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Evercore CEO Sees Higher Taxes on Wealthy to Close Equality Gap

Bloomberg logoBloomberg 6/18/2020 Sonali Basak
a man wearing a suit and tie: Ralph Schlosstein © Bloomberg Ralph Schlosstein

(Bloomberg) -- Evercore Inc. Chief Executive Officer Ralph Schlosstein said wealthy people in America should expect to pay higher taxes to close the income gap getting exacerbated by the Covid-19 pandemic.

“Those of us who have been incredibly fortunate in this country should individually be prepared to foot more of the bill,” he said Thursday in a Bloomberg Television interview.

The investment bank chief is among marquee Wall Street names signaling an end to falling tax rates and the start of a trend in which the wealthy and companies taking on a greater burden. Corporate taxes may need to be bumped up to as high as about 28%, Schlosstein said, similar to a view BlackRock Inc.’s Larry Fink privately shared with clients of a wealth advisory firm.

Jim Millstein, co-chairman of Guggenheim Securities, declared last month that the “era of tax cuts is over” as a result of investors gaining disproportionately amid central bank efforts to support market liquidity. Stocks have been recovering, even as this week marked the 13th straight stretch of U.S. jobless claims surpassing 1 million. Hedge fund titan Ray Dalio and former Goldman Sachs Group Inc. chief Lloyd Blankfein also have said the government must find ways to bolster tax revenue as it tries to counter the economic impact of the pandemic.

Read more: Wall Street Titans See Tax Hikes Whether They Like Them or Not

Schlosstein said he expects President Donald Trump and presumptive Democratic nominee for president Joe Biden to present diverging views of taxation in the final months of their campaigns, especially on rates for high-income earners and capital gains, which Schlosstein said have been widening the gap between the affluent and non-wealthy. Former Evercore Vice Chairman Charles Myers has said the Biden camp could consider a wide range of taxation that includes levies on carried interest, which would particularly affect private equity managers.

The long period of economic growth before the pandemic helped many people broadly but was “clearly benefiting those who are in the upper strata in the country financially,” Schlosstein said. “That gap has continued to widen.”

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