Barry Sternlicht, co-founder of the privately held Starwood Capital global investment firm, believes a wealth tax, as envisioned by Democratic presidential candidates Sens. Elizabeth Warren and Bernie Sanders, would not be feasible.
“I think it’s a crazy idea,” Sternlicht said Friday on CNBC’s “Squawk Box.”
The wealth tax from Sanders, a Vermont democratic socialist, would be progressive, starting at 1% for household net worth of more than $32 million and ending at 8% on wealth over $10 billion. The plan from Warren, of Massachusetts, calls for a 2% tax on household net worth of more than $50 million and a 3% tax on net worth over $1 billion.
Sternlicht, chairman and CEO of Starwood Capital, also reacted to a radical proposal from two University of California, Berkeley economics professors on how to account for the wealth of people who derive large sums of their net worth from private companies.
UC Berkeley’s Emmanuel Saez and Gabriel Zucman, who helped design Warren’s tax plan, proposed that the Internal Revenue Service calculate values for private companies that can be figured into the complete wealth picture of taxpayers.
Questioning how the IRS would be able to value his business, Sternlicht said, “It’s impossible to do — multiples, changes in interest rates. It’s almost an impossible thing to do.”
Sternlicht started Starwood Capital in 1991. It currently has more than $60 billion in assets in global real estate and hotel management, as well as the oil and gas sectors and energy infrastructure. Starwood Capital created the Starwood Hotels chain, which is now part of Marriott International.
If the Saez-Gabriel Zucman plan were to become a reality, Sternlicht said, “You’re going to empower a lot of accountants. They’re going to be the biggest, fastest-growing industry in the world.”…………..Read more>>