Gundlach: 'Wealth taxes ladled on top of our current tax system basically punishes success'
Billionaire bond investor Jeffrey Gundlach, the founder and CEO of $135 billion DoubleLine Capital, views a wealth tax as "primarily vengeance."
"I think, the wealth tax is primarily vengeance, really. I don't think it raises very much money … I am in the camp that wealth taxes ladled on top of our current tax system basically punishes success," Gundlach told Yahoo Finance in a wide-ranging interview this week.
To be sure, the 61-year-old bond investor does favor a wealth tax in place of an income tax.
"[I] would love to have a wealth tax, but only a wealth tax. I think wealth tax makes more sense than income tax. The income tax system is so convoluted that it's almost nonsensical, and it's completely unfair," he added.
Gundlach pointed out that when Mitt Romney ran for president in 2012, the Republican candidate's tax return showed he paid a 14% rate relative to his income.
"I made about as much money as he did in that year, and I was paying 50%. So, I don't like the idea that the income tax system is completely unfair, even at equal income levels because of tax shelters and carried interest and all these things that are just, you know, crony capitalism, essentially through the tax code," he said.
"But to put a wealth tax on top of the income tax, that's really problematic," he said.
Elsewhere, the Biden administration wants to hike the capital gains tax, which would affect the top 0.3% of Americans. The plan would increase taxes on capital gains to 39.6% from 23.8% for people making more than $1 million.
Gundlach said if implemented, that capital gains tax would have a dramatic effect. "That'd be sort of a shock to the financial system, sort of like the pandemic was to the healthcare system. And if you put capital gains tax together with a wealth tax, then you've really got a problem," he said.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.