Elon Musk, the founder of Tesla criticized the Democratic tax proposal on Monday. The Democratic tax imposes on American billionaires to fund a safety net expansion.
“Eventually, they run out of other people’s money and then they come for you,” he wrote on Twitter.
In another tweet, Musk argued that the governments’ efforts to reallocate wealth would be better managed by the private sector instead.
“Who is best at capital allocation – government or entrepreneurs – is indeed what it comes down to,” He Tweeted. “The tricksters will conflate capital allocation with consumption.”
Musk targeted a proposal that is authored by Sen. Ron Wyden, chair of the Senate Finance Committee. According to sources, the proposal will be unveiled on Wednesday and is supposed to impose new taxes on tradable assets. For instance, stocks held by over 700 billionaires will be reallocated to fund an expansion of childcare, healthcare and renew President Joe Biden’s child tax credit.
Compared to everyone else; billionaires usually pay lower tax rates. This is because most of the billionaires profit from increasing the value of their stock and shares. Consequently, billionaires build their wealth from assets that aren’t subject to capital gains taxes unless they are sold.
Gabriel Zucman, an economist for The Washington Post shared a new analysis that states that Elon Musk might be hit with over $50 billion in taxes in the 1st Five year stretch of tax implementation. Nonetheless, several experts expect that the plan might be hard to apply. This is because it would add a new layer of the tax code for billionaires.
In a blog post, Steve Rosenthal; a tax expert at the nonpartisan Tax Policy Center said that billionaires might manipulate assets to shrink their tax bills.
Senate Republicans are already slamming the proposal. Sen. Mitch McConnell of Kentucky, the GOP minority leader, called it a “hare-brained scheme” on Monday.