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Gary Cohn: Wealth Tax 'Harmful' to Economy

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By    |   Tuesday, 05 February 2019 05:15 PM

Former Goldman Sachs president Gary Cohn warns that hiking taxes on rich Americans would hurt the U.S. economy.

“The U.S. tax code is very, very complicated,” Cohn recently explained to CNBC.

“It would be harmful to the economy,” said Cohn, who served 14 months as President Donald Trump’s chief economic advisor.

“I’m not saying that collecting more tax revenue is harmful to the economy,” Cohn said. “I’m saying we have to compete in a global theater,” he said. “I spent over a year with almost every waking hour in the tax code.”

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He then suggested that raising personal taxes could make businesses that operate as pass-through entities disadvantaged versus corporations.

“The vast majority of people work for pass-through entities, which is really part of the personal income tax code; it’s a hybrid,” Cohn said. “We’ve got to make a level playing field for everyone in the system.”

Senator Elizabeth Warren has proposed an annual 2 percent tax on households worth more than $50 million. Freshman Democratic Representative Alexandria Ocasio-Cortez of New York floated a 70 percent top tax rate on incomes of $10 million or more, an idea that 59 percent of people supported in a Hill–HarrisX poll conducted Jan. 12-13, Bloomberg reported.

Independent Senator Bernie Sanders is proposing to expand the estate tax on wealthy Americans, including a rate of as much as 77 percent on the value of estates above $1 billion. Sanders, who ran in the Democratic primary against Hillary Clinton in 2016, hasn’t yet said whether he’ll run in 2020.

Polls show that voters are becoming more receptive to the idea of increasing taxes on the wealthy.

However, the concept of higher taxes on the wealthy hasn't been universally rejected.

JPMorgan Chase Chief Executive Officer Jamie Dimon, who leads one of Wall Street’s biggest banks, recently said that the ultra-rich could afford to pay more taxes as a wider political debate rages over increasing taxes for the wealthy.

“I believe that individuals earning the most can afford to pay more, and I have no problem paying higher taxes to address some of the fundamental challenges and inequities in our society,” Dimon said in a statement emailed by JPMorgan, in response to questions posed by reporters, Reuters reported.

“However, we need to ensure that our tax dollars are going where they can be most effective - like expanding the earned income tax credit and other programs that support the people and communities who really need it,” Dimon added.

Dimon’s remarks come as senior Democrats prepare to write a fiscal blueprint this year that would cut annual budget deficits and possibly include tax hikes on corporations and the wealthy.

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Material from Bloomberg and Reuters has been used in this report.

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Former Goldman Sachs president Gary Cohn warns that hiking taxes on rich Americans would hurt the U.S. economy.
gary cohn, wealth, tax, harmful, economy
Tuesday, 05 February 2019 05:15 PM
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