(Bloomberg) — Former U.S. Treasury Secretary Steven Mnuchin said he was opposed to the introduction of new taxes and warned about the potential knock-on effects of a proposed levy on the super-wealthy that’s being touted by Joe Biden’s Democrats.
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On Wednesday, Senate Democrats released their plans for a so-called billionaires’ tax they hope will help fund social spending aimed at low and middle-income Americans. The result of weeks of negotiations, the bill proposes taxing those who for three consecutive years have had assets worth at least $1 billion or have earned at least $100 million three years in a row.
“I’m generally in favor of simplifying the tax system and making sure the appropriate taxes are collected,” Mnuchin said on the sidelines of Saudi Arabia’s flagship investment conference in Riyadh. “But when you talk about targeting one segment of the population in a very specific way, I worry about the unintended consequences.”
Mnuchin, a wealthy Republican who ran the Treasury Department under former President Donald Trump, said the levy probably wouldn’t rake in as much cash as its proponents expect.
“My guess is a lot of these fortunes will be transferred to foundations and charities,” he said. “I guess you’ll accelerate that process, so you probably won’t collect as much revenue, but we’ll see. So no, I don’t support any tax increases.”
Mnuchin’s concerns echo those of other wealthy speakers at the Future Investment Initiative in Riyadh. On Tuesday, U.S. billionaires Ray Dalio and Larry Fink said they’re open to paying more tax — but only if the money was put to better use.
In a separate interview with Bloomberg Television, Mnuchin said inflation remains a big concern. He said U.S. inflation is probably at 4% to 5%, though he thinks it will stabilize at 3.5%.
“That’s still a significant issue,” he said. “Given the enormous amount of fiscal and monetary support, I am very concerned that we are going to see higher interest rates and the impact on consumers.”
Mnuchin, 58, a banker, private equity investor and movie producer before being tapped as Treasury secretary, recently returned to investing. His Liberty Strategic Capital has raised about $2.5 billion for private equity investments, with most of the money coming from sovereign wealth funds in the Middle East, including Saudi Arabia’s Public Investment Fund, people with knowledge of the matter have said.
Mnuchin declined to comment on the source of his firm’s funding in Wednesday’s interview.
(Updates with inflation comments starting in seventh paragraph.)
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