and Washington, D.C. on Monday, Tax Day. In a press release, the group said that the aim of the events is ” challenging the faces of wealth inequality in this country and calling for higher taxes on the rich.”

The group is also organizing an in-person protest outside of Bezos’ New York apartment complete with signs that say “Cut the bull—-. Tax the rich” and other slogans encouraging higher taxes on millionaires and billionaires. CNBC first reported the initiative on Monday.

The billboards will also make stops in front of homes of lawmakers like Mitch McConnell and Chuck Schumer, who recently said “the wealthy ought to pay a much fairer share” of taxes and that many large companies and wealthy individuals “don’t pay any taxes at all.”

The group accepts members with annual incomes over $1 million or assets valued at over $5 million, according to CNBC, and has over 15,000 followers on Twitter. Its website describes its focus as advocating for “a guaranteed living wage for all working citizens, and a fair tax system.”

Millionaire members include Morris Pearl, who chairs the group and was a former executive at BlackRock, and documentarian Abigail Disney, according to the Tax the Rich website.

Jeff Bezos, the wealthiest person in the world, and Amazon have often been a talking point in discussions critical of the country’s tax code. Amazon itself paid no federal corporate income taxes for years because the value of its tax rebates exceeded the federal corporate income tax requirements, according to reporting from Insider.

In April of this year, Bezos said Amazon is in favor of a new corporate tax structure proposed as part of Joe Biden’s infrastructure plan.

Patriotic Millionaires supports Sen. Elizabeth Warren’s proposal for a wealth tax, which Insider reported in April would have netted $114 billion from billionaires if it had gone into effect for the 2020 tax year.

After Joe Biden released the Made in America tax plan to increase the corporate tax rate, the chairman of Patriotic Millionaires said in a press release that “while there is still an urgent need to have wealth taxed the same as work on an individual level, the tax proposal introduced today sends a strong signal that the Administration recognizes that our current tax code is broken and riddled with loopholes.”

And in April of this year, New York passed state legislation that included a wealth tax that taxes millionaires at higher rates than any other state. The tax hikes would go into effect for around 50,000 taxpayers in the state, according to the New York Times.

Amazon and the offices of Senator McConnell did not immediately respond to a request for comment.

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Elizabeth Warren bashed cryptocurrencies’ environmental impact, said big tech firms should be broken up, and called for a wealth tax in a new interview. Here are the 8 best quotes.

Elizabeth Warren
Elizabeth Warren

  • Elizabeth Warren sat down for an interview with Yahoo Finance on Thursday.
  • The Democratic Senator from Mass. said that big tech companies are a “threat to our democracy” and should be broken up.
  • Warren also bashed bitcoin’s environmental impact and reiterated her calls for a wealth tax. Detailed below are her eight best quotes.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Elizabeth Warren sat down for an interview with Yahoo Finance’s editor-in-chief Andrew Serwer on Thursday and laid into big tech companies, cryptocurrencies, and the ultra-wealthy.

Warren said that she was happy that Trump has been removed from Facebook, but questioned the power of big tech companies to be able to make that choice.

The Democratic Senator from Massachusetts also touched on inflation, arguing concerns are overblown and only being mentioned because of democratic spending programs.

Warren then discussed some of her concerns around Robinhood and retail investing, and called for a wealth tax on top US earners.

Here are Warren’s 8 best quotes from the interview, lightly edited and condensed for clarity:

  1. “I also think with bitcoin and the other cryptocurrencies, I think there’s a real issue about the environmental impact as well. This whole notion of how much energy is consumed just to keep the currency tracking going, you know, you don’t consume that kind of energy in order to have money on deposit at a bank or a mutual fund. In that sense, bitcoin is very different and in the 21st century we’re becoming a lot more sensitive to the worldwide impacts of the choices we make.”
  2. “Well, first, I’m glad that Donald Trump’s not going to be on Facebook, suits me. But part two is that this is a further demonstration that these giant tech companies are way, way, way to powerful. And listen to the arrogance of it. The name of the group that made this decision is called ‘the Supreme Court.'”
  3. “We need to break up these big tech companies and we need to do it for two reasons. One is a pretty straightforward economic reason…Amazon’s the easiest one…You want to buy or sell goods on that platform you have to go to Amazon. Amazon makes money doing that, but they also rake off all the information…so Amazon goes let’s see what else is happening here. Andy is running a pet food business…it’s turning out really good so we’ll just turn this into NBO’s pet food business and move Andy back to page seven and just scoop up all the business. Anticompetitive. So they need to be broken up in order to keep commerce flourishing. You can either run the platform or compete in the businesses, but you don’t get to do both at the same time.”
  4. “The second reason we need to break these guys up is how much political power they have. The idea that they get to decide whose voice gets heard and who doesn’t and they do that on their own with something they call a ‘supreme court.’ No, no, they have too much influence and they pose a threat to our democracy.”
  5. “No, look every time democrats talk about making investments into the economy a bunch of Republicans, and Larry Summers, stand up and say ‘oh inflation.’ Notice they don’t talk about it during tax cuts…if inflation moves we have a lot of tools to deal with it.”
  6. “My principle issue with Robinhood is how much they actually disclose to their customer about how their customers’ data and trades are being used. I worry a lot about these companies that get out and appear one kind of good guy model and it actually turns out they are not this little scrappy upstart they are actually fronting for giant companies that are making money, not only in the trades, but making money harvesting the information ahead of everyone else in terms of what those trades are doing.”
  7. “What I want to see here is I want to see the SEC take a close look. I think it’s time for the SEC to update its regulations on disclosure but also on what business models ought to be permissible in a market.”
  8. “We need a wealth tax in America…the difference between the top and the bottom in income is big, but the difference between the top and the bottom in wealth is orders of magnitude bigger….I have proposed a wealth tax, a two percent tax on fortunes above $50 million, a little bit more if you have a billion or more in assets. That would produce $3 trillion in revenue over ten years.”

Read more: The head of global macro strategy at Delphi Digital breaks down why Bitcoin’s price has more room to run over the next 9 to 12 months in 4 charts – and shares what the next 10 years could look like for the emerging crypto economy

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Critics say a wealth tax wouldn’t work. Argentina just brought in $2.4 billion with one.

Congress in Buenos Aires, Argentina.
Congress in Buenos Aires, Argentina.

  • A one-off tax on Argentinian’s wealthiest brought in around $2.4 billion for pandemic recovery.
  • The measure was passed in December, as worldwide critics of wealth taxes said they weren’t feasible.
  • Critics say they’re difficult to implement, and the ultrawealthy will dodge them, but Argentina raised more than expected.
  • See more stories on Insider’s business page.

A one-off wealth tax on the wealthiest Argentinians brought in around $2.4 billion to help address pandemic costs, according to the Buenos Aires Times.

In December, Argentina’s Congress voted to pass a levy on those with assets over 200 million pesos, Insider’s Joshua Zitser reported. The measure passed by 42 to 26 votes, although it did see some intense political opposition. According to the BBC, the tax was only set to impact the top 0.8% of the population, and about 10,000 people ended up paying the tax, according to some early data. They saw a levy of up to 5.25% on their total assets.

Argentina’s wealthiest reportedly pushed back on the tax, with some moving to take legal action. Others procrastinated on paying; payments were due April 16, but the Buenos Aires Times reported that only 2% of taxpayers subject to the tax had paid up by early April.

The revenue raised will go toward areas impacted by the pandemic, like housing, scholarships, public health, and relief for small businesses. Overall, the amount that the taxes brought in comes to about 0.5% of the country’s GDP, according to the Buenos Aires Times. The newspaper reported this was a higher amount than expected.

As the subject of wealth taxes has gained steam internationally during the pandemic, critics have emerged, citing issues ranging from feasibility to even legality. Argentina’s example suggests their critiques could be wrong, and wealth taxes have viability.

One-off wealth taxes have emerged as a possible pandemic recovery solution

The International Monetary Fund has said that temporary taxes on the wealthy could help the global economy rebound from the coronavirus recession. That statement from the IMF marked a major shift from its own policies – and perhaps highlights the increased traction of one-off wealth taxes as a way to curb inequality and help economies rebound from pandemic devastation.

Experts in the UK also called for a one-off measure in December, saying it could bring in around 260 billion pounds. The Wealth Tax Commission was proposing a 1% tax on wealth over £500,000 for five years. One-off taxes do have some precedent in the UK, and potential taxes on wealth may still be looming across the pond.

On this side of the Atlantic, Sen. Elizabeth Warren has been an outspoken advocate for a straightforward wealth tax on Americans with a net worth of $50 million or more. Her proposal – which would be permanent – could bring in $1.4 trillion over 10 years. A majority of Americans support a wealth tax as a way to curb inequality.

Read more: Advisors to the wealthy are fielding a frenzy of calls from clients worried about estate planning and taxes. Here’s how they’re navigating the chaos.

One of the most prominent wealth-tax critics has been billionaire Leon Cooperman; he’s said that he doesn’t think a wealth tax is intelligent or legal. He’s also said the ultrawealthy would hide their assets. That’s an assertion that’s been echoed by inequality expert and Nobel Prize-winning economist Angus Deaton: He told Bloomberg that a wealth tax would be difficult to implement, and the wealthy would try to avoid it.

President Joe Biden seems to be opting for taxes that target the wealthy, but don’t necessarily constitute a wealth tax. He’s proposed, among other measures, raising the income tax rate for Americans making over $400,000, upping the tax rates on capital gains, and increasing the corporate tax rate.

“It’s time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share,” Biden said in his address to the joint session of Congress.

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Nancy Pelosi slams GOP ‘tax scam’ of 2017 in defending Biden’s wealthy tax hike

nancy pelosi
House Speaker Nancy Pelosi (D-CA).

  • Nancy Pelosi defended the proposed tax hikes to fund Biden’s $4 trillion infrastructure plans.
  • She told MSNBC the hikes are a response to the GOP “tax scam” of 2017, which benefited the wealthy.
  • GOP lawmakers have strongly opposed the hikes, calling them part of a “socialist vision” for the country.
  • See more stories on Insider’s business page.

Ahead of President Joe Biden’s unveiling of his $1.8 trillion infrastructure plan on Wednesday, Speaker of the House Nancy Pelosi spoke out in defense of the president’s tax increase proposals to fund the plan.

Pelosi joined MSNBC’s Andrea Mitchell on Wednesday afternoon to talk about Biden’s progress since he took office, and she was quick to defend the tax hikes to fund his infrastructure plan, which Republicans have strongly opposed.

She said Biden’s tax hikes are in response to the Republicans’ 2017 tax cuts.

“We’re on a better path for the people,” Pelosi told MSNBC. “What he [Biden] is talking about is exactly just to reverse some of what the Republicans did in their tax scam where they added almost $2 trillion to the national debt, if you include the cost and the interest on the debt, to give tax breaks to the top, top, wealthiest people in the country.”

Pelosi also said that Biden’s plan, which includes funding for universal pre-K and free community college, is “transformative” and works to directly aid Americans.

Pelosi was referring to former President Donald Trump’s 2017 Tax Cuts and Jobs Act, which gave higher-income households larger average tax cuts than lower-income households. This plan was criticized at the time by Democrats who argued that the wealthy should pay their fair share in taxes, and prompted legislation from lawmakers like Sen. Elizabeth Warren, who recently introduced an ultramillionare tax on the wealthiest Americans.

Biden originally proposed a corporate tax hike from 21% to 28% to fund his infrastructure plan, but has since expressed willingness to negotiate on the size and scope of the plan to get Republicans on board. The international average is around 25%, a rate with which Biden would reportedly be comfortable. The 2017 tax cut slashed the rate down from 35%, although American corporations have contributed a lower percentage to GDP than the international average for two decades, per JPMorgan research.

“I am prepared to compromise, prepared to see what we can do and what we can get together on,” Biden said at a bipartisan infrastructure meeting last week. “It’s a big package, but there are a lot of needs.”

But even so, Republicans would rather see a plan funded without any form of an income or corporate tax increase. A group of Republicans introduced a counter-proposal to Biden’s infrastructure plan which would cost between $600 billion and $800 billion, and would be funded by user-fees, like a gas tax, instead of tax hikes.

Senate Minority Whip John Thune tweeted on Tuesday that Biden’s proposed tax hikes are part of a “socialist vision” for the country, repeating the Republican Party’s now-familiar playbook to label any Democratic policy proposal as socialist.

In separate remarks in Congress today, Senate Minority Leader Mitch McConnell reiterated his opposition to Biden’s infrastructure plans, calling them “another multitrillion-dollar smorgasbord of liberal social engineering.”

Polls show American voters overwhelmingly like the things Republicans would like to strip out of Biden’s first infrastructure plan, and support raising corporate taxes to pay for them.

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Billionaire Leon Cooperman rejects Elizabeth Warren’s invitation to testify on a possible wealth tax

leon cooperman crying about taxes on cnbc
Leon Cooperman.

  • Billionaire Leon Cooperman has rejected Sen. Elizabeth Warren’s invitation to testify on a wealth tax.
  • In a response viewed by Insider, Cooperman said the invitation is “self-serving and disingenuous.”
  • Warren said she gave him a response to make a case instead of “just complaining on TV.”
  • See more stories on Insider’s business page.

Sen. Elizabeth Warren’s invitation to testify at a Senate Finance subcommittee has been rejected by one of her outspoken critics, billionaire Leon Cooperman.

On Monday, Warren invited Cooperman to testify at her hearing, called “Creating Opportunity Through a Fairer Tax System.”

“This hearing is an opportunity to share your views on how to strengthen the nation’s tax system to address economic inequality, raise revenues to fund critical pro-growth investments in families and communities, and bolster our long-term fiscal and economic outlooks,” Warren wrote in her invitation to Cooperman, which was viewed by Insider.

She gave him until Thursday, April 22 to respond; it seems as though he got back to her early, according to CNBC, which first reported on the invitation and Cooperman’s response.

Cooperman has turned down the invitation. In a response viewed by Insider, he wrote: “I find Senator Warren’s invitation self-serving and disingenuous.”

He also noted his continued support for a progressive income tax, and said that Congress should also look into eliminating some tax loopholes.

Cooperman added: “Most importantly, Congress should start examining in earnest how to fund progressive programs through revenue-neutral proposals that would cull bureaucratic waste rather than add further to administrative bloat – again, essential but boring, so not something of interest to most progressive politicians like Senator Warren.”

The two have a long history of vigorous back-and-forth on the wealth tax, a key proposal of Warren’s that she’s continually advocated for – and which Cooperman has continually derided. Their dialogue has included everything from a tweet from Warren asking Cooperman to “pitch in a bit more,” a five-page letter by Cooperman in response, and the inclusion of Cooperman’s position in one of Warren’s presidential campaign ads.

After Warren introduced her Ultra-Millionaire Tax Act, which would enact additional taxes on households with net worths $50 million and above, Cooperman went on CNBC to decry it, saying the rich would simply hide their assets.

In her invitation, Warren wrote: “The opportunity will allow you to fully air your views, not merely in front of the financial news audience where you often express them, but before the entirety of the American people.”

Warren wants a wealth tax to help tackle inequality

Warren has called for a wealth tax as one measure to help address inequality, which has grown during the pandemic. An analysis from economists Emmanuel Saez and Gabriel Zucman found that Warren’s proposed tax could raise at least $3 trillion over the next 10 years; according to one study, it would have brought in $114 billion from billionaires alone in 2020.

A wealth tax is also a popular measure among voters, with a recent poll from Hill-HarrisX finding that the majority of respondents see a wealth tax as a way to address inequality.

“Instead of just complaining on TV, I invited Leon Cooperman to come to the Senate to make his case for why billionaires like him shouldn’t pay a wealth tax,” Warren said in a tweet after Cooperman declined her invitation. “We should have a public discussion on our rigged tax system. I’ll still use the hearing to do that.”

As for Cooperman? He may have declined the invitation, but “I will, however, be sure to tune in for the show.”

Read the original article on Business Insider