Why Elon Musk Is Pissed At Biden’s New Billionaire Tax
The US Democrats have just unveiled an ambitious new plan to tax billionaires.
The money would go directly into a new policy that’d expand social services and tackle climate change.
But, unsurprisingly, the new plan is being slammed by the richest man in the world, Elon Musk.
So, What’s This New Billionaire Tax?
In a nutshell, the proposed plan wants to appropriately tax billionaires and ensure big companies can’t wriggle out of paying income tax.
The money would fund new social policy and climate spending – which is estimated to cost the US government around $1.5 trillion dollars.
And President Joe Biden is trying to get the proposal across the line before he heads to COP26 in Glasgow.
The new tax was proposed by Senate Finance Committee Chair Ron Wyden, who said it would ensure billionaires pay tax every year, just like working Americans.
And would only affect about 700 of America’s super rich, which is roughly 0.0002% of the population.
That’s people who either earn more than $100 million per year or have more than $1 billion in assets three years running.
In other words, people like Elon Musk, Jeff Bezoz, Bill Gates, and Mark Zuckerberg.
Why Is It Causing Such A Stir?
Well, the very wealthy in America, and even in Australia, don’t usually pay income tax on all of their income each year like the rest of us do.
That means, any assets billionaires have in unrealised gains, like stocks or bonds that haven’t been sold yet, are usually safe from tax until they are sold.
But in this new proposal, for the first time ever, US billionaires would face being taxed on their unrealised gains.
Which Elon Musk is not happy very about.
The Tesla CEO criticised the proposal in a tweet saying “Eventually, they run out of other people’s money and then they come for you.”
He also tweeted how he thinks induced reallocation of wealth would be better managed by the private sector not by the government.
Who is best at capital allocation – government or entrepreneurs – is indeed what it comes down to.
The tricksters will conflate capital allocation with consumption.
— Elon Musk (@elonmusk) October 26, 2021
Musk could pay up to $50 billion US dollars in taxes in the first five-years of implementation.
But experts are worried that the billionaire tax could just lead to more tax avoidance, which the super-rich are pretty good at already.
Senate Republicans totally oppose the proposal, and even some Democrats don’t agree with targeting specific people for a tax.
This isn’t the only effort to get the world’s richest people to do some good with their money.
The UN has called on both Elon Musk and Jeff Bezoz to donate just 0.36% of their net worth and help save approximately 42 million people from starvation.
And in total reverse, 30 millionaires in the UK have asked to be taxed to pay for the pandemic recovery, so the responsibility doesn’t fall on those with lower incomes.
Meanwhile in Australia, our federal government has locked in one of our most regressive tax laws we’ve seen in a while.
The new tax cuts will see people earning between $45,000 and $200,000 to pay the same tax rate from 2024.
Making Australia’s top earners, the biggest winners.