Billionaire Leon Cooperman told CNBC on Wednesday he believes rich people would find ways to avoid paying Sen. Elizabeth Warren‘s wealth tax if it were to become law. He also argued there are better mechanisms to raise federal government revenue.
“The idea has no merit. It’s foolish. It probably is not legal,” he said on “Squawk Box.”
“If the wealth tax passes, go out and buy yourself some gold because people are going to rush to find ways of hiding their wealth,” Cooperman added.
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 above $1 billion would be subject to an annual tax of 3%, or 3 cents, on every dollar above that threshold.
The backers of the wealth-tax proposal said it would raise at least $3 trillion in revenue over 10 years, citing an analysis from University of California-Berkeley economists Emmanuel Saez and Gabriel Zucman.
“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 contended the focus should be on reforming the existing systems to raise money. For example, he said he’s in favor of eliminating the so-called carried-interest loophole, which benefits managers of hedge funds and private equity funds.
“The question we have to coalesce around as a nation is what should the maximum tax rate be on wealthy people? Because that will define the revenue yield to the government and the government should basically assign its activity to that revenue yield,” added Cooperman, noting he’s long stated his willingness to “work six months a year for the government and six months for myself.” ‘
Warren said Tuesday on CNBC she believes the money brought in by the wealth tax could be “transformative” for the U.S., allowing for investments in early childhood education and infrastructure.
“It’s set up now to say we’re not going to collect taxes on any asset worth less than $50,000, so this is not intrusive. It’s not about coming into people’s homes and valuing their Sub Zeros or figuring out what their 4-year-old cars are worth,” Warren said.
“But it says if you’ve got a fortune above $50 million, you pay on it. And if your fortune is below $50 million, you don’t. Good for you, either way,” she added. “I think most people would rather be rich and pay 2 cents. This is not very fancy. It really is a tax on fortunes above $50 million.”
Cooperman was a vocal opponent of Warren’s previous pitch for a wealth tax during her unsuccessful campaign for the 2020 Democratic presidential nomination.
In October 2019, Cooperman wrote a sharply critical letter to Warren, saying her “vilification of the rich is misguided.” Warren’s campaign ran an ad arguing for a wealth tax the next month, blasting billionaires including Cooperman.
After the campaign ad became public, Cooperman told CNBC the wealth tax would “be near impossible to police, and is probably unconstitutional.”
Cooperman, a hedge fund pioneer and son of a Bronx plumber, has signed The Giving Pledge, created by Bill and Melinda Gates and Warren Buffett. When asked Wednesday by CNBC’s Andrew Ross Sorkin if he would support a reform to a certain tax policy focused on inheritance, Cooperman said: “To be honest with you, I’m not focused on that because my plan is to give away all my money at death.”
Cooperman said he was worried about rhetoric that villainized wealthy people in the U.S. “We all have to work together to deal with our problems, and it’s as simple as that. You’ve got to decide whether you’re a capitalist or whether you’re a socialist,” he said.
