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The Super Rich at Davos Are Scared of Alexandria Ocasio-Cortez's Proposal to Hike Taxes on the Wealthy
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=50000"><span class="small">Hugh Son and Brian Schwartz, CNBC</span></a>   
Tuesday, 22 January 2019 13:51

Excerpt: "The elite financiers attending the World Economic Forum are worried about the 70 percent tax rate on earnings above $10 million proposed by freshman Rep. Alexandria Ocasio-Cortez, D-N.Y."

Representative Alexandria Ocasio-Cortez, D-NY, addresses the Woman's March in Manhattan, January 19, 2019. (photo: Ira L. Black/Getty)
Representative Alexandria Ocasio-Cortez, D-NY, addresses the Woman's March in Manhattan, January 19, 2019. (photo: Ira L. Black/Getty)


The Super Rich at Davos Are Scared of Alexandria Ocasio-Cortez's Proposal to Hike Taxes on the Wealthy

By Hugh Son and Brian Schwartz, CNBC

22 January 19

 

he elite financiers attending the World Economic Forum are worried about the 70 percent tax rate on earnings above $10 million proposed by freshman Rep. Alexandria Ocasio-Cortez, D-N.Y.

"By the time we get to the presidential election, this is going to gain more momentum," said Minerd, who added that he would probably be personally impacted by it. "And I think the likelihood that a 70 percent tax rate, or something like that, becomes policy is actually very real."

The billionaires and millionaires attending Davos had misgivings about Ocasio-Cortez's proposal, which she made during a recent interview on CBS' "60 Minutes." A poll found that 59 percent of voters were in favor of the idea, and even 45 percent of Republicans liked it. The lawmaker has turned heads in Washington and on Wall Street with her left-wing economic rhetoric, despite only being sworn into office earlier this month. Ocasio-Cortez, who represents parts of Queens and the Bronx, identifies as a Democratic-Socialist.

In Davos, Stephen Schwarzman, the billionaire CEO of private equity giant Blackstone and Republican megadonor, said sarcastically that he is "wildly enthusiastic" about the lawmaker's proposed tax hike. He added that "the U.S. is the second most progressive tax regime in the world," meaning that tax rates climb along with higher incomes.

The remarks at Davos came a day after Ocasio-Cortez had even more harsh words about how the U.S. economy works.

"I do think a system that allows billionaires to exist when there are parts of Alabama where people are still getting ringworm because they don't have access to public health is wrong," she said at a New York event on Martin Luther King Day.

Ocasio-Cortez addressed this article in a tweet Tuesday. "It's wild that some people are more scared of a marginal tax rate than the fact that 40% of Americans struggle to pay for at least one basic need, like food or rent," she wrote.

Despite the bipartisan appeal of a tax increase on the wealthy, another billionaire financier dismissed the idea's chances, saying that Democrats angling for a 2020 victory wouldn't move that far to the left. "It's not going to happen – trust me," this billionaire said, declining to be identified.

Members of the Democratic establishment were bearish on the proposal's chances. Glenn Hutchins, founder of private equity firm Silver Lake Partners and a Democratic party donor, called Ocasio-Cortez's idea political posturing that wouldn't likely make it through Congress.

"The important thing in my view is not to try to score political points with having a 70 percent, very high tax rate. The important thing is to try to figure out a tax system that is both fair and efficient," Hutchins said. "You got to get something like that through the House, then you have to get it through the Senate, and then you have to get the president of the United States to sign it."

Hutchins contributed over $100,000 to the Democratic Senatorial Campaign Committee, the official political organization that helps Democrats get elected to the upper chamber. During the 2016 presidential election, he wrote a $50,000 check to the Hillary Clinton Action Fund, which supported Clinton's run for president and the Democratic National Committee.

The problem with the tax — nearly double the current top rate of 37 percent — is that rich people will simply figure out ways to shelter their income, and that will be a drag on productivity, Minerd said.

"The political pendulum is swinging," Minerd said. "The conservatives found out they're being held hostage by the extreme right. Now the Democrats are going to find out they're being held hostage by the extreme left."

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+14 # Rodion Raskolnikov 2019-01-22 17:01
Wow. It is just wonderful that the psychopaths at Davos are finally afraid of a Democrat. Bill Clinton was a great fan of the Davos billionaires club. He handed the Democratic party over to them. Now AOC and her news cohort of democrats are taking the party back. And that is scaring the Psychopaths of Davos.

Actually, the discussion at Davos has been more about the rise of left and right wing populism. Brexit and the emergence of the Gilet Jaunes in France made it impossible for Macron or May even to go to Davos. Trump does not dare go there either. It may be that more neo-liberal lackeys in government refuse to go to Davos for fear of a negative reaction from their growing populists movements.

It is time to globalize the Yellow Vests.
 
 
+1 # Robbee 2019-01-23 10:18
Quoting Rodion Raskolnikov 2019-01-22 17:01:
It is time to globalize the Yellow Vests.

- wouldn't that upset putin's fine applecart? comrade? "comrade nimby?"
 
 
+13 # DongiC 2019-01-23 04:50
It is time to identify that entrenched group of extremely powerful plutocrats who have fashioned a most beneficial tax policy for themselves. And, it is time to return to tax policies of the Eisenhower era to finance a progressive program for all our citizens. "Citizens United" must be repealed, by Constitutional amendment if necessary,
and estate taxes should be restored to former levels. Say, of the Eisenhower years again.

A huge progressive wave is forming. We must take the most of it, for the good of ordinary people everywhere.
 
 
+9 # Robbee 2019-01-23 10:07
The problem with the tax — nearly double the current top rate of 37 percent — is that rich people will simply figure out ways to shelter their income, and that will be a drag on productivity, Minerd said. - Hugh Son and Brian Schwartz, CNBC, 22 January 19

- oh dear?

wealthy earners would cheat on their taxes? and be less productive?

- oh dear? whatever shall we do?

once upon a time in eisenhowerland, 1953 - 1960, congress set the top marginal tax rate above 90%

did the economy suffer, or boom, in the 1950's?

were wages flat?

did bmillionaires suffer? gentrify middle-class neighborhoods? employ fewer servants? send kids to public schools? stop putting kids through college? stop eating out? cook their own meals? wash their own cars? layoff plant employees? ship factories to asia?

davos says that at 70% wealthy earners would cheat on their taxes? and be less productive? - oh dear? whatever shall we do?
 
 
-1 # johnmortl 2019-01-24 09:45
Unfortunately the world has changed since the 1950's, when the U.S. reigned supreme, with little competition. Europe was devastated by the war & saturation bombing & needed rebuilding. Not only were America factories whole, not suffering even a scratch, they now had the latest technology by the confiscation of all the copyrights & patents from Germany who had the most advanced science & technology at that time. Today there is not only competition from Europe, China & Japan but corporations can set up factories in many low wage countries like Mexico. Unfortunately you can't force investment, you have to woo it. It goes wherever it gets the highest return. See how China has risen, like a phenix, since allowing free enterprise & low taxes. As they said in the Soviet Union "They pretend to pay us & we pretend to work".
 
 
0 # Robbee 2019-01-25 10:02
Quoting johnmortl 2019-01-24 09:45:
Unfortunately you can't force investment, you have to woo it. It goes wherever it gets the highest return. See how China has risen, like a phenix, since allowing free enterprise & low taxes

- congress rewards "multinational" corporations that ship money, jobs and factories, they built here, to nations that outlaw unions, offer cheap labor

i deny that congress is obliged to tax reward multinationals for moving, and keeping, capital abroad - if other nations do this, i'd be quite surprised

when we the people get fleeced by our own congress, who pays for it? for every tax giveaway to corporations, american workers, that's who!

for example, 2017 tax giveaways to billionaires and humans shifted their tax burden to workers!

in the 1950's, when millionaires paid over 90% taxes on earnings? why didn't they hide their money in banks? keep it on the sidelines? refuse to participate in the economic boom? like capital stood on the sidelines during the great recession bust? until obama stimulated the economy?

simple! taxes force capital to WORK! if capital can sit around without any penalty? CAPITAL GETS LAZY!

right-size taxes are a predicate to a healthy economy!

when the top 10% earns more than the bottom 90% tax rates are not healthy! workers can't afford to carry capital at the current rate! the current rate of taxes is unsustainable! sorry!
 
 
-1 # johnmortl 2019-01-25 17:18
I respectfully suggest that you slowly re-read the first part of my comment which points out that Europe's infrastructure was decimated & other parts of the world hadn't developed to the extent needed for large scale industrializati on. Add to this The U.S. Government was awarding, U.S. based industries, the state of the art German patents & technology that they had confiscated. As I'm sure you are aware that these high taxes didn't last. They were lowered to compete with the growing recovery of Europe & Japan, along with U.S. corporations starting to move off shore. Had the taxes not been lowered the U.S. would now be at the economic level of Zimbabwe.
 
 
+6 # Anne Frank 2019-01-23 11:45
What the billionaires fear is that a limitation on their fabulous riches might jeopardize their present absolute control of U.S. politics. Would their funds continue to control the neoconservative deep state, the neoliberal (i.e., imperialist) corporate media, and Israeli expansionism?
 
 
-1 # johnmortl 2019-01-24 08:15
It's not only the supper rich that are worried about the proposed tax hike, middle class tax payers are also wary. As someone who has been around the block a few times I have seen this trick before. The amount of revenue that would be derived from those relatively few earning ten million dollars wouldn't increase revenue all that much. It's only cosmetic, so that we let our guard down. The trick is to have us think that it would only affect the supper rich and not us. Then under the guise of the said reform all our taxes would magically go up a little. Even a percent or two on millions brings in far more revenue than 70% on one percent of the population. Politicians use tax money to bribe us. Where do they get this tax money from?