(Newsmax) Billionaire Ron Baron says Elizabeth Warren’s wealth tax isn’t the right idea when it comes to raising government revenue and reducing income inequality.
“I don’t think Elizabeth Warren would be successful ... if she were chosen president in getting through the policies that she’s proposing,” he told CNBC.
“It’s pretty nuts,” said Baron, who suggested a value-added tax, which puts levies on goods and services during each stage of production and sale, CNBC said.
The Massachusetts senator would apply a 2% tax on every dollar of net worth for households worth $50 million or more, and a 3% tax on every dollar of net worth beyond $1 billion, Reuters explained. According to Emmanuel Saez and Gabriel Zucman, both University of California at Berkeley economists, this would apply to around $11 trillion of holdings this year, producing revenue of at least $220 billion.
“Warren says if you’re successful because this country has allowed you to be successful ... then you shouldn’t be as successful as you are. You should have some of your money coming back, which just means you are taking jobs you would have created otherwise and give them away,” said the founder of Baron Capital, with $29.6 billion in assets under management.
Meanwhile, Vermont senator Bernie Sanders wants an “extreme wealth tax” would tax households with a net worth above $32 million at 1%, meaning a household with $32.5 million would pay a tax of $5,000. That tax would rise in increments, to 2% on net worth from $50 million to $250 million all the way up to 8% on wealth above $10 billion.
Sanders’ campaign estimated the plan, which would tax just the top 0.1% of U.S. households, would raise an estimated $4.35 trillion over the next decade.
Taxing wealth, not income, became a hot-button topic during the Democratic debate in Ohio on Oct. 15, with several of the other 10 candidates on the stage rejecting it as too radical.
Entrepreneur Andrew Yang said that implementing such a tax would be impractical. Former U.S. Representative Beto O’Rourke called it “punitive.” Amy Klobuchar, the Minnesota senator, said “when I look at this, I think about Donald Trump,” suggesting that it would be so unpopular it could help the Republican president’s re-election.
Meanwhile, Baron said "fear is evident” in the stock market, but that should not deter people from investing in stocks.
For investors 50 years ago, “all you had to do was believe that this country was going to survive and invest then and you would have made 25 times your money,” Baron said.
“I’m thinking the next 50 years is going to be similar to the last 50 years,” he says.
Baron predicted the Dow Jones Industrial Average, based on historical moves over decades, will reach 650,000 in 50 years, with an over $500 trillion U.S. economy.
The Dow Jones Industrial Average near midday Friday rose 195 points, or 0.7%, to 27,000.
For his part, billionaire investor George Soros proclaims he is in favor of making the rich, wealthy and powerful pay their fair share.
“I am in favor of taxing the rich,” he told the New York Times, “including a wealth tax.”
Soros admitted that view is in synch with one of Senator Elizabeth Warren’s central policies, but Soros acknowledges that his view “does create a moral problem for me.”
He added: “As I became so successful, it basically put a self-imposed constraint on me that actually interfered with making money.”
In June, Soros was among the wealthy individuals who signed onto a letter in support of Warren’s wealth tax proposal. That letter, billed as “nonpartisan,” also noted that it should not be construed as an endorsement, CNBC explained.
