Office hours: Elon Musk and the billionaire tax
Even Kyrsten Sinema is open to taxing billionaires
Good morning.
Elon Musk made $36 billion on Monday. It would take a typical American worker more than 800,000 years to earn that. But Musk now warns that a tax on billionaires -- such as Democrats are now considering (and even Kyrsten Sinema seems open to) -– would eventually lead to higher taxes on everyone else. The truth is the opposite: if billionaires don’t pay their fair share, the rest of us will have to pay more to make up the difference.
That doesn’t end the debate, obviously. Eager to have your thoughts about a billionaire tax. I’ll weigh in with mine today at 10 am PT, 1 pm ET.
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Elon Musk’s tweet (click to see the thread):
My response on MSNBC:
I pulled a few community norms from an old syllabus. Please keep them in mind:
— Practice civility. Civility is not about agreeing. It’s about how we disagree. Let’s avoid the nastiness that has come to dominate so many of our online conversations these days.
— Assume positive intent. Try to understand what others are getting at.
— Be open-minded about dissenting views. The best way of learning anything is to talk to somebody who disagrees with you.
— Reach out. I hope that Office Hours can be dialogue not only between you and me, but also among one another.
Friends,
I find it startling that a billionaire tax could be on the table now, and ironic that it’s because Kyrsten Sinema didn’t want to raise tax rates on the wealthy and on corporations. As you probably know, under the plan, the capital gains tax of 23.8 percent would apply to the increased value of stocks, bonds, and cash held by anyone with more than $1 billion in assets or more than $100 million in income for three consecutive years. We’re talking about roughly 700 people in the United States.
Initially, billionaires like Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos and Tesla’s Elon Musk would pay a substantial sum (still tiny relative to their total assets) simply because the starting value of their shares of stock was zero. Then they and other billionaires would pay an annual capital gains tax on the increase in value of their tradable assets over the course of the year. They could deduct any loss in value from their taxable gains.
Wealth is now concentrated at the top in ways America hasn’t witnessed in more than a century. Meanwhile, billionaires have avoided income taxes by paying themselves low salaries (Bezos’s official salary has been around $80,000 a year) while borrowing off their assets to finance their luxury lifestyles.
Make no mistake. We are back in the age of the robber barons of the first Gilded Age. On Monday alone, Musk’s fortune increased by $36 billion. It would take the typical American worker more than 800,000 years to earn this sum – and, again, this is only the increase in his fortune.
Meanwhile, most Americans are experiencing the cruelest form of capitalism among all rich countries – lacking childcare, paid leave, affordable healthcare, affordable college, unemployment benefits, and more, all of which are considered routine in other rich countries.
The game has been rigged against working Americans. I think this is a big reason why working Americans without college degrees went for Donald Trump in 2016. Biden's plan attempts to reverse some of this, but it is a very tough slog.
What do you think?
Joe Manchin said today that he doesn't oppose taxing billionaires, but he doesn't think they should be singled out, suggesting that everyone should have to pay taxes on at least some of their income. If Manchin doesn't sign on, the billionaire tax is dead.
Why shouldn't Manchin sign on? How many billionaires are there in West Virginia? On the other hand, how many West Virginians would benefit from access to affordable childcare, healthcare, pre-K, community college, and paid leave?
Manchin must know that just about everyone in America pays taxes on something -- sales taxes, the gas tax, property taxes, and so on. These are all in effect taxes on income because they reduce net income. And levying a tax on billionaires doesn't "single out" billionaires. It simply acknowledges a hard truth about the American economy today -- that more and more of the nation's wealth is going to a few people at the top.
Say it ain't so, Joe.