Elon Musk is taking aim at a US tax plan that could cost him R150 billion per year
- Elon Musk slammed a new US Democratic tax proposal that would target him, if implemented.
- "Eventually, they run out of other people's money and then they come for you," he wrote on Twitter.
- Musk could face up to $50 billion – the equivalent of some R150 billion – in taxes the first five years of the plan's implementation.
- For more stories, go to www.BusinessInsider.co.za.
Tesla founder Elon Musk on Monday evening criticised a US Democratic tax proposal that would target American billionaires to fund a safety net expansion.
The plan would cost him a lot of money, personally.
"Eventually, they run out of other people's money and then they come for you," he wrote on Twitter.
Exactly. Eventually, they run out of other peopleâ€™s money and then they come for you.— Elon Musk (@elonmusk) October 26, 2021
In a separate tweet, Musk insisted that any government-induced 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."
Musk is taking aim at a proposal chiefly authored by Senator Ron Wyden, chair of the Senate Finance Committee, which could be unveiled as soon as Wednesday. The plan is meant to levy new taxes on tradable assets like stocks held by roughly 700 billionaires to fund an expansion of US healthcare and childcare, and renew US President Joe Biden's beefed-up child tax credit.
Billionaires in the USA often pay lower tax rates compared to everyone else because they build up their wealth from the increasing value of their stock and shares. Those aren't subject to capital gains taxes until they are sold.
A new analysis conducted by economist Gabriel Zucman for The Washington Post indicated that Musk could face up to $50 billion – the equivalent of some R740 billion – in taxes in the first five-year stretch of the tax's implementation.
But some experts say the plan could be difficult to implement, since it would set up another layer of the tax code for billionaires. Steve Rosenthal, a tax expert at the nonpartisan Tax Policy Center, wrote in a blog post that potential problems include how asset losses are treated and whether billionaires could use it 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.