The world’s richest man Elon Musk, took to his Twitter handle to criticize the so-called billionaire tax proposal that has divided Washington over ideological beliefs and is trending on social media too.
The tax proposal targets the 700 richest U.S. taxpayers and is part of President Joe Biden’s “Build Back Better” campaign worth $2 trillion. The campaign comprises a number of historic investments related to childcare, education, health care, and battling climate change. The proposal has been presented by Democrats, but it is facing resistance in Congress from Republicans as well as more moderate Democrats.
The most controversial part of the “billionaire tax” is a 23.8% tax rate on the long-term capital gains on tradable assets. The tax is to be levied only on billionaires who either have earnings over $100 million in annual income or have $1 billion in assets. The proposal if passed, will radically rewrite the tax code which presently taxes assets like shares in companies only when they’re bought or sold. The new policy encompasses treating billionaires’ fortunes like business income, consequently taxing their assets on a mark-to-market basis every year.
The move will hit hard tech titans like Amazon founder Jeff Bezos, Tesla founder Musk, and Facebook’s Mark Zuckerberg.
Musk has openly criticized the proposal as he tweeted out warnings on Wednesday that a tax on billionaires would only make a minor dent in the federal deficit. He added that Washington would eventually come after the general public as well. Musk tweeted, “Eventually, they run out of other people’s money and then they come for you”.
Musk posted on Twitter again discussing his intentions regarding the usage of his money, “My plan is to use the money to get humanity to Mars and preserve the light of consciousness.”
Opposition
As per the Bloomberg Billionaires Index, Musk’s personal wealth is coming close to $300 billion, a 72% year-to-date gain that has been driven by a bull run in Tesla stocks and his stake in the rocket-manufacturing company SpaceX. Followed by Bezos who is still far behind at $196 billion.
Musk became vocal about his opposition to the proposal as tax watchdogs target the ultra-wealthy’s use of the tax code to protect their fortune from the full tax rate. As an example, IRS data shows that Musk paid $455 million in income tax during the years between 2014 and 2018.
More progressive Twitter users reminded Musk that Tesla has been highly dependent upon government stimulus spending over the years. For example, the electric-vehicle maker was granted a $465 million loan from the U.S. Energy Department in 2010 and the company also took a $2.9 billion contract from NASA in 2019 to build a moon lander.
At the end of the day, the Democrats and not billionaires may be the ones who ultimately reject the billionaire tax bill.
The most vocal Democrat critic is West Virginia Sen. Joe Manchin, who said to reporters, “I don’t like it. I don’t like the connotation that we’re targeting different people.” He further praised billionaires’ contribution to society in terms of the generation of jobs and their philanthropic pursuits.
Mark Warner, the second richest senator with a net worth of $215 million, said that it made sense for the “absolute wealthiest Americans pay a fair share.” He further noted that the “devil is in the details” and it was critical to not favor “one asset class over another.”
