'The era of tax cuts is over': The wealthy US 'investor class' will have to pick up the tab for coronavirus stimulus, Guggenheim co-chair says

• The "investor class" that reaped the benefits of President Donald Trump's 2017 tax cut will likely pay for much of the government's coronavirus stimulus, Jim Millstein, co-chairman at Guggenheim Securities, said Monday.
• The national deficit is expected to quadruple to $3.8 trillion in 2020, according to a federal watchdog agency. Wealthy Americans face "inevitable" tax hikes to cover much of the debt, Millstein said in an interview with Bloomberg TV.
• "The era of tax cuts is over," he noted, adding that the Fed's backstopping of risk assets should be paid for by those who profited from it.
• Visit the Business Insider homepage for more stories.

Those who benefited from President Donald Trump's 2017 tax cut will be the first in line for higher dues to pay for the government's skyrocketing debt, Jim Millstein, co-chairman at Guggenheim Securities, said Monday.

The government and Federal Reserve are spending trillions of dollars to pad the economy from a pandemic-induced collapse. The Committee for a Responsible Federal Budget expects the national deficit to balloon to $3.8 trillion from $984 billion in 2020, reaching a similar debt-to-GDP ratio as that seen in World War II.

While some spending cuts could shore up government cash, Americans with "significant incomes are going to have to make a greater contribution," Millstein said in an interview with Bloomberg TV.

"There is one clear implication: The era of tax cuts is over," he said. "There are going to be corporate and personal income tax increases on the other side of this just to bring that budget somewhat closer to balanced."

Read more: A stock chief at $6.5 trillion BlackRock outlines 5 major themes the pandemic is poised to shape — and why investors should take note of each

Millstein isn't a stranger to what comes after a recession and hefty relief spending. The co-chair led the Treasury Department's restructuring practices after the financial crisis, and Guggenheim is already working with travel firms slammed by the coronavirus' toll.

It's "inevitable" that wealthier Americans will foot much of the bill, as the Federal Reserve's policy has already aided much of the assets they dabble in, Millstein said. The central bank's expansion into corporate bond purchases directly aided the credit market and indirectly lifted stocks through April.

"That kind of support for the investor class is something that the investor class is ultimately going to have to pay for," Millstein said. "If we're really creating a backstop against credit losses then, you know, eventually, if this government is doing that much for that class, then that class is going to have to start paying for it."

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