'So many aren’t paying their fair share of taxes': Patriotic Millionaires Chair

Morris Pearl, Patriotic Millionaires Chair, joined Yahoo Finance to discuss economic policy priorities for the incoming Biden administration.

Video Transcript

ADAM SHAPIRO: We're looking at record close, potentially, on the S&P 500, the Dow and the NASDAQ, as well as the Russell 2000. I mention that because while the times have been very good for a select few in our country, they've been very bad for several people in the middle and at the lower end of the economic spectrum.

That's why we're inviting in Morris Pearl. He is the chair of Patriotic Millionaires. He's also a former managing director of BlackRock. He has been an outspoken advocate about addressing income inequality. And we appreciate your being with us, Morris.

We just heard, by the way, that President-elect Biden says he will support a $2,000 direct payment to Americans who've been impacted negatively because of the pandemic. But as that might seem a helpful bridge, that doesn't solve the really endemic problems that we face, does it?

MORRIS PEARL: Yeah, we've got a problem with a very few people, as you were just saying, doing really, really well. The stock market's hitting record highs. But there are millions of people, just a few hundred yards from here, who are unemployed, and they don't know how they're going to make their rent checks next month or pay their iPhone bills or do all the other things that help investors make money. So that's what we have to address in this country, the fact that our consumers, who generate most of the economic strength of our nation, many of them don't have any money to consume anything.

- Well, Morris, going off of that, I guess a two-part question here. So, one, what do you think needs to be done in order to better address this? And then, two, going back to what you were just talking about, this $2,000 potentially in direct payments to Americans, how significantly do you see this potentially helping the economy at this point?

MORRIS PEARL: Well, we're talking about hundreds of billions of dollars. And yes, that will be a help. It'll make a big difference. Because all of that money, the part that goes to regular working people, they're going to spend that money the very first week after they get it. And, yeah, It's not going to be a long-term issue into the next month, but that's going to help a lot of people. Not only those people, but it's going to help their landlords. It's going to help the people that own stores where they shop. It's going to help a lot of people.

And it's going to be part of what's going to address the gross inequality that people are complaining about in our country. I think a lot of things that the President-elect is proposing doing is simply addressing how the rich are getting richer and richer and richer through tax loopholes and things like that, while the rest of us simply are not making any progress at all. And we have to do something about that. We have to do something about the fact that so many people aren't paying their fair share of taxes, and yet so many other people are not getting anything out of this huge economic expansion.

In the stock market, we've seen the best months ever in history, many of us, and yet so many people are unemployed.

ADAM SHAPIRO: How do you address-- this in a two-part question. First, for instance, New York City. Those people who leave a place like New York City for a no-income-tax state like Florida to take advantage of that. And that leads into the second part of the question, what do you say to those people? But also, the real tax code that we have to address isn't necessarily the state-by-state, but it's the federal tax code. And you proved-- you're in favor of an, you call it the Amazon tax, but it's a 50% tax on corporate income above $100 million. Is that accurate?

MORRIS PEARL: Well, sure. One of the things the president-elect is saying is we have to have an alternative minimum tax for corporations. Some tax or corporations that, through crazy bookkeeping and pretend all of their income is overseas, have to pay some tax on the money that's actually earned in America. Companies like Amazon have done nothing about that, and so they have-- to they're going to be charged some tax under the president-elect's proposal.

He's going to elect-- he's going to address the real estate developers who transfer their real estate wealth to generation and depreciate the same real estate over and over and over again, without ever paying any tax on increase in value through things like step-up basis and 1031 exchange. So a lot of things the president-elect is trying to do, and will try to do, and move forward to address some of these gross inequalities.

And yet, people-- yes, someone is moving from Trump Tower to Mar-a-Lago, but the vast majority of people are moving into New York state because they still know that New York is the place where people build businesses. People are not moving out of New York because people know that New York is the kind of place they want to move into. And New York, because it has enough money to provide for its citizens and have things like hospitals and universities and schools and all the things where people want to live, that's why people are moving into New York.

- Hey, Morris, real quick, because we only have about 30 seconds left here. But when we talk about addressing income inequality, I have to ask you about minimum wage. We're entering a new year. 23 states, I believe, are expected to raise their minimum wages next year. What should the minimum wage be in order to better address this income inequality that you are talking about?

MORRIS PEARL: We're supporting the $15 an hour minimum wage over a period of a couple of years. And we believe that, really, people can't live on much less than $15 an hour, and that should be the minimum wage.

Now, that's still less than an inflation adjusted what it would have been since the late 1960s, so we have to address that.

ADAM SHAPIRO: Morris Pearl is chair of the Patriotic Millionaires. Thank you for joining us here on "Yahoo Finance Live." All the best to you in the coming new year.