Tesla and SpaceX CEO Elon MuskElon Reeve MuskThe case for a billionaires income tax PayPal says it’s not pursuing Pinterest acquisition Prince William urges focus on saving planet instead of space travel MORE ripped the Democratic proposal for an annual tax on billionaires’ investment gains on Monday as lawmakers consider the tax as a way to fund the party’s multitrillion-dollar reconciliation package.
Musk, who as of Monday had the highest net worth on Forbes’s list of billionaires, replied to a tweet featuring a photo of an email template constituents can send to their lawmakers to oppose the tax.
The letter, which is meant to be addressed to a congressional lawmaker, says, “I expect you to oppose the Wyden proposal to tax unrealized capital gains.”
“I anticipate that any new unrealized capital gains taxes will slowly make their way down to middle class retirement investments over the next several years. It will start with billionaires, then eventually millionaires, then the modest investments will get hit possibly within a decade,” the letter adds.
Musk appeared to agree with the contents of the letter, replying in a tweet, “Exactly. Eventually, they run out of other people’s money and then they come for you.”
Exactly. Eventually, they run out of other people’s money and then they come for you.
— Elon Musk (@elonmusk) October 26, 2021
In a separate tweet on Monday, Musk responded to an account that wrote, “I’d rather let @elonmusk allocate capital than Janet YellenJanet Louise YellenThe No Surprises Act: a bill long overdue On The Money — Democrats craft billionaire tax with deal in reach Treasury hires former JPMorgan executive as first racial equity counselor MORE.”
“Who is best at capital allocation — government or entrepreneurs — is indeed what it comes down to,” Musk tweeted in reply.
“The tricksters will conflate capital allocation with consumption,” he added.
Who is best at capital allocation – government or entrepreneurs – is indeed what it comes down to.
The tricksters will conflate capital allocation with consumption.
— Elon Musk (@elonmusk) October 26, 2021
The CEO’s comments come as Democrats on Capitol Hill are hashing out the final details of their spending package, including how to pay for its contents.
Musk is specifically taking issue with Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenOn The Money — Democrats craft billionaire tax with deal in reach Senators weigh future of methane fee in spending bill Senate negotiators homing in on proposal to tax billionaires MORE’s (D-Ore.) proposal to levy a tax on billionaires’ unrealized capital gains.
The proposal has gained steam on Capitol Hill, with some lawmakers pointing to it as an alternative funding path in light of moderate Sen. Kyrsten SinemaKyrsten SinemaOn The Money — Democrats craft billionaire tax with deal in reach Democrats face critical 72 hours Biden urges action on infrastructure bill alongside NJ’s Murphy MORE’s (D-Ariz.) opposition to raising tax rates on corporations and high earners.
It is, however, still facing hurdles, as some Democrats have expressed hesitation about adding a new tax proposal to the legislation. Additionally, some experts have said there could be difficulties in crafting the details of such an addition.
Wyden responded to Musk’s criticism on Tuesday, arguing that “tricky” individuals are the ones who are trying to evade paying taxes.
“The people who are clearly trying to be tricky are people who are trying to find a way to not pay taxes. In this case, the scandal is what is legal,” Wyden said.
Currently, people are not required to pay taxes on increases in the value of investments that have not yet been sold, known as “unrealized” capital gains.
The proposed tax, which is known as “mark-to-market,” would likely apply to roughly 700 taxpayers who have more than $1 billion in assets or $100 million in income for three consecutive years.
Qualified households would be required to pay annual taxes on gains of tradable assets, such as stocks. For assets that are not traded, billionaires would be required to pay a charge when they sell their investments in addition to capital gains taxes.
Naomi Jagoda contributed.
This story was updated at 6:37 p.m.