In a new interview, venture capitalist Alan Patricof called on lawmakers to address income inequality but said he opposes the “Robin Hood mentality” behind tax proposals put forth by New York Congresswoman Alexandria Ocasio-Cortez and Massachusetts Senator Elizabeth Warren.
“Taxing the rich to give to the poor, a Robin Hood mentality, may not be exactly the right way,” says Patricof, a major Democratic donor.
Ocasio-Cortez proposed a marginal tax rate of 70% on income over $10 million; while Warren, a 2020 presidential candidate, put forward a 2% wealth tax on households that exceed $50 million.
Asked directly about the tax proposals, Patricof says, “You don’t need that.”
Patricof made the comments to Editor-in-Chief Andy Serwer in a conversation that aired on Yahoo Finance in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
In 1967, Patricof was an early investor in New York Magazine. He followed in the 1980s and ‘90s with larger investments in Apple and AOL, before either company was a household name. Meanwhile, he founded global private equity firm Apax Partners, which to date has raised over $50 billion in funds.
Patricof returned to venture capital in 2006 when he founded Greycroft, which has specialized in digital media companies with stakes in companies such as Huffington Post and Venmo. He donated thousands to support Hillary Clinton’s presidential candidacy in 2016 and Democratic Congressional candidates in 2018.
‘A fair tax system’
He listed income inequality among the top issues Democrats need to address, alongside health care and infrastructure.
“We just can't have people buying $200 million co-ops, and other people not being able to pay their rent,” Patricof says.
He called for “a fair tax system,” suggesting lawmakers close the carried interest loophole, a move that would prevent stakeholders in an investment fund from receiving advantageous tax rates on income generated by their investments.
Patricof has long backed the carried interest proposal, one he made in a New York Times op-ed in 2016, “even though it hurts my pocketbook,” he says. “There are a lot of people who have a conscience who are concerned.”
He lamented a divide in the Democratic party between centrists and the progressives.
“It's a shame that there's been a bifurcation,” he says. “I found myself the other day in an interview saying I'm not a socialist, I'm a capitalist.”
“We’re all getting put into boxes,” he adds.
Ocasio-Cortez’s tax proposal is supported by 45% of voters, while 32% of voters oppose it, according to a Morning Consult poll that surveyed 1,993 voters last month. Warren’s proposal outperformed the Ocasio-Cortez proposal in the same poll. Sixty-one percent of voters favored the Warren proposal, including 50% of Republicans.
Andy Serwer is editor-in-chief of Yahoo Finance.