Billionaires at New York Galas Can't Agree on Trump's Tax Plan

(Bloomberg) -- Robert Rubin, who was once a U.S. Treasury secretary and co-head of Goldman Sachs, referred questions on the Republican tax overhaul to another guest at the UJA-Federation of New York’s Wall Street Dinner.

"Ask John," Rubin said Monday evening, looking through his round black spectacles at hedge fund manager John Paulson. They were taking their seats next to each other on the dais in front of 2,000 people in a ballroom of the New York Hilton Midtown. 

Paulson, who served as an economic adviser to Donald Trump’s presidential campaign, had already opined during cocktail hour. Almost a year into Trump’s presidency, he talked of a "tidal wave" of benefit that will come from lowering the corporate tax rate. 

"It’s much more realistic than trickle down, it’s a tidal wave," he said in a brief interview. "The U.S. has a very uncompetitive corporate tax" rate, he’d noted. "We want these companies to be here, it creates jobs."

Across the street at the Dubin Breast Cancer benefit in the Ziegfeld Ballroom, Michael Novogratz didn’t sound as amenable on a day when the Treasury Department put out a one-page report that tried to defend the economic impact of the plan.

"Steve Mnuchin never even modeled the thing -- idiot, I-D-I-O-T," said Novogratz. "Gary Cohn shouldn’t be able to live with himself."

Novogratz, who along with Mnuchin and Cohn is a former Goldman Sachs executive, supports tax reform -- "smarter tax reform," he said. "This is slapped together." Cutting the corporate tax rate doesn’t make sense to him when "the stock market is on a high and the economy is growing."

Some high-earners in New York worry they could take a hit if the final tax overhaul eliminates the deduction for state and local taxes, even if they benefit in other ways from the plan.

"There are a lot of New Yorkers who voted for him because they wanted the tax cut" who could now face a higher bill, Novogratz said. "I’m like, serves you right."

At the UJA gala honoring Howard Lutnick and Lee Fixel, one guest, Bruce Richards, who runs distressed-debt investor Marathon Asset Management, said he and his wife are talking about moving because of tax changes. "The truth is, most of us have homes in Florida, in Miami or in Palm Beach," he said. "I don’t spend that much time in New York anyway, I have offices in London, Singapore."

Then he gestured at Michael Minikes, the vice chairman of prime brokerage at JPMorgan Chase & Co.

"I am in Palm Beach," Minikes said. "I don’t make tax arrangements, I make visiting Florida arrangements. But that’s easy to change."

House and Senate Republicans are working this week on tax-overhaul legislation in an effort to send a bill to Trump by the end of the year. The issue of charitable deductions came up at the galas, which is not a surprise considering the events raised $29 million for UJA and $3.4 million at Dubin.

Peter Kiernan, another former Goldman Sachs partner, was adamant that new tax rules shouldn’t discourage donations.

"It’s bad for the fiber of the country," he said, sitting next to billionaire Paul Tudor Jones at the breast cancer benefit. "Leave charity alone, do everything you can to help the charitable impulse."

Others were less interested in politics than socializing with Wall Street colleagues. “This for me is a not-miss event,” Carol Einiger, who used to be chief investment officer of the Rockefeller University endowment, said about the UJA gala. “I get to see 2,000 of my closest friends.”

--With assistance from Hema Parmar

To contact the reporters on this story: Amanda Gordon in New York at agordon01@bloomberg.net, Max Abelson in New York at mabelson@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Peter Eichenbaum

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