While 2020 Democratic hopefuls work feverishly to come up with a solution for growing wealth inequality, Dallas Mavericks owner, billionaire investor and potential presidential candidate at some point Mark Cuban has a relatively simple solution.
“The only way that people really improve their wealth is by buying a house, condo, whatever it may be, owning shares of stock,” Cuban said. “I think that’s where you start to change the rules.
“If somebody is below a certain level of income and they’re able to buy a home and you give them more tax advantages, you don’t take away their deductions because they’re in California or New York when they have a lower income. Now, they did some things to offset. But still, you want people to be able to accumulate assets that grow in value, that appreciate. That’s how you get people so that their life becomes better.”
Cuban made the remarks on “Influencers with Andy Serwer,” a weekly show hosted by Yahoo Finance’s editor in chief.
The “Shark Tank” star then referred to his business dealings at Broadcast.com, where he and his partner, Todd Wagner, sold the video portal to Yahoo in 1999 while their employees already had stock.
“We created 300 millionaires, because 300 out of 330 people invested their stock,” he said. “So when you work from the bottom up like that, people have a chance to increase the value of their wealth.”
When someone has the advantage class of stock, “it should be treated as normal income,” Cuban said.
“If everybody’s got the same class of stock, then you treat is as capital gains if you’ve held it for more than a year,” he said. “I think you also advantage people if you have a company where all employees are offered stock. You give them other tax advantages.
“Because then, (Rep. Alexandria Ocasio-Cortez’s) point, you’re lifting from the bottom up. Trickle-down is not going to work. But if you create opportunities where people all have to share in stock, then the disparity is going to decline, because everybody’s going to go up when things happen.”
When it comes to “wealth tax” ideas like Sen. Elizabeth Warren’s 2% to 3% annual tax on assets above $50 million and $1 billion, respectively, and Ocasio-Cortez’s 70% flat tax on income above $10 million a year, Cuban said he’s not a fan of either trickle-down economics or trickle-down taxation.
“The concept that, ‘Just tax those who have a whole lot more, then all of a sudden it’ll find its way to those who need it,’ it doesn’t work, hasn’t worked, won’t work,” Cuban said. “It’s not that taking more money — I’m OK with paying more taxes. I don’t have a problem with that. Where the issue is: How do you make it work?”