CNBC’s Jim Cramer on Friday suggested the U.S. impose a surtax on billionaires following this week’s ProPublica report on how some of the richest people on the planet are avoiding taxes.
In recent years, billionaires including Amazon CEO Jeff Bezos, Tesla CEO Elon Musk, and businessman Michael Bloomberg, investors Carl Icahn and George Soros paid little to no federal income taxes, according to the report from ProPublica, which cited confidential IRS data it obtained.
“They obviously are able to avoid paying income tax. Not evade. But avoid. And I know avoid is legal and the government says you can do everything you can to avoid. I think that has to be changed,” the “Mad Money” host said on “Squawk Box,” citing the wealth inequalities that divide the nation.
“There’s not billions of billionaires. Let’s come up with something for this small group,” added Cramer, who spoke in generalities about a billionaire surtax. However, he did describe an approach that differed from Democratic Massachusetts Sen. Elizabeth Warren’s wealth tax proposal. “Does Elizabeth Warren talk about it in a way that I think is a little bit too severe. Yes,” he said.
Warren’s plan, released earlier this year, is called the “Ultra-Millionaire Tax.” It would impose a 2% annual tax on household net worth between $50 million and $1 billion and a 3% annual tax on household net worth above $1 billion.
Following this week’s ProPublica report, Democratic Maryland Sen. Chris Van Hollen and Democratic Virginia Rep. Don Beyer reintroduced their “Millionaires Surtax” legislation, more akin to what Cramer put forward, except the bill would tax a much wider swath of rich Americans.
The Van Hollen-Beyer bill “would apply an additional 10-percentage point tax to incomes above $2 million for married couples or above $1 million for individuals,” according to a summary of the measure, released Thursday.
Cramer also talked about a billionaire surtax in a series of tweets Friday, saying “these revelations make me sick,” referring to the tax avoidance strategies employed by the uber-wealthy in the ProPublica report.
The ProPublica article, expected to be the first in a series, did not reveal how the journalists obtained the tax records. The outlet did not respond to a request from CNBC for comment. CNBC has not independently verified the information in the report.
Later on CNBC’s “Squawk on the Street,” Cramer said: “We’re not asking for Elizabeth Warren to take. We don’t want to necessarily confiscate. But we have to find a way to say listen, ‘We know you use avoidance and we don’t know how to beat it. But we’re going to put a surtax on it.'”
“Maybe you think it’s too blunt. But I’ve had it,” he said, expressing concern about the ever-widening wealth gap in America. “We can’t let this go on any more in a democracy.”
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