NEW YORK (Reuters) - Bill Gross, manager of the world's largest bond fund, urged fellow members of the "privileged 1 percent," earning the highest incomes, to support higher U.S. taxes on carried interest and capital gains to help the economy.
Gross, co-founder and co-chief investment officer of Pacific Investment Management Co., said in his latest investment outlook letter on Thursday that the super wealthy "should be paddling right alongside and willing to support higher taxes on carried interest, and certainly capital gains readjusted to existing marginal income tax rates."
The gains are taxed at a top rate of 20 percent instead of the nearly 40 percent top rate on ordinary income paid by the highest earners.
Easy credit policies have also allowed the rich to make billions of dollars, Gross said.
Gross, who oversees roughly $2 trillion in assets, noted that billionaires Warren Buffett and Stanley Druckenmiller, founder of Duquesne Capital Management and one of the best performing hedge fund managers of the past three decades, have advocated similar proposals.
"The era of taxing 'capital' at lower rates than 'labor' should now end," Gross said.
Gross, who acknowledged he was among the 1 percent, noted he is writing investment letters that "'dis' the success that provided me the soapbox in the first place." He said that increasing taxes could improve the U.S. competitive position compared with Germany and Canada.
"Instead of approaching the tax reform argument from the standpoint of what an enormous percentage of the overall income taxes the top 1 percent pay, consider how much of the national income you've been privileged to make," Gross added.Gross said, "Long-term growth for each company, and for all countries, depends not on balance sheet alchemy and financial wizardry, but investment and the ultimate demand for a company's
or a country's products."
In a post to Pimco's Twitter account on October 24, Gross criticized billionaire Carl Icahn's effort to have Apple commence a $150 billion share buyback, saying, "Icahn should leave #Apple alone & spend more time like Bill Gates. If #Icahn's so smart, use it to help people not yourself."
Sentiment: Strong Buy
I make more money than you might make in your entire life moron. I'm included in the 1% in this country but unlike you! I do understand my interest is tired to a vibrant middle class and by extension,vibrant economy and so is every body's interest in this country. The reason I and the reach have to pay more taxes is because we park 80% of this country's wealth. If the 90% of this country's citizens don't have a livable wages or income, who is going to consume goods and services...where profits of every company and wealth in general are generated. I'm sure you can't connect the dots but you know how to shout nonsense.
Sentiment: Strong Buy
The biggest threat this country faces is income inequality.Our country,our economy,our future...no threat is bigger than income inequality.We are becoming a banana Republic with super rich and super poor..the middle class which has been a bedrock of our economy is fastly disappearing like the glaciers and so is this country's long term economic and political power.We have under invested in education,infrastructure,R&D for more than a decade.Just compare the U.S infrastructure to Japan,South Korea and our biggest competitor China...We are consumed by meaningless debate and we are talking past each other rather than engaged in an intelligent debate.Our competitors are catching up with us in every metric if not already passing us.Ask yourself why the richest people;Buffet and Gross are speaking the truth while groups like the T-party are engaged in the destruction of the government social service programs such as SSI and medicare that keeps them from being homelessness and sure death.
I was surprised to learn from a new research that came out last week that showed 80% of T-partiers receive social security and medicare.This research also warned the Republican party that though this group advocates against government overreach,they will not allow these programs to be cut or reduced.This research also raised a question: why are democrats refusing to reform programs where the largest beneficaries of these programs don't vote democrats.This is the contradiction I have been talking about.
Sentiment: Strong Buy
I agree 100% with you. A few years back when 250-300 Factories were transferred to other countries, that is what took the Middle class down. In Southern Illinois their Factory was closed down after being in operation for 80 Years. Today when you pass Carbondale SIU driving north, the next 3 exits Signs that usually show Restarants sp.....Gas stations etc.... are Blank now. Make sure you have plenty of gas before going thru there or you'll be on the side of the road flagging some one down... Nothing is there. The bad part is this isn't the only place like that. Farther north, good luck driving thru the streets as many cars are broken down where there are no parking place, causing tight spaces to get thru. No money causes Ghost Towns. It's very sad to see. As many of you know this is not an exaggeration.