Australia Markets closed

Here's how Bloomberg may be saving money by running for president

In announcing his official entrance into the presidential race, former New York mayor Michael Bloomberg unsurprisingly took aim at President Trump, calling him an “existential threat to our culture and our values.” 

Defeating Trump may be the goal, but beating Sen. Elizabeth Warren for the nomination would be good riddance to an adversary who is pushing for a wealth tax that would personally cost him more than a presidential election.

Warren made available to the public a calculator for billionaires — and others — to see how much they would pay under her tax. She estimates that Bloomberg would personally pay $3.163 billion in taxes next year under her plan, and has put that eye-popping sum on her website on a page dedicated to Bloomberg. Bloomberg has a reported net worth of $54 billion

For some context, campaign finance watchdog OpenSecrets, estimated that the entire 2016 presidential race, primaries included, cost $2.4 billion (money spent by campaigns and outside sources).  Even if Bloomberg spent as much as Clinton and Trump did in the 2016 race, a combined total of $887 million, he’d still be saving money on that wealth tax should Warren get the nomination and beat Trump. 

Democratic Presidential candidate, Michael Bloomberg during remarks to the media at the Hilton Hotel on his first campaign stop in Norfolk, Va. Monday, Nov. 25, 2019. (AP Photo/Bill Tiernan)

Bloomberg’s campaign may not want to frame his entrance into the race as the pursuit of a tax break, but the billionaire has already let the public know how he feels about paying billions more. “I think the Constitution lets you impose income taxes only, so it probably is unconstitutional,” he said back in February. Similar to other billionaires like JPMorgan Chase CEO Jamie Dimon and Leon Cooperman, Bloomberg views Warren’s wealth tax as a penalty for success. Of course, all the pushback against Warren is premature given that even winning the nomination — and the White House — in no way means she’d have an easy time getting Congress to pass a new wealth tax. Washington dysfunction is legendary and her biggest rival in getting legislation passed would likely be Senate Majority Leader Mitch McConnell.

Tom Steyer, a fellow billionaire and Democratic candidate who has been running longer than Bloomberg, called the former mayor out on the tax issue on Monday. “I’m challenging Michael Bloomberg to support a wealth tax — or drop out of the race,” said Steyer, adding: “The American people, and the Democratic Party, literally can’t afford to have a Democratic nominee who disregards this essential component of balancing the scales of inequality and unequal opportunity. The Democratic nominee must recognize that truth, and commit to leveling the playing field by taxing the wealthy to pay their fair share.”

Warren has accused Bloomberg of trying to just buy a seat in the Oval Office and buy America’s democracy. “Michael Bloomberg is making a bet about democracy in 2020. He doesn’t need people, he only needs bags and bags of money. I think Michael Bloomberg is wrong,” Warren said.

With a $35 million TV ad blitz to start, Bloomberg has already spent more than his rival top tier Democratic candidates managed to raise in the third quarter. Warren took in $24.6 million, Joe Biden $15.7 million, Bernie Sanders $25.3 million, Pete Buttigieg $19.1 million, and Kamala Harris $11.7 million. 

More from Sibile:

Why a Trump win would be worse for markets than a Warren win

With USMCA, Dems try to prove they can pass legislation during impeachment

Trump’s claims on income growth challenged by data, ‘wage trap’

How millennials differ from other generations in holiday shopping

Trump struggling to achieve economic growth White House projected