Why Elon Musk Doesn’t Want to Pay Democrats’ Proposed Billionaire Tax

The world's richest man says even taxing billionaires at 100 percent wouldn't solve America's national debt problem.

Elon Musk, Tesla CEO, stands in the foundry of the Tesla Gigafactory in Berlin during a press event in August 2021. Patrick Pleul/picture alliance via Getty Images

For years, America’s ultra-wealthy have managed to pay little income tax by claiming a nominal salary and locking the vast majority of their fortune in stocks and other investments. An unprecedented tax bill proposed by Senate Democrats could change that overnight.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) said on Monday he’s preparing to release the proposal, known as the “billionaire tax” this week. While details are still under negotiation, tax experts predict that the bill would raise tens of billions of dollars in tax revenue, half of which would come from the 10 wealthiest people in the nation, including Elon Musk, Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and others.

Unsurprisingly, billionaires don’t like the idea. Musk, the newly crowned world’s richest person, has been attacking the billionaire tax on social media since Monday. According to his math, even taxing all billionaires at 100 percent wouldn’t make much of a difference in solving America’s debt crisis.

“US national debt is $28,900 billion or $229K per taxpayer. Even taxing all ‘billionaires’ at 100 percent would only make a small dent in that number, so obviously the rest must come from the general public,” he tweeted on Tuesday.

“Spending is the real problem,” he added, taking issue with Democrats’ view that the billionaire tax could help pay for President Biden’s $3.5 trillion climate and social spending plan.

Still, it’s hard to ignore the fact that the total net worth of U.S. billionaires has almost doubled since the pandemic began, standing at $5.04 trillion in October, according to the Institute for Policy Studies and Americans for Tax Fairness. The 10 wealthiest Americans are collectively worth $1.3 trillion.

Former South Carolina Governor David Beasley, now the director of the United Nations’ World Food Program, estimates that just 2 percent of Elon Musk’s fortune, or roughly $6 billion, would be enough to solve the world’s hunger problem.

Under Wyden’s proposal, billionaires would have to pay a roughly 24 percent tax on unrealized capital gain on an annual basis, meaning that the increase in the value of their publicly traded stock would be taxed even before they are sold. Critics of the plan argue that the measure would force these people to regularly sell company shares in order to pay taxes in cash, which could decrease their voting power in their companies and hurt stock prices.

Under the billionaire proposal, Musk would pay as much as $50 billion in tax over its first five years, while Bezos would pay as much as $44 billion, according to UC Berkeley economist Gabriel Zucman’s estimate, reported byThe Washington Post.  The 10 richest people would pay a combined $276 billion in taxes on their lifetime earnings.

“According to their own estimates, this tax only covers 10 percent of the $3.5 trillion spending bill,” Musk said in an earlier tweet on Tuesday. “Where will the other 90 percent come from? The answer is you.” Why Elon Musk Doesn’t Want to Pay Democrats’ Proposed Billionaire Tax