Reading almost like an Occupy Wall Street manifesto, bond billionaire Bill Gross’ current investment outlook rails against the privilege of the 1% while demanding economic justice for the 99% through increased taxation of the rich.
Writing in his November monthly investment outlook, “Scrooge McDucks,” Gross, whose net worth Forbes estimates at $2.2 billion, counsels his fellow 1-percenters to enjoy their cigars and Chateau Lafite wine but recognize their privilege as males coming of age during a credit boom.
“You did not, as President Obama averred, ‘build that,’ you did not create that wave. You rode it. And now it’s time to kick out and share some of your good fortune by paying higher taxes or reforming them to favor economic growth and labor, as opposed to corporate profits and individual gazillions,” Gross writes.
Lamenting the decreasing percentage of income he pays in taxes “thanks to Presidents Reagan and Bush 43,” the manager of the world’s largest bond fund notes a shift in his thinking from that of one who made his wealth through capital to feelings of guilt over the plight of the 99%.
“Having gotten rich at the expense of labor, the guilt sets in and I begin to feel sorry for the less well-off, writing very public Investment Outlooks that ‘dis’ the success that provided me the soapbox in the first place,” he writes.
Gross challenges those who point to the disproportionate share of tax revenues that stem from the wealthy, arguing that his capitalist-class fellows should rather consider the share of national wealth they make. That share, he says, has risen from 10% in the 1970s to 20% today.
Gross argues for “an equitable rebalancing of personal income taxes, capital gains and carried interest,” seeing no reason that capital should be taxed at lower rates than labor.
The bond fund manager sees dangerous and portentous trends in the marketplace, wherein companies deliver outstanding profits while consistently showing tepid revenue growth. These S&P 500 companies achieve their profits by cutting expenses and buying back stock instead of reinvesting profits in new plant and equipment, Gross says.
The PIMCO manager then noticed the similarity between the behavior of corporations and that of the U.S. economy.