'Go Out And Buy Gold' If Warren Wealth Tax Passes: Leon Cooperman

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by Tyler Durden
Wednesday, Mar 03, 2021 - 10:55 AM

Billionaire Leon Cooperman says Sen. Elizabeth Warren's (D-MA) "ultra-millionaire" wealth tax is a terrible idea because people will simply hide their wealth.

"The idea has no merit. It’s foolish. It probably is not legal," Cooperman told "Squawk Box" on Wednesday. "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."

Warren's tax scheme would levy a 2% annual tax on overall assets for those worth more than $50 million, and 3% on those worth over $1 billion, raising over $78 billion per year, according to an analysis by Bloomberg.

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. -CNBC

"I believe in the progressive income tax structure. I believe that rich people should pay more," said Cooperman, though he suggested that existing systems should instead be reformed in order to raise money - such as eliminating the so-called carried-interest loophole which benefits 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," Cooperman added.

Cooperman, chairman of the Omega Family Office, sharply opposed Warren's previous wealth tax pitch during her 2020 run for president - writing in a harshly worded letter to Warren that her "vilification of the rich is misguided," later telling CNBC that the wealth tax would be "near impossible to police, and probably unconstitutional."

On Tuesday, Warren told CNBC that she thinks the wealth tax could be "transformative" for the United States, which could then use the money for 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," she 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."

"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, 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.” -CNBC

Cooperman emphasized that he's worried about villainizing wealthy Americans - saying "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."