Tesla founder Elon Musk criticized the Democrats’ latest proposal to tax unrealized gains by the country’s billionaires, Insider reports.
Democrats are planning to include a tax on unrealized gains by about 700 billionaires and those that earn over $100 million per year to pay for some of President Joe Biden’s spending bill after Sen. Kyrsten Sinema blocked the president’s plan to roll back some of the Trump tax cuts on the wealthy and corporations.
Musk could face up to $50 billion in new taxes over the first five years if the tax is approved, according to one analysis. Fellow billionaire Jeff Bezos could pay as much as $44 billion over the same time period.
Collectively the top 10 richest Americans own about $1.3 trillion in assets. Under the Democratic proposal, they would be on the hook for about $276 billion in taxes.
"Eventually, they run out of other people's money and then they come for you,” Musk said on Twitter in response to the new plan.
"Who is best at capital allocation – government or entrepreneurs – is indeed what it comes down to," he added. "The tricksters will conflate capital allocation with consumption."
A recent ProPublica report found that Musk paid just $455 million in taxes between 2014 and 2018, about 100 times less than he would pay under the new proposal.
“If there’s a sliver of good news, it’s that there may be at least enough political cohesion to target a class that clearly has a great deal of resources way in excess of what it needs,” Darrick Hamilton, an economist at the New School, told the Washington Post. “When you see billionaires being able to go space and back for hobby and fun — in a society worried about floods on a periodic basis — that’s a problem.”
Economist Gabriel Zucman said the tax would be the “most progressive tax in history.” Though it may be difficult to implement, Zucman downplayed the potential issues in creating a new system.
“For these guys, the truth is it’s so easy to enforce the tax because it’s so obvious what they own,” Zucman said.