Key Takeaways
- • Schwarzman defends tax progressivity: The Blackstone CEO asserts that the U.S. tax system is "extremely progressive," with the top 10% paying 70% of total tax revenue and the top 1% paying 38-40%, while he personally pays a 47-48% tax rate.
- • Supports selective wage increases but rejects wealth taxation: Schwarzman expressed openness to raising the minimum wage to $15 and increasing teacher compensation, but rejected proposals for higher taxes on wealthy individuals, characterizing such ideas as part of a "politics of anger and free things."
- • Concerned about 2020 election polarization: During a Financial Times lunch interview at Claridge's (a Blackstone-owned London property), Schwarzman warned that the U.S. is "more polarised than ever" in his lifetime, with socialism losing its stigma within the Democratic Party ahead of the 2020 presidential election.
- • Casual dining commentary masks serious policy stance: The interview, conducted over a £36 lobster Caesar salad at an upscale hotel, underscored Schwarzman's position that wealth redistribution through progressive taxation is not a priority despite acknowledgment of wage and compensation pressures in other sectors.
Summary
Blackstone CEO Stephen Schwarzman met with Financial Times editor Lionel Barber in August 2019 at the Foyer & Reading Room at Claridge's hotel in London—a property owned by Schwarzman's firm—to discuss economic and political concerns facing both business leaders and the nation. Over lunch featuring a £36 lobster Caesar salad (which Schwarzman described as "pretty good") and a £48 Dover sole, the two discussed the specter of socialism and wealth taxation in the context of rising political polarization ahead of the 2020 U.S. presidential election.
Schwarzman's position on taxation reflects a nuanced stance that distinguishes between wage policy and direct wealth redistribution. When asked about higher taxes on the wealthy, he responded with visible skepticism, countering with statistics on the existing tax burden: "The tax system in the US is extremely progressive . . . it's a reverse pyramid. The top 10 per cent pays 70 per cent [of the tax take]. The top 1 per cent pays 38 to 40." He cited his own effective tax rate at approximately 47-48%, suggesting that the wealthy already bear a substantial portion of the federal tax burden.
Despite his opposition to increased taxation on high earners, Schwarzman expressed support for targeted wage increases in other sectors. He indicated openness to raising the federal minimum wage to $15 per hour and increasing teacher compensation, acknowledging pressure points in labor markets and public services that warrant attention. This selective approach—supporting wage increases while rejecting wealth taxation—reflects a broader business perspective that distinguishes between operational cost pressures and redistributive tax policy.
Schwarzman's broader concern centered on the political climate and electoral dynamics heading into 2020. He characterized the Democratic Party's shift in rhetoric around socialism as significant, stating that "socialism is no longer a dirty word in the Democratic party." He warned that the "politics of anger and free things is a powerful potential elector," while noting that polarization in the United States has reached unprecedented levels in his lifetime. His comments reflected concern that populist economic messaging, regardless of ideological framing, posed electoral risks that could influence policy outcomes.
Schwarzman's position on taxation reflects a nuanced stance that distinguishes between wage policy and direct wealth redistribution. When asked about higher taxes on the wealthy, he responded with visible skepticism, countering with statistics on the existing tax burden: "The tax system in the US is extremely progressive . . . it's a reverse pyramid. The top 10 per cent pays 70 per cent [of the tax take]. The top 1 per cent pays 38 to 40." He cited his own effective tax rate at approximately 47-48%, suggesting that the wealthy already bear a substantial portion of the federal tax burden.
Despite his opposition to increased taxation on high earners, Schwarzman expressed support for targeted wage increases in other sectors. He indicated openness to raising the federal minimum wage to $15 per hour and increasing teacher compensation, acknowledging pressure points in labor markets and public services that warrant attention. This selective approach—supporting wage increases while rejecting wealth taxation—reflects a broader business perspective that distinguishes between operational cost pressures and redistributive tax policy.
Schwarzman's broader concern centered on the political climate and electoral dynamics heading into 2020. He characterized the Democratic Party's shift in rhetoric around socialism as significant, stating that "socialism is no longer a dirty word in the Democratic party." He warned that the "politics of anger and free things is a powerful potential elector," while noting that polarization in the United States has reached unprecedented levels in his lifetime. His comments reflected concern that populist economic messaging, regardless of ideological framing, posed electoral risks that could influence policy outcomes.
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