The Massachusetts senator responded to Howard Schultz in a tweet Tuesday morning, after the former Starbucks CEO called her wealth tax proposal “ridiculous.”
“What’s ‘ridiculous’ is billionaires who think they can buy the presidency to keep the system rigged for themselves while opportunity slips away for everyone else,” Warren wrote.
What's “ridiculous” is billionaires who think they can buy the presidency to keep the system rigged for themselves while opportunity slips away for everyone else. The top 0.1%, who'd pay my #UltraMillionaireTax, own about the same wealth as 90% of America. It's time for change. https://t.co/D04G5fNvpa
— Elizabeth Warren (@ewarren) January 29, 2019
Schultz — who announced this week that he is seriously considering running for president as a “centrist independent” — took issue with Warren’s wealth tax proposal in an interview that aired Tuesday morning on NPR’s “Morning Edition.”
“What we have today is an unfair system,” he told NPR host Steve Inskeep. “However, when I see Elizabeth Warren come out with a ridiculous plan of taxing wealthy people a surtax of 2 percent because it makes a good headline, or sends out a tweet, when she knows for a fact that is not something that’s ever going to be passed. This is what’s wrong. You can’t just attack these things in a punitive way by punishing people.”
Warren’s wealth tax plan, which she unveiled last week, would impose a 2 percent annual tax on the capital assets, such as stocks and real estate, of households worth more than $50 million, as opposed to solely taxing income. In a recent letter to supporters, the Bay State senator argued that the current state of wealth inequality in the United States — in which the top 1 percent of households own more wealth than the bottom 90 percent combined — calls for “structural change” to the country’s tax policy.
“Right now, an heir with $500 million in yachts and fine art and a public school teacher with no savings can pay the same amount in federal taxes,” Warren wrote.
“The reason? Because people pay federal taxes on their income, not on their wealth,” she continued. “So if that heir and that teacher both make $50,000 in a year, the federal government sees no difference between them. This isn’t an oversight, it’s on purpose. It’s because the rich and powerful run Washington, and they make sure the rules are written to benefit themselves.”
Warren’s plan would also impose an additional 1 percent surtax on the assets of households worth more than $1 billion. According to Washington Post reporter Jeff Stein, her wealth tax plan would result in Schultz — with an estimated net worth of $3.4 billion — paying an additional $91 million in taxes each year.
Schultz could also renounce his citizenship and move to another country, in which case under @ewarren's plan he'd face a 40% "exit tax" and have to hand over $1.36 billion in taxes upon leaving
— Jeff Stein (@JStein_WaPo) January 29, 2019
Schultz says he hasn’t made a final decision about whether to officially join the 2020 field. Asked if he would self-fund his campaign, the multi-billionaire told CBS’s “60 Minutes” that “we’ll be fully resourced to do what’s necessary.”
A self-described “lifelong Democrat,” Schultz now decries what he sees as “extremes on both sides” and says he’s concerned about the impact that proposals embraced by Warren and other progressives, like Medicare for All and tuition-less college, would have on the national debt.
“How are we paying for all this and not bankrupting the country?” Schultz said in a recent interview with The New York Times.
Warren, for her part, has made no secret that she believes the answer is raising taxes on the wealthy.
While Schultz told Inskeep that he thinks the country needs “comprehensive tax reform,” he wouldn’t specifically say if that included raising taxes on its wealthiest members. Schultz did tell “60 Minutes” that he thought the recent Republican tax bill went too far in cutting corporate taxes and indicated he would have provided more tax cuts to the individuals at the bottom rungs of the income ladder.
Former Starbucks CEO Howard Schultz says he’s strongly considering running for president in 2020. Where does the billionaire Independent stand on key issues facing our country? https://t.co/b6zijMBLs7 pic.twitter.com/0O2jh56AB2
— 60 Minutes (@60Minutes) January 28, 2019
One financial matter on which Schultz and Warren do appear to agree is that companies should not solely prioritize the maximization of shareholder returns. As the CEO of Starbucks, Schultz made sure that employees had benefits, like health insurance, tuition aid, and stock shares.
“What I would try to do is influence public CEOs to understand that we have a moral obligation and responsibility not only to make a profit and create shareholder value, but also to do everything we can to do more for our employees and the communities we serve,” Schultz told Inskeep.
Warren introduced a bill last summer that would make companies worth more than $1 billion obtain a newly created federal corporate charter overhauling corporate governance. Among other things, the charter would give employees at least 40 percent representation on corporate boards and require that executives consider the interests all company stakeholders: employees, customers, shareholders, and the communities in which they operate.
Schultz, however, says he wouldn’t change any laws when it comes to corporate governance — nor has he outlined any specific policy proposals, beyond espousing his purported values of humanity and fairness.
“Financial performance in a way is the price of admission,” Schultz told Inskeep. “A company has to perform, but you don’t have to perform at the expense of your people.”