Sen. Elizabeth Warren wants one of her biggest critics to face lawmakers in a hearing next week, but that encounter will have to wait.
Warren, a progressive Democrat from Massachusetts, invited billionaire investor Leon Cooperman to testify before a Senate Finance subcommittee hearing on taxes.
Cooperman, in a response given to CNBC, declined the invitation, calling it “self-serving and disingenuous.”
“As I have stated many times before (including in my Open Letter to Senator Warren), I believe in a progressive income tax.,” Cooperman wrote. “Personally, I am happy to work six months of the year ‘for the government’ and six months for myself. But many who live in high-tax cities and states already pay even more than the 50 percent combined effective rate that that implies, and at some point, higher effective rates (federal, state, and local combined) become confiscatory, which should never be the ethos of this country.”
Warren, in a letter to Cooperman first obtained by CNBC, called on the financier to attend a hearing being organized and led by the Finance Committee’s Fiscal Responsibility and Economic Growth subcommittee, which she chairs. The hearing, set for April 27, is titled Creating Opportunity Through a Fairer Tax System.
Warren told Cooperman in the letter she is interested in giving the longtime Wall Street executive “an opportunity to discuss my Ultra-Millionaire Tax Act, which would level the economic playing field and narrow the racial wealth gap by asking the wealthiest 100,000 households in America, or the top 0.05%, to pay their fair share.” The letter was sent to Cooperman on Monday.
A rivalry between Warren and Cooperman exploded during the Democrat’s campaign for president. After she proposed a wealth tax during the primary, Cooperman blasted her proposal in a letter to the lawmaker.
“However much it resonates with your base, your vilification of the rich is misguided, ignoring, among other things, the sources of their wealth and the substantial contributions to society which they already, unprompted by you, make,” he said at the time.
A month later, Warren’s campaign ran a TV ad on CNBC taking aim at Cooperman and other business leaders. Her campaign also sold a mug that read “BILLIONAIRE TEARS” in response to a CNBC interview during which Cooperman cried.
Cooperman has since done numerous interviews ripping Warren’s tax proposals, including a CNBC appearance in March in which he advised viewers to buy gold if such a bill passes.
“If the wealth tax passes, go out and buy yourself some gold because people are going to rush to find ways of hiding their wealth,” Cooperman told CNBC at the time.
Cooperman expressed skepticism Tuesday about Warren’s invitation.
“I’m trying to determine whether she’s being objective or whether she’s just trying to promote her own agenda,” Cooperman told CNBC in a statement. “I’m a bit suspicious given how she never responded to the letter I sent her before.”
Cooperman, who will turn 78 two days before the hearing, is one of the most outspoken members of the investor community. He often speaks of his rags-to-riches story: growing up in the South Bronx as the child of working-class Polish immigrants, attending public schools, and starting his first Wall Street job – with Goldman Sachs – in debt and with zero net worth.
After more than two decades with Goldman, Cooperman founded the hedge fund Omega Advisors in 1991. He is now the CEO of the Omega Family Office. Last year, he signed the Giving Pledge, which is a commitment by rich people to donate a majority of their wealth to charity.
“That’s the American Dream,” he said. “I want to give others the opportunity to live the American Dream.”
Warren addresses Cooperman’s issues with her wealth tax idea in the letter sent Monday, encouraging him to discuss his concerns in front of her committee and those watching from home.
“But as we move expeditiously toward consideration of changes to our rigged tax code so that the wealthy pay their fair share, I believe you should be afforded the chance to present your perspective directly to Congress,” she writes to Cooperman. “The opportunity will allow you to fully air your views, not merely in front of the financial news audience where you often express them, but before the entirety of the American people.”
Warren and other Democratic lawmakers have pitched a 3% total annual tax on wealth exceeding $1 billion.
They have also called for a lesser, 2% annual wealth tax on the net worth of households and trusts ranging from $50 million to $1 billion.
Cooperman’s net worth is at $2.5 billion, according to Forbes.
Here is Cooperman’s full letter declining Warren’s invite:
As you know, I have been invited by Elizabeth Warren to testify at a hearing next Tuesday, to be conducted by the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth (which she chairs), entitled “Creating Opportunity Through a Fairer Tax System.” The ostensible purpose of her invitation is to give me an opportunity to express my views about her latest “fair share” legislative proposals – specifically, her Ultra-Millionaire Tax Act. Since the Senator saw fit to publicize my invitation in the media, I will do the same with this declination.
As I have just informed her office, I will not appear at Senator Warren’s hearing, for several reasons:
- My views on this topic have been widely disseminated and are, at this point, well-known. In addition to an extensive Open Letter that I wrote to Senator Warren in October 2019 which was covered in both print and broadcast media at the time, I had earlier written an Op-Ed piece for the Financial Times of London that was subsequently picked up and republished in other print and online media. I have expressed the same views on multiple occasions on television. I do not see the point of reiterating in detail what I have already said so many times before. I attach a copy of my 2019 Open Letter to Senator Warren for any of those who care to refresh their memory concerning where I stand on this issue. I am confident that Senator Warren herself needs no such refreshing.
- I find Senator Warren’s invitation self-serving and disingenuous. As has been the case since we first locked horns on this matter during her failed presidential bid, she is looking to grandstand at my expense and to use this hearing as a platform to advance her own agenda. Had she responded to my Open Letter directly at the time and accepted my invitation to engage in a substantive conversation about how to bridge our philosophical divide, I might feel differently now. Instead, she preferred to fire off snarky tweets and peddle “Billionaire Tears” mugs on her website to help finance her sputtering campaign, treating me with utter disdain. This Senate hearing will, I believe, be of a piece with that dismissive treatment, conducted in a showboating atmosphere not conducive to serious debate. I am not interested in being pilloried by her while she uses me as a foil to promote her far-left manifesto.
- As I have stated many times before (including in my Open Letter to Senator Warren), I believe in a progressive income tax. Personally, I am happy to work six months of the year “for the government” and six months for myself. But many who live in high-tax cities and states already pay even more than the 50 percent combined effective rate that that implies, and at some point, higher effective rates (federal, state, and local combined) become confiscatory, which should never be the ethos of this country. I also believe that there are more constructive approaches to advancing a progressive legislative agenda than an explicit wealth tax whose efficacy has been widely debunked in the real world. Congress could start by eliminating various loopholes in our tax code that allow so much seepage through the cracks, including the exemption of capital gains from taxation upon death, the carried-interest exemption for private-equity and hedge funds, and the capital-gains tax-deferral preference accorded like-kind exchanges under Section 1031 of the Internal Revenue Code. Our legislators could then move on to enacting some form of the Buffett Rule (repeatedly rejected by Congress since it was first proposed in 2012), which would implement a surtax on taxpayers making over $1 million a year to better ensure that the highest earners pay their fair share. But none of these play to the crowd as well as Senator Warren’s soak-the-rich campaign – another reason I don’t expect to receive a fair hearing were I to appear at her show trial.
- Most importantly, Congress should start examining in earnest how to fund progressive programs through revenue-neutral proposals that would cull bureaucratic waste rather than add further to administrative bloat – again, essential but boring, so not something of interest to most progressive politicians like Senator Warren.
In all of this, I am reminded of the words of the noted economist Thomas Sowell:
“High tax rates in the upper income brackets allow politicians to win votes with class warfare rhetoric, painting their opponents as defenders of the rich. Meanwhile, the same politicians can win donations from the rich by creating loopholes that can keep the rich from actually paying those higher taxes – or perhaps any taxes at all. What is worse than class warfare is phony class warfare. Slippery talk about ‘fairness’ is at the heart of this fraud by politicians seeking to squander more of the nation’s resources.”
These, then, are my reasons for respectfully declining Senator Warren’s invitation. I will, however, be sure to tune in for the show.