Cramer says ‘tone deaf’ billionaires should support tax reforms or get walloped by DC
CNBC’s Jim Cramer on Wednesday called on billionaires in the U.S. to more vocally support reforms to the nation’s tax code in an attempt to stave off more-liberal legislative proposals from politicians in Washington.
“This administration doesn’t like you, so come up with something proactively that makes it so you are not being taxed in the way [Sen.] Elizabeth Warren wants you to,” Cramer said, referring to the Massachusetts Democrat who, along with Sen. Bernie Sanders, I-Vt., has proposed a wealth tax for billionaires.
“But … I think they’re very tone deaf,” Cramer said on “Squawk on the Street.” “I think that billionaires just kind of feel like, ‘Well, listen, we’re oligarchs, and we get to do what we want.'”
Cramer said he believes that attitude is misguided, particularly under Democratic President Joe Biden, who has called for higher taxes on wealthy Americans but has not backed proposals to levy an annual tax on total wealth. Republicans slashed taxes on wealthy individuals and corporations during the administration of Biden’s predecessor, Donald Trump.
“I think we’re in an era where they don’t seem to realize that the pitchforks are coming. This administration is certainly not pro-capitalist, it’s pro-labor — much more, I think, than the Obama administration,” Cramer said. “A lot of the billionaires should be a little more on guard about what’s going to happen in Washington.”
“Elizabeth Warren is going to win this if the billionaires try to fight it too much,” he added.
In a letter accompanying the move, the billionaire Berkshire Hathaway CEO acknowledged philanthropy has recently become a “hot topic” and said he believes it is “fitting” that Congress occasionally look at how charitable donations are treated by the tax code, “particularly in respect to donors who get ‘imaginative.'”
The philanthropic pursuits of billionaires came into the spotlight again following a ProPublica report earlier in June that, using confidential IRS files obtained by the news organization, detailed the amount of income taxes paid in recent years by some of the world’s wealthiest people, including Buffett.
Cramer on Wednesday did not detail specific tax reforms he believes billionaires should be willing to embrace. However, he said he thinks lawmakers “have to examine” strategies in which ultra-wealthy people pledge their stock holdings as collateral to take out a personal loan “to be able to create income even though they’re not selling the stock.”
That kind of approach was discussed in the ProPublica story. The “Mad Money” host earlier this month said some of the information in the story made him “sick,” and he suggested the U.S. impose a surtax on billionaires as one potential way to combat widening inequality in the country.
“Maybe you think it’s too blunt. But I’ve had it,” Cramer said on June 11, just days after the ProPublica bombshell. “We can’t let this go on anymore in a democracy.”