Elon Musk, the world’s richest man with a fortune approaching US$300bn, has thrown his (very expensive) toys out of the pram over a Democratic proposal to tax the assets of US billionaires to help pay for President Joe Biden's social and climate-change programme.
Tesla Inc (NASDAQ:TSLA)’s chief executive encouraged US citizens to write to their senator or congress member to oppose the tax, telling them that while the tax didn’t affect them now, it could do in the future.
“Eventually, they run out of other people’s money and then they come for you,” he wrote on Twitter in response to Rick McCracken, the chief executive of Cardano, who wrote a letter to his local senator expressing his opposition to the proposal.
For USA citizens opposed to the unrealized capital gains tax proposal by Senator @RonWyden , here is an example of a tactful and diplomatic letter template I made. You can use this or make/post your own. It's important to write your elected reps.
— Rick McCracken - CEO of Ada (@RichardMcCrackn) October 25, 2021
Musk said that any reallocation of wealth would be better managed by the private sector.
“Who is best at capital allocation — government or entrepreneurs — is indeed what it comes down to,” he wrote on Twitter. “The tricksters will conflate capital allocation with consumption.”
The plan, drafted by Senator Ron Wyden and released on Wednesday, would apply to around 700 billionaires and require them to pay taxes on the gains made in the value of their publicly traded assets, such as stocks and bonds.
The “Billionaires Income Tax” would apply to taxpayers with more than US$1bn in assets or more than US$100mln in income for three consecutive years and could raise hundreds of billions of dollars, according to the proposal.
“Working Americans like nurses and firefighters pay taxes with every paycheck, while billionaires defer paying taxes for decades, if not indefinitely. The tax code’s preferences for capital income over wage income fuel the concentration of dynastic wealth among the nation’s billionaires,” said Wyden.
“The wealthiest few who avoid taxes by indefinitely holding assets are also able to borrow against those assets to fund their lifestyles. This means they opt out of paying taxes and instead pay only low interest rates on loans from Wall Street banks. As a result, middle-class families who earn their incomes from wages and salaries may face higher average tax rates than billionaires.”
Musk’s fortune has jumped by US$117bn so far this year, pushing his net worth to US$287bn, according to Bloomberg Billionaires Index’s daily ranking.