“Stupid” and “insane”: some billionaires speak out on their tax plan
(AP) – The richest man in the world is not happy.
With a personal fortune flirting with $ 300 billion, Tesla CEO Elon Musk 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.
Musk, who recently overtook Amazon founder Jeff Bezos as the world’s No.1 wealth thanks to soaring Tesla’s share price, would face a $ 50 billion tax under 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 might just make his wish come true. The billionaire’s tax outlook appears to be fading quickly in Congress. Pivotal Senator Joe Manchin of West Virginia signals his opposition to the plan with others, including some of his fellow Democrats, who have described such a tax as logistically impractical.
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.
“Finally,” he tweeted on Monday, “they don’t have any more other people’s money, then they come and get you.”
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. 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 comes amid growing concerns over vast economic inequality, as the wealth of many US multi-billionaires has accelerated during the COVID-19 pandemic, thanks to rising inventory and home equity , 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 saying, ‘Enough is enough,’ said Catsimatidis, who lost a candidacy for the Republican nomination for mayor of 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? Catsimatidis added. âOf course, we need infrastructure. Do we need bridges to nowhere? No, we don’t need it.
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, âwere the people who started with nothing like me, who made a lot of money and gave it back. A relentless attack on the rich didn’t any 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 proposed tax, 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 tax revenue on inheritance and donations nationwide 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 is a fairly well put together 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 donor-advised funds. 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.