Politicians like Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez have ambitious plans designed to reduce wealth inequality, though they largely involve levying higher taxes on high-income households. Billionaire Mark Cuban has also chimed in on the matter, presenting a simple solution that could limit wealth gaps and allow lower income individuals to “improve their wealth.”
“The only way that people really improve their wealth is by buying a house, condo, whatever it may be, owning shares of stock,” said Cuban, according to a report by Yahoo. “I think that’s where you start to change the rules.”
Cuban also noted the importance of tax advantages for home purchases for lower income households.
“If somebody is below a certain level of income and they’re able to buy a home, and you give them more tax advantage, you don’t take away their deductions because they’re in California or New York when they have a lower income,” he stated.
“Now, they did some things to offset. But, still, you want people to be able to accumulate assets that grow in value, that appreciate. That’s how you get people so that their life becomes better.”
Cuban also believes that the trickle-down approach is ineffective, noting that working “from the bottom up” would yield better results. He even discussed an example. When Cuban and his business partner, Todd Wagner, decided to sell their video portal in 1999, many employees had stock in that company as well.
“We created 300 millionaires because 300 out of 330 people invested their stock,” said Cuban. “So, when you work from the bottom up like that, people have a chance to increase the value of their wealth.”
Cuban stated that people who have an advantage class of stock – when they decide to sell it – “it should be treated as normal income.”
“If everybody’s got the same class of stock, then you treat it as capital gains if you’ve held it for more than a year,” he stated. “I think you also advantage people if you have a company where all employees are offered stock. You give them other tax advantages.”
“Because then, AOC’s point, you’re lifting from the bottom up,” he added. “Trickle-down is not going to work. But if you create opportunities where people all have to share in stock, then the disparity is going to decline, because everybody’s going to go up when things happen.”
Both Warren and Ocasio-Cortez have discussed ideas involving increasing taxes for wealthier Americans. Cuban noted that he isn’t a fan of the trickle-down taxation approach.
“The concept that just tax, those who have a whole lot more, then all of a sudden it’ll find its way to those who need it — doesn’t work, hasn’t worked, won’t work,” said Cuban. “It’s not that taking more money — I’m ok with paying more taxes. I don’t have a problem with that. Where the issue is: How do you make it work?”