Wall Street heavyweights set the record straight on the proposed 70% super-rich tax they say is wildly misunderstood

• One of the hottest topics at the World Economic Forum in Davos, Switzerland has been Alexandria Ocasio-Cortez's proposed 70% marginal tax rate on all income above $10 million.
• There have been many headlines out of Davos with business leaders calling the proposed tax disastrous, scary, and saying it will have a huge impact on the economy. We sat down with three financial heavyweights to find out what they think everyone is missing about this discussion.
• The general consensus was that while such a hefty tax would hurt the economy, it simply doesn't effect enough people to be a major issue.
• Moelis & Co. founder and CEO Ken Moelis says there isn't a problem with a high tax on income above $10 million dollars because there isn't that much income to tax above that level. Marginal tax rates need to start around $250,000 in order to have an impact. And a 70% tax rate at that level "would crush the economy."
• Guggenheim Partners global CIO Scott Minerd agrees that the amount brought in by a 70% tax above the $10 million income level won't make enough of a difference even if you assume people will pay it. But Minerd says historically when we have had high marginal tax rates wealthy people have sheltered their income.
• Bob Prince, the co-CIO of Bridgewater - the largest hedge fund in the world - says this tax won't be good because it won't solve many problems.

Following is a transcript of the video.

Sara Silverstein: Everybody's talking about AOC's proposed 70% marginal tax rate. What are you thinking of the economic implications of that?

Ken Moelis: Look, it's ultimately going to get fought. The marginal rate has to go, to start at $250, $300, $350 thousand - whatever the sloganeering is - in order to get any money out of the US population. The marginal rate always ends up being debated right around $250, $300 thousand. So look, if you impose a 70% tax rate on that type of wage earner, you're going to crush the economy,

Silverstein: But at $10 million?

Moelis: There's no money there. Maybe we should have 99% at $10 million. I don't know. There's no policy there. It's slow. So it's going to be decided at the $250,000 to $350,000 range. That'll be the only decision will be where in that band you put extremely high marginal rates because that's where the money is. And we might as well talk about that early.

Silverstein: There's been a lot of debate about Alexandria Ocasio-Cortez's proposed 70% tax on all income above $10 million. What are the economic implications of something like that?Scott Minerd: Well, you know, we've lived in these high tax regimes before. Go back to the 1930s, even the 1960s, we had very high marginal tax rates. When we cut tax rates in the 1980s we had a huge productivity boom. And the reason for that is that people who were wealthy spent a lot of time sheltering their income and they drove investment into marginally less productive assets than they would if they just had free flexibility to put the money where they wanted to.So, you know, the frightening thing about high marginal tax rates is that it leads us into a low productivity economy. And we have a lot of headwinds already in this country. For instance, the growth in the working age population is declining dramatically. If you layer on top of that high marginal tax rates, you could actually build an economy that has zero growth potential. And so I think policymakers have to be very careful when looking at putting high marginal tax rates on the rich.And when you look at the revenue attached to it, if the Washington Post is right, even let's assume that nobody makes a portfolio adjustment and they pay their marginal taxes. It's about $70 billion a year in an economy that's running a trillion dollar deficit. I think we should probably have lower hanging fruit to find ways to address the real issues that are being brought up by some people in Washington like AOC or Bernie Sanders. There are real real issues to be addressed, but I think that we need to get more private sector incentive to address the issues rather than to necessarily weigh the private sector down with high taxation.

Henry Blodget: Bob, there's suddenly a lot of talk about a 70% marginal tax rate on incomes of $10 million or more in the United States. A couple of very smart people here have called that a disaster and scary. Is that something we should actually be worried about?
Bob Prince: Well, I don't think it would be good, but mostly I don't think it would solve any problems. The reason that that's emerging as a topic is because of populism, income inequality. And the populism and income inequality are really rooted in much deeper issues that, that tax rate, a 70% tax rate is not going to address.You really need to have jobs and incomes in the parts of the country that had been gutted by one force or another. And so largely that the forces of populism, are much more powerful. They're not going to be really addressed by that kind of a shift in taxes.I think the one thing that it would do is it would help with the deficit.