Elon Musk, the world’s richest man, took to Twitter overnight to savage the so-called billionaire tax proposal that’s dividing Washington over ideological lines and is dominating the discourse on social media too.
The tax idea, which would target the 700 richest U.S. taxpayers, was dreamed up to finance President Joe Biden’s $2 trillion “Build Back Better” campaign, which carries a number of historic investments around childcare, education, health care, and combating climate change. The Democrat-led proposal, though, is facing stiff blowback in Congress—not just from Republicans but also from more moderate Democrats.
The thorniest part of the “billionaire tax” is a 23.8% tax rate on the long-term capital gains on tradable assets. As it currently stands, it would be levied only on billionaires who either earn more than $100 million in annual income or have $1 billion in assets. It would be a radical rewrite of the tax code, which currently taxes assets like shares in companies only when they’re bought or sold. The new policy would treat billionaires’ fortunes like business income, and tax their assets on a mark-to-market basis each year.
Such a move would hit hard tech titans like Musk, Amazon founder Jeff Bezos, and Facebook’s Mark Zuckerberg.
Musk has been the most vocal of the bunch. Again on Wednesay he tweeted out warnings that a tax on billionaires would only make a small dent in the federal deficit. Washington, he ominously added, would eventually come after the general public too. “Eventually, they run out of other people’s money and then they come for you,” he tweeted.
He tweeted today what he intends to use the money on.
“My plan is to use the money to get humanity to Mars and preserve the light of consciousness.”
Criticisms
According to the Bloomberg Billionaires Index, Musk’s personal wealth is nearing $300 billion, a 72% year-to-date gain that’s fueled by a bull run in Tesla stocks and his stake in the rocket-manufacturing company SpaceX. Bezos, at $196 billion, is a distant second.
Musk’s vocal opposition comes as tax watchdogs take aim at the ultrawealthy’s use of the tax code to shield their fortune from the full tax rate. For example, Musk paid $455 million in income tax between 2014 and 2018, according to IRS data reported by ProPublica.
On Twitter, progressive-minded commentators remind Musk that Tesla has been highly reliant upon government stimulus spending through the years. For example, the electric-vehicle maker received a $465 million loan from the U.S. Energy Department back in 2010 and more recently took a $2.9 billion contract from NASA in 2019 to build a moon lander.
In the end, it may be Democrats, and not billionaires, who ultimately kill the billionaire tax bill.
The loudest Democrat critic is West Virginia Sen. Joe Manchin, who told reporters, “I don’t like it. I don’t like the connotation that we’re targeting different people.” He also praised billionaires’ contribution to society by creating jobs and through their philanthropic pursuits.
Meanwhile, Mark Warner, the second richest senator with a net worth of $215 million, said that it made sense that the “absolute wealthiest Americans pay a fair share.” But he also noted the “devil is in the details” and it was crucial to not favor “one asset class over another.”
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