Some billionaires vent over tax plan
Elon Musk isn’t happy.
With a personal fortune that is flirting with $300 billion, the Tesla CEO — the richest person on earth — has been attacking a Democratic proposal to tax the assets of billionaires like him.
The idea behind the Democratic plan is to use revenue from a billionaires tax to help pay for a domestic policy package being negotiated in Congress that would, among other things, help combat climate change, provide universal prekindergarten and expand health care programs. The proposal wasn’t included in President Joe Biden’s framework for the domestic policy package released Thursday, though that deal among Congressional Democrats isn’t final.
Musk, who recently blew past Amazon founder Jeff Bezos as the world No. 1 in wealth thanks to Tesla’s soaring share price, would be liable for perhaps a one-time $50 billion tax hit under the Democratic proposal.
Forget it, he says.
“My plan,” the SpaceX founder tweeted Thursday about his fortune, “is to use the money to get humanity to Mars and preserve the light of consciousness.”
He may well get his wish, with the proposal removed from the White House framework.
Earlier this week, Musk argued, the fundamental problem is that government spends too much money — and he warned that the billionaire tax proposal could lead over time to tax hikes for more Americans.
“Eventually,” he tweeted Monday, “they run out of other people’s money, and then they come for you.”
The Democratic proposal, unveiled Wednesday by Sen. Ron Wyden, would tax the gains of people with either $1 billion or more in assets, or three consecutive years of income of $100 million or more, at the capital gains tax rate of 20% and the 3.8% net investment income tax rate. It would apply to fewer than an estimated 800 people, who would have to pay tax on the value of tradable items, like stocks, even if they don’t sell them. Under current law, such assets are subject to tax only when they’re sold.
Supporters have said the tax could raise $200 billion over 10 years that could help fund Biden’s legislative priorities. Republicans are unified in opposition to the proposal. And some have suggested it would be challenged in court.
The Democrats’ proposal came against the backdrop of growing concerns about vast economic inequality, with the wealth of many American multi-billionaires having accelerated during the COVID-19 pandemic, thanks to increased stock and home equity, even more than before the virus struck.
Bob Lord, a tax lawyer and associate fellow at the progressive think tank Institute for Policy Studies, said that even if this particular proposal doesn’t pass, it does reflect how concerns about financial inequality are gathering momentum.
ProPublica reported in June that some of the richest Americans have paid no income tax, or nearly none, in some years — including Musk, who, the report said, paid zero income taxes in 2018. Critics argue that Musk’s criticism of the billionaire tax proposal overlooks the fact that Tesla’s rise has been aided by government incentives and loans.
