Elon Musk sparred with Bernie Sanders over the weekend, insulting the Vermont senator after he tweeted that Americans must demand the “extremely wealthy pay their fair share.”
“I keep forgetting you’re still alive,” Musk responded. “Want me to sell more stock, Bernie? Just say the word…”
The fiery exchange touched on an increasingly popular debate in U.S. politics: how to tax the richest Americans, whose net worth increased significantly during the COVID pandemic.
The vast majority of Americans pay tax on earned income, also known as income tax. But most billionaires have their wealth tied up in company stock, which is not subject to taxes unless it’s sold. Currently, some of the world’s most notable multibillionaires, like Jeff Bezos and Michael Bloomberg, pay little to no income taxes. Musk paid no federal income taxes in 2018, according to a report by ProPublica. He’s currently the richest person in the world and worth about $285 billion. Property taxes are not a major concern for the ultrawealthy either, the New York Times reported, as homes and land usually represent a small portion of their total wealth.
Sanders, who is the current chairman of the Senate Budget Committee, has long been a vocal proponent of taxing the rich. Back in March, he called the immense wealth of tycoons like Musk and Amazon founder Jeff Bezos “immoral” and “unsustainable.”
Earlier this year he, along with Sen. Elizabeth Warren (D-Mass.) and a few other Democrats, proposed a 2% annual tax on wealth over $50 million and 3% tax over $1 billion. The so-called Ultra-Millionaire Tax Act targets the wealthiest 100,000 households in America by taxing their net worth rather than their annual income. The proposal has yet to pass the Senate.
Although Sanders’ plans for tackling the ultrawealthy have often been touted as extreme and improbable, there’s been growing demand that the richest Americans pay more. According to a Reuters poll from 2020, 64% of Americans agreed that the very rich should contribute more of their total wealth to support public programs.
Sen. Ron Wyden (D-Ore.) introduced legislation for a “billionaires income tax” last month to help pay for President Biden’s budget. The plan included imposing annual taxes on unrealized gains for those who held more than $1 billion in assets, or more than $100 million in income for three consecutive years. Wyden’s proposal won over several members of the House and Senate, but it was cut from the budget deal soon after it was introduced.
In the latest version of President Biden’s Build Back Better plan, those in the top 1% would pay about $55,000 more in taxes, while those in the top .01% would pay an additional $585,000.
But whether this latest plan will endure the coming weeks is unclear. And the possibility of passing a real wealth tax remains out of reach. But that might not stop the debate, even among protestations of famous billionaires.
“Eventually, they run out of other people’s money,” Musk wrote last month, “and then they come for you.”
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