Key Words: The wealthy face ‘one clear implication’ from the coronavirus, says man who led 2008 crisis restructuring efforts
‘There is one clear implication: The era of tax cuts is over. People who have been fortunate enough to be able to make significant incomes are going to have to make a greater contribution.’
That’s Jim Millstein, co-chairman of Guggenheim Securities, explaining in a Bloomberg TV interview on Monday why it is “inevitable” that the rich will be hit with higher taxes to pay for the debt pile that continues to mount during the coronavirus pandemic.
Millstein, credited for his work in leading the restructuring efforts at the U.S. Treasury after the financial crisis, explained that the Federal Reserve’s unprecedented support for the credit markets has helped investors during the lockdown in a way that will ultimately have to be paid back by those who have benefited most from President Trump’s tax cuts.
On Monday, the Treasury Department said it expects to borrow a record $3 trillion in the second quarter to pay for the coronavirus relief measures passed by Congress. Looking ahead to the third quarter, Treasury said it expects to borrow $677 billion.
“If we’re really creating a backstop against credit losses,” he said, “then, you know, eventually, if this government is doing that much for that class, then that class is going to have to start paying for it.”
Watch Millstein’s full interview: