Elon Musk is not happy.
With a personal fortune flirting with $ 300 billion, Tesla’s CEO – the richest person in the world – is tackling a Democratic proposal to tax the assets of billionaires like him.
The idea behind the Democratic plan is to use the revenue from a billionaire tax to help pay for a set of national policies being negotiated in Congress that would help, among other things, tackle climate change, provide universal preschool and expanding health care programs. The proposal was not included as part of President Joe Biden’s framework for the domestic policy package released on Thursday, although this deal between Congressional Democrats is not final.
Musk, who recently overtook Amazon founder Jeff Bezos as the world’s No.1 wealth thanks to soaring Tesla’s share price, may be liable for a one-time tax of $ 50 billion. dollars as part of the Democratic proposal.
Forget it, he said.
“My plan,” SpaceX founder tweeted Thursday of his fortune, “is to use the money to bring humanity to Mars and preserve the light of consciousness.”
He may well get his wish, with the proposal pulled from the White House framework.
Earlier this week, Musk explained, the fundamental problem is that the government is spending too much money – and he warned that the billionaire’s tax proposal could ultimately lead to tax increases for more Americans.
âFinally,â he tweeted on Monday, âthey don’t have any more money for the others, then they come and get you.â
The Democratic proposal, unveiled by Sen. Ron Wyden on Wednesday, would tax the earnings of people with assets of $ 1 billion or more, or three consecutive years of income of $ 100 million or more, at the earnings tax rate 20% capital and 3.8% net investment income tax rate. It would apply to less than about 800 people, who would have to pay tax on the value of tradable items, like inventory, even if they don’t sell them. Under current law, these assets are only taxable when sold.
Supporters have said the tax could raise $ 200 billion over 10 years, which could help fund Biden’s legislative priorities. Republicans are united against the proposal. And some have suggested it would be challenged in court.
The Democrats’ proposal came amid growing concerns over vast economic inequality, as the wealth of many US multi-billionaires accelerated during the COVID-19 pandemic, thanks to rising inventories and net worth of housing, even more than before the virus.
John Catsimatidis, the billionaire grocery chain and real estate mogul that owns Gristedes, condemned the proposal as something you would “expect from Putin”, referring to Russian President Vladimir Putin.
The billionaire’s tax plan, Catsimatidis told The Associated Press, is “a little bit crazy.”
âThe American people have reached the point where they are like, ‘Enough is enough,’ said Catsimatidis, who lost a nomination for the Republican nomination for mayor in New York in 2013.
âStop spending stupid money. They come up with budgets that are stupid budgets, and they want to hurt everyone. “
âDo we need infrastructure?â Added Catsimatidis. âOf course we need infrastructure. Do we need bridges to nowhere? No, we don’t need them.
âYou’re talking about the people who create jobs,â he said of billionaires. “We can get up and go somewhere else.”
Leon Cooperman, the outspoken billionaire investor who has long denounced Senator Elizabeth Warren’s own proposal for a wealth tax, added his voice to the exasperation coming from some of the wealthiest.
In an interview with The Daily Beast, Cooperman said of the tax: “I doubt it’s legal, and it’s stupid.”
âWhat made America great,â he said, âare the people who started with nothing like me, who made a lot of money and gave it back. A relentless attack on the rich n makes no sense.
Not all billionaires share such outrage. A spokesman for George Soros, the liberal investor and philanthropist, told the PA that Soros “supports the billionaire tax proposal.”
And while Warren Buffett has yet to comment publicly on the proposal, Berkshire billionaire leader Hathaway has long called for a tax hike for the ultra-rich like him.
Bob Lord, tax lawyer and associate member of the progressive think tank Institute for Policy Studies, said that while this particular proposal is not passed, it reflects how much concerns about financial inequality are growing.
ProPublica reported in June that some of the wealthiest Americans paid little or no income tax in some years, including Musk, who the report said paid no income tax in 2018. Critics argue that Musk’s criticism of the billionaire’s tax proposal overlooks the fact that Tesla’s rise to power has been aided by government incentives and loans.
Lord noted, for example, that the rise of Tesla stock on Monday, after a large Teslas order from Hertz, increased Musk’s wealth by about $ 37 billion – more than the IRS collects. in inheritance and gift tax revenues from across the country in one year.
Wyden’s proposal, Lord suggested, may need to fill in some loopholes.
âBut I think they did a really good job with it,â he said. âThere are people who say billionaires are just going to put their money in unlisted assets. But it’s not going to be that easy. It’s a pretty tight bill.
Such tax changes could also alter the way billionaire philanthropists give.
Brian Mittendorf, an accounting professor at Ohio State University, said he believed that in the short term, the billionaire’s proposal would lead some of the wealthiest to rush philanthropic contributions into so-called funds advised by donors. Such funds would allow them to receive tax deductions up front without distributing money. (Donors cannot recover money from these funds).
“If, in fact, this were to pass,” Mittendorf said, “it would create huge incentives to donate some of these assets that have risen in value before taxes hit.”
AP Business Writer Glenn Gamboa contributed to this article.
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