"Stupid" and "insane": Billionaires rant about their tax plan

The Tesla CEO, who has a personal fortune of $300 billion, is adamant about a Democratic proposal that would tax billionaires' assets.

The Democratic plan would use the revenue from a billionaires' tax to pay for a domestic package that Congress is negotiating. It would include universal prekindergarten, combating climate change, and expanding health care programs. Although the framework that President Joe Biden released Thursday for the domestic policy package didn't include this proposal, it was included in the agreement among Congressional Democrats.

Musk recently passed Jeff Bezos, the founder of Amazon, to become the No. 1 global businessman. The Democratic proposal would place Musk at risk of a $50 billion tax hike. This is due to Tesla's share price explosion.

He says forget it.

SpaceX founder, who tweeted about his fortune Thursday, said that "My plan" to use the money "to get humanity to Mars and keep the light of consciousness."

With the White House framework removing the proposal, he may be able to get what he wants.

Musk stated earlier this week that the problem with government spending too much money is the root cause. He also warned that his billionaire tax proposal could result in tax increases for more Americans.

He tweeted Monday that "Eventually" he meant, "They run out of money from other people, and then they come after you."

Wednesday's Democratic proposal was unveiled by Senator Ron Wyden. It would tax gains of individuals with $1 billion or more assets or three years of income exceeding $100 million. The capital gains tax rate is 20% and the net investment income rate is 3.8%. The tax would be applicable to less than 800 people. They would be subject to tax on the market value of tradable goods like stocks even if they do not sell them. According to current law, these assets are only subject to tax when they are sold.

The tax could raise $200 billion over 10 year, which could be used to fund Biden's legislative priorities. The proposal is opposed by all Republicans. Some have even suggested that it might be challenged in court.

The Democrats' proposal was made against the backdrop growing economic inequalities. Many multi-billionaires in America have seen their wealth increase during the COVID-19 epidemic, due to higher stock and home equity.

John Catsimatidis (the billionaire owner of Gristedes and a grocery chain) condemned the proposal, describing it as something that you would expect Putin to do. This refers to President Vladimir Putin of Russia.

Catsimatidis said that the billionaire tax plan is "a little crazy."

"The American people are at the point where they're saying: 'Enough is enough," stated Catsimatidis. He lost the Republican nomination to be New York City's mayor in 2013.

Stop spending money foolishly. They create budgets that are absurd and want to make everyone else suffer.

Catsimatidis asked, "Does infrastructure exist?" "Yes, infrastructure is necessary. Are we going to need bridges? We don't have to.

He said that billionaires are the ones who create jobs. "We can get up to go somewhere else."

Leon Cooperman, a billionaire investor and outspoken critic of Sen. Elizabeth Warren’s wealth tax proposal, has now joined the chorus of frustration from some of the super-wealthy.

Cooperman stated that the tax was illegal and stupid in an interview with The Daily Beast.

He said that America's greatest asset was its people who began with little and made a lot of money, giving back to the community. It is absurd to continue attacking wealthy people.

Not every billionaire shares such outrage. According to a spokesperson for George Soros (an investor and liberal philanthropist), Soros supports the proposed tax on billionaires.

Warren Buffett has not yet commented publicly on the proposal. However, Berkshire Hathaway's billionaire chief has long advocated for higher taxes for ultra-wealthy people like him.

Bob Lord, a tax attorney and associate fellow at progressive think tank Institute for Policy Studies said that, even if the proposal is not approved, it does show how concerns about financial inequality are growing.

ProPublica reported that many of America's richest people have not paid income taxes, or almost none, over the past few years. This includes Musk who, according to the report, paid zero income taxes for 2018. Critics claim that Musk's criticisms of the billionaire tax proposal ignore the fact that Tesla has been supported by loans and incentives from the government.

Lord pointed out, for instance, that Musk's wealth increased by $37 billion Monday after Hertz placed a large order of Teslas. This is more than the total amount the IRS collects in gift and estate tax revenue for the country in a single year.

Lord suggested Wyden's suggestion might have to close some loopholes.

He said, "But I think that they've done an excellent job with it." There are people out there that believe billionaires will put their money in non-publicly traded assets. It's not going so well. It's a well-crafted bill.

These tax changes could also change how billionaire philanthropists donate.

Professor of Accounting at Ohio State University Brian Mittendorf said that he believes that the billionaire proposal will cause some of the super-wealthy people to rush their philanthropic donations into donor-advised fund. These funds would enable them to take tax deductions upfront without having to distribute any money. These funds are not available to donors.

Mittendorf stated that if this were to happen, it would create huge incentives for people to donate assets that had appreciated in value prior to the tax hit.