Morgan Stanley CFO Ruth Porat: Raise Taxes On The Rich

The movement to raise taxes on the wealthiest Americans has gained an ally at the top of one of the United States' largest banks. Ruth Porat, executive vice president and chief financial officer at Morgan Stanley, said on Saturday at the Economist's World in 2012 summit that the government needs to raise taxes on the rich to address its budget deficit.

"The wealthiest can afford to pay more in taxes. That's a part of the deal. That makes sense. I don't know anyone that doesn't agree with that," Porat said. "The wealth disparity between the lowest and the highest continues to expand, and that's inappropriate."

"We cannot cut our way to greatness," she added.

President Obama has said he would like to raise taxes on millionaires, but many Republicans oppose such a tax. Most millionaires, on the other hand, say that they would like to pay more in taxes.

Porat said that the global markets are more stressed now than they have been since the financial crisis in 2008. She said bank debt is now less trusted than other corporate debt, borrowing costs for European countries such as Italy have reached record highs, and banks have become less confident lending to one another. Since banks around the world now are focused on paying down their debt, they are less likely to lend to businesses and consumers, she said.

Porat said she expects global economic confidence to hit bottom next year and that the eurozone ultimately will avert a breakup by becoming more fiscally integrated.

"The optimistic scenario is low growth, and we only have that if in fact we see this conscientious move toward greater fiscal integration," she said.

Porat said that there is potential for an economic recovery in the U.S. to gain momentum next year, once companies become confident enough in the economic climate to make more investments.

"Where there's any sort of sense that we're turning the corner, you'll see a lot of cash coming in," she said. "There is this cash on the sidelines waiting to be put to work."

But Porat said that with the extreme level of political polarization in Congress, "right now there doesn't seem to be a path forward," suggesting more "slow growth" in the future.

Comments

[anonymous67]

02:17 PM on 12/07/2011

Anyone voting Republican in 2012 is dumber than a fence post.

[loki]

01:41 PM on 12/07/2011

love how they support things they know have little chance of ever happening. Not if their lobbyist do their jobs. Even if it does come to be, they know all the loopholes and shelters that they will pay to have written in will all but wipe out any taxes owed.

If these super rich sociopaths really wanted to change the way things are, they would just start paying employees a decent wage. From the janitor to the CEO are all entitled to a decent pay for a decent days work. If they dont work, find someone else to do the work, and that goes for the CEO too.

[seaedward]

07:37 AM on 12/07/2011

No body wishes to pay more taxes. But it is time the president simply states an over haul in the tax structure and gets on with it!

[FormerlyTCnSRQ]

10:37 PM on 12/06/2011

people need to decide...ridiculous social issues that get in their way or politicians that have a plan to get us out of this mess with sound, and fair policy decisions hat will be unpopular but necessary to get us moving....vote (D)...the Republicans just can't do it for country anymore.

[j319s]

01:42 PM on 12/06/2011

The decision makers in corporate America are looking out for themselves and their smalll group of cronies while leaving all their other employees to suffer. Why can't the companies divide up their profits sharing fairer then giving a pompous CEO hundreds of millions of dollars. The country would be much better off if the income was distributed differently

[loki]

01:44 PM on 12/07/2011

Oh, but they would call that socialism. you cant share the wealth with the pleab workers. The workers are only the people who make the company prosper and run. The CEO's are the ones who think they do all the work themselves.

[kburgoyne]

12:10 PM on 12/06/2011

Congratulations OWS and all the other groups that has worked so hard to bring the message of rampant income inequality to the general population. While OWS has been the most "out front" group, it should be acknowledged that other groups have been working through political and other communications channels as well. OWS is to be given credit for finally getting the corporate media to give-in and start paying attention FOR REAL.

We're starting to see concrete examples of what happens when you lift up the carpet and shine a spotlight on the roaches hiding underneath. Even Frank Luntz, the premier GOP spinster, recently told a meeting of the Republicans Governors Association (RGA) they should stop using the word "capitalism" in their propaganda because the word has become so tainted. When the premier GOP spinster tells the group of greed worshippers to stop saying "capitalism", it's a clear sign of times changing.

Capitalism is actually a good thing so long as it is kept on a very tight leash. I'm a small businessman who appreciates the benefits of capitalism. However the problem with capitalism right now is it has become Godzilla trampling upon society and buying up our democracy. In a free and fair nation, democracy must reign over capitalism. Not visa-versa.

[j319s]

01:44 PM on 12/06/2011

well said

[loki]

01:49 PM on 12/07/2011

"Capitalism is actually a good thing so long as it is kept on a very tight leash."

been saying this for years.. glad to see more people saying the same now. Regulate heavily and enforce without prejudice to keep the thoughts of corruption just thoughts and not realities like they are nowadays. And regulating doesn't mean that you have to charge money, just means you think about breaking the laws, your arse is going to get burnt.

Most of todays big time capitalist always talk about not wanting gov involvement, but its the big capitalist themselves who use the Gov more than ever to squash the competition and increase their own profits. If the big capitalist had to face true capitalism without their highly paid strong armed political puppets, they would never make it is my guess.

[vermoce]

07:18 AM on 12/08/2011

Yes the big corporations do use government to their benefit. Thats why we need less government. The regulations & the tax code help the big businesses. We need the small business to do better. Thats how we get a strong middle class.

[mfitz11]

10:12 AM on 12/06/2011

So now we even have the rich saying that taxes need to be raised for them, yet the Republicans still do not hear what the ENTIRE country is saying.
During the boom years of this country 1946 - late 1970s, taxes on the rich were up to 65-70%, yet the entire country was flourishing more than at any other time in our history.
Why?
Because the rich were still getting rich because the rest of the population actually had spending power, and the middle class was growing because they had low taxes and good salaries, which gave them spending power.

It's not rocket science here folks, our decline began in the late 1970s and continued with Regan and everyone after who kept in line with the "trickle down effect". Now that we look back, a third grader can see that this "trickle down effect" did not work for this country.

[j319s]

01:49 PM on 12/06/2011

The decline also tracks with the war against unions which is now reaching the end with public sector employees being falsely attacked. The middle class owes a per cent of their earnings to labor unions that raised the wages of the working man. Now the ownership is pushing down the earnings of the middle class as the unions die. It is in the best interest of our country that the employees get a fair deal not be used by the employers. My employer would rather fnd his unborn great grand child than give us an increase.

[mfitz11]

04:35 PM on 12/06/2011

That is absolutely right.
There is a direct correlation between the decline of unions in America and the decline of the middle class.
Here is the issue - exec or CEO X gets paid a huge salary and a massive bonus based on profits. So, in order to increase profits, CEO X cuts staff, cuts benefits and keeps wages stagnant for the remaining employees.
Profits go up as a result and CEO X takes home $15 million in bonus money.

I'd have to think that CEO X would have a very difficult time doing something like this if he had a union or some kind of organized workforce to answer to.

[mgrant33301]

10:01 AM on 12/06/2011

newt, mitt, michelle, are you listening?

[hobo62]

10:27 AM on 12/06/2011

Have they ever? They seem to hear only the voices of God. And by their statements, God must be awfully confused.

[GeoNorth]

08:05 AM on 12/06/2011

The right complains that the rich pay 40% of all income taxes. Why not? They own 90% of everything!

[kburgoyne]

12:31 PM on 12/06/2011

:-) Sounds like they still need to pay another 50%!!!! :-)

[loki]

01:54 PM on 12/07/2011

the rich are taxed at a higher rate than the poor, this is true. But the rich have 1000s of more loopholes and shelters available to them, as well as tax accountants, lawyers, and paid politicians making sure they pay nothing. Or , like in the case of some corporations, say, like GE. you can pay nothing, and get millions in a refund check as well. So why would they care if they were taxed at 99.9% when you can pay nothing and maybe even get millions in a refund. Thats a great deal for the parasitic sociopaths of the ruling class

[Steve Rockett]

01:37 AM on 12/06/2011

The republicans in Congress have backed themselves into a corner and the average American hates them and their support of the rich. They have caused the recession, the destruction of families, the inane court decisions granting citizenship to corporations, the hatred of clean air and water, and the unemployment rate. Pretty soon, the neo-cons will disavow themselves of the tea party and the Koch Brothers, Fox, Limbaugh, Hannity, Beck, and Murdoch and others of their ilk. They will throw them under the bus, but we Americans have a very clear concept of the enemies of the middle class in Congress. "We the people" is everyone in this country, not just the rich, bloated pigs at the top and their lapdogs in Congress. Obama will sweep in a landslide, Americans will throw republicans out of office, and we will lose the balance of moderates in the republican party, because there are no moderates anymore. When millionaires start begging to be taxed more, you can bet they feel very, very threatened and isolated. The slope is slippery and we are on it.

[msbeal]

12:33 AM on 12/06/2011

Tax the heck out of the rich, reign in that ridiculous military budget and what ever problem we have left we'll talk clipping social programs.

Cut the BS and let's get this country back on it's feet!!!

[BCAB]

09:48 PM on 12/05/2011

The rich might as well start paying taxes, the poor have no money and there is no middle class left.

[falconsso]

09:25 PM on 12/05/2011

Millionaires to Congress: Tax Us More. Yeah, right. Should'nt be too much money out of Soros pockets, to have them say that.

[rcwhite364]

11:17 PM on 12/05/2011

You really have nothing constructive to add to the discussion.

[mgrant33301]

10:03 AM on 12/06/2011

falconsso, dumb comment.

[falconsso]

09:23 PM on 12/05/2011

You can get much farther with a kind word and a scare tactic, than you can with a kind word alone.

[falconsso]

09:18 PM on 12/05/2011

This is like buying something at 7-11, while it is way cheaper at WalMart. Tax me more, I spend double less.