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President-elect Biden's tax plan will likely make companies leave the US: NYC billionaire businessman

Alexis Christoforous
·3 min read

President-elect Joe Biden has promised to raise taxes on America’s richest corporations “on day one” of his presidency.

Morris Pearl, a former managing director at BlackRock, writes that the Biden tax plan could be one of the most progressive the country has ever had that “maps out an equitable future for America.”

Billionaire businessman John Catsimatidis disagrees. As CEO of Red Apple Group, Catsimatidis owns the largest supermarket chain in New York City, in addition to owning and operating assets in the energy, real estate, finance and insurance industries.

“Giving the government more money to spend the government way — is pretty dumb. I don't think the government has been spending money the right way in the last few years, and I believe low taxes has attracted companies to come back to the United States,” Catsimatidis told Yahoo Finance Live. “[If they raise taxes] all they’re going to do is find a way to leave again.”

President Trump’s 2017 tax cuts reduced the corporate rate to its current 21% from 35%, one of the highest in the world. Biden wants to raise the rate to 28%, which is still lower than it’s been anytime between World War II and Trump’s tax cuts. Biden also supports a so-called “Amazon Rule,” which involves a 15% minimum tax rate on net annual income for corporations making over $100 million a year. It’s a way to prevent companies including Netflix, Starbucks and the rules’ namesake from dodging their tax bill because of loopholes and special tax breaks.

On individuals, Biden proposes raising the income tax rate on people who earn over $400,000 a year from 37% to just under 40%, as well as raising the capital gains tax rate for the nation’s highest earners.

The top 5% would bring in most of the tax revenue. (Graphic: David Foster/Yahoo Finance)
The top 5% would bring in most of the tax revenue. (Graphic: David Foster/Yahoo Finance)

Catsimatidis said the problem with American politics is that, unlike CEOs of corporations, politicians don’t know how to effectively cut costs and only know how to “raise, raise, raise” taxes.

A vocal Trump supporter and campaign donor, Catsimatidis said Trump should not concede the presidency to Biden until all votes are counted.

“The electoral college doesn't meet until the middle of December,” said Catsimatidis. “Let's go through the process. Let the Justice Department do their job. Let the FBI do their job. Let the lawsuits, the Supreme Court do their job. And whoever is elected president of the United States on December 14, I will salute him as Mr. President.”

Catsimatidis has his own political aspirations. He ran for mayor of New York City as a Republican in 2013 and lost the party nomination to former Metropolitan Transportation Authority head Joe Lhota.

Republican candidates for mayor of New York Joe Lhota, left, and John Catsimatidis participate in a debate, Sunday, Sept. 8, 2013 in New York. The primary is Tuesday, Sept. 10 and the general election is Nov. 5. (AP Photo/Wall Street Journal, Andrew Hinderaker, Pool)
Republican candidates for mayor of New York Joe Lhota, left, and John Catsimatidis participate in a debate, Sunday, Sept. 8, 2013 in New York. (AP Photo/Wall Street Journal, Andrew Hinderaker, Pool)

“I am very concerned about New York City. I've talked to Cushman and Wakefield. A lot of big companies, if they have 10,000 employees in Manhattan or in New York City, they're looking to cut it in half. So I think New York could have a permanent problem because of this. A common sense mayor will be able to fix it,” he said.

Catsimatidis said his supporters are urging him to run for New York City mayor in 2021, in what’s already shaping up to be a crowded race to succeed Mayor Bill de Blasio.

“I haven't made up my mind. You know, I'm enjoying my life. And I'm enjoying my children. I'm enjoying showing my children how to run our companies,” Catsimatidis said. “See me in January.”

Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.

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