American billionaires call for upgrades to capitalism, starting with higher taxes on themselves

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American billionaires call for upgrades to capitalism, starting with higher taxes on themselves

Washington is split on the issue.

Several Democrats, including presidential hopefuls and senators Elizabeth Warren and Bernie Sanders, are campaigning on higher taxes on the wealthy. Freshman Congresswoman Alexandria Ocasio-Cortez — a self-proclaimed Democratic Socialist — has called for a tax rate as high as 70 percent. The plan, laid out in a CBS “60 Minutes” interview with Anderson Cooper, has had no shortage of push back from corporate America. Former Federal Reserve chairman Alan Greenspan for one, called it “a terrible idea.”

The inequality issue has fueled a revival of the debate between the two economic systems. President Donald Trump and some Republicans have warned of consequences if Democrats and therefore left-leaning ideologies win next year’s presidential election. During his State of the Union address last month, Trump said, “We are alarmed by new calls to adopt socialism in our country” and that “we renew our resolve that America will never be a socialist country.”

In re-writing the tax code in 2017, the GOP lowered tax rates, which advocates said would juice the economy and result in a larger GDP to pay for them. Individual taxes for the most part came down, as well as those on American companies.

Lee Cooperman, who signed Buffett and Gates’s Giving Pledge, has been critical of the left’s current progressive tax policies. Earlier this year, Amazon scrapped plans to open its so-called HQ2 amid opposition surrounding $3 billion in incentives the city and state promised Amazon.

“What we have is a bunch of candidates running on the Democratic ticket that are left-leaning, and that’s, in my opinion, very counterproductive and destructive,” said Cooperman, who has signed The Giving Pledge, meaning he agreed to donate most of his wealth to charitable causes.

Cooperman has said he would be open to paying higher taxes if they were spent wisely.

Other billionaires also say they’d be fine paying more. Among those publicly amenable to higher rates: Pimco co-founder Bill Gross, Mark Cuban and Starbucks founder Howard Schultz, who Forbes estimates has a net worth of $3.7 billion. Schultz said he was considering a bid for the White House as an independent to address the “crisis of capitalism in this country.”

Even with higher taxes, Dimon, Dalio and others are hardly backing socialism. Dalio made it clear that his education initiatives require reform, not throwing capitalism out the window. In his 2019 letter to shareholders, released alongside the bank’s 2018 annual report, Dimon said “socialism inevitably produces stagnation, corruption and often worse.”

“This would be as much a disaster for our country as it has been in the other places it’s been tried,” Dimon said. “I am not an advocate for unregulated, unvarnished, free-for-all capitalism. (Few people I know are.) But we shouldn’t forget that true freedom and free enterprise (capitalism) are, at some point, inexorably linked.”

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