Billionaire Michael Dell, CEO of the eponymous technology giant, rejected a suggestion by Rep. Alexandria Ocasio-Cortez of a 70 percent marginal tax rate on the wealthiest Americans.
“No, I’m not supportive of that,” Dell said at a Davos panel on making digital globalization inclusive. “And I don’t think it will help the growth of the U.S. economy. Name a country where that’s worked.”
She may not be in Davos, but the congresswoman’s influence is being felt on the slopes of the Swiss Alps. Three weeks after Ocasio-Cortez, D-N.Y., floated the idea in an interview on “60 Minutes” to raise the top marginal tax rate on Americans’ income of more than $10 million to 70 percent, it was a hot topic at the gathering of the global financial and political elite.
Dell has expanded his wealth by $12 billion over the past half decade, Bloomberg reported this month, reshaping his company from a maker of inexpensive PCs into a diversified tech powerhouse that sells products from servers to security software. Dell, who’s now worth $26.5 billion, according to the Bloomberg Billionaires Index, pulled his namesake technology empire from public markets in 2013, engineered a large acquisition and returned it to the stock market in December. The shares have gained 5.8 percent since.
“My wife and I set up a foundation about 20 years ago, and we would’ve contributed quite a bit more than a 70 percent tax rate on my annual income,” Dell said. “I feel much more comfortable with our ability as a private foundation to allocate those funds than I do giving them to the government.”
Erik Brynjolfsson, a professor at MIT who was on the panel with Dell, said such a rate worked in the U.S. after World War II. But other executives were opposed.
“It would be disastrous for the economy,” Ken Moelis, CEO of investment bank Moelis & Co., said in an earlier Bloomberg Television interview from the site. “You have to incentivize people. Even in the U.S., what’s going to happen to the two-workforce family? You forget where 70 percent starts to kick in.”
Billionaire investor Ray Dalio suggested that the idea may have legs in the run-up to the U.S. presidential election. Discussing the outlook for a slowing world economy Tuesday, Dalio said that next year will see “the beginning of thinking about politics and how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger role.” He didn’t mention Ocasio-Cortez by name.
The top marginal tax rate is 37 percent, for incomes of more than $510,300 for individuals and $612,350 for married couples, according to the Tax Foundation.
The fortunes of a dozen attendees at the World Economic Forum in 2009 have soared by a combined $175 billion, a Bloomberg analysis found. Meanwhile, a report from Oxfam on Monday revealed that the poorest half of the world saw its wealth fall by 11 percent last year.
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