Very interesting investment outlook, that had a political town we do not often hear from you.
Explain, what is a scrooge mcduck?
A scrooge mcduck is a person unwilling to recognize they have been advantaged by lower capital gains and the carried interest and other favorable tax policies at the expense of the labor.
It seems to me that when something is scarce, that is when they lower taxes on it in order to stimulate supply.
Capital has not been scarce for 15 years.
We have been creating gazillions of it.
You have to keep capital gains lower than the marginal tax rate -- to me, that is a fallacy in public policy.
Carried interest, for sure.
One argument on capital gains has been that people are taking on risk by investing.
You are putting yourself out there, risking your nest egg, so to speak, and you should be compensated for that risk in the form of an incentive such as a lower tax rate.
Are you saying capital gains should be taxed the same rate as income tax?
Should all be equal?
I certainly am.
I am suggesting that that would not necessarily, probably wouldn't lower the willingness of american business and individuals to invest in the economy.
You know, for the past 5, 10, 15 years we really haven't been investing.
But it hasn't been because tax rates have been too high.
It is because the marginal productivity and return on investment is low on a global basis.
It is not a function of two-high -- too-high taxes, it is a function of a lack of opportunity.
I am suggesting, let's equalize this.
Let's make labor your ability to earn a living wage, or even higher in terms of an annual income, let's make that equal in terms of its tax rate relative to the tax on capital.
Warren buffett has suggested the same.
This is not a left field type of idea by any means.
It goes beyond that.
You are also talking about what we are seeing happening in corporate america, where there are so many occupied backs or act -- stock buybacks or acquisitions.
With -- but you are saying we are not seeing enough investment in capital and people.
It is a little different from your prior guest, bill miller of walmart, i suppose.
It does suggest that america needs an incentive to invest, and that incentive can be either from infrastructure to improve our third-rate airports, our third-rate streets to my our third-rate water supply, etc.
Or a can be -- it can be through a private-public, nation that provides an appropriate return for private interest but at the same time promotes productivity, which is decidedly lacking today in the u.s. economy.
If we were to do that, wouldn't that effectively be an extension of what we are already doing, where we are effectively cap it -- taxing capital at a lower rate than labor?
You would certainly be giving an advantage in this particular program.
But obviously, the capital would be directed at a program infrastructure, streets, water, roads, airports, that to most people's thinking would promote and improve lifestyle.
Capital gains these days basically goes to those that invest in a stock, they watch the stock go up by 10% or 20%. capital gains gives them more money.
It does not build the economy, because corporations are not investing the retained earnings in the economy itself.
This would be a directed program.
It would favor capital to some extent.
What about the wealth effect?
If the stock market is going up, a certain portion of the population is going to feel better, those that are investing in it.
And they may be more willing to go out and spend, thereby helping the overall economy.
I don't think so.
Thank you for the question.
Obviously it has to be asked.
But gazillionaires do not go out and spent more of their capital gains on new fancy things.
This entry try to make more gazillions in the capital markets.
What this economy needs is investment in the real economy, not in the capital markets.
What we have seen with the fed with this program of quantitative easing, the fed, the government investing in the capital markets.
What the government needs to do is not investing capital markets but invest in the real economy.
That is the same thing with the private side as well.
It sounds like you are really taking aim more at corporations than that individuals.
That's where you think the power is.
Is that a fair way to view this?
Let's not nail corporations to significantly.
Corporations are liable to their investors.
That is their primary focus.
To the extent they can increase their stock price, their earnings-per-share by buying back shock -- stock, who was going to change that?
The only way to change that is basically to begin to increase these marginal tax rates on capital gains, on carried interest.
In terms of corporate tax reform, to make a more equitable type of distribution the between corporate income and after-tax income.
I do not think it has been equitable for a long time.
Bill miller from walmart was talking about how the american consumer and american wage earner will never die.
Basically, they are.
Wages as a percentage of gdp have declined by 5%. profits have increased.
You have to have a consumer.
Before we let you go, let me ask you.
Carl icahn was on the show pushing for the $150 billion buyback of apple stock.
They haven't done it so far.
But we did see today they invested $11 billion in cap-ex.
How do you view apple right now and what carl icahn is trying to push?
I don't have an opinion on apple.
May be the $11 billion in capital spending.
The $11 billion in capital spending, if that is the number, certainly i would applaud that type of investment.
But you are putting a company on notice that since you bought 2% or 3% of outstanding shares, that they should do something in terms of dividend distribution.
Let's see something more specific in terms of capital investment.
If the $11 billion has gone in
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