Senator Elizabeth Warren, a member of the Senate Finance Committee, described Time magazine’s Person of the Year Elon Musk as the ‘poster boy’ for her Ultra-Millionaire Tax Act, which she co-sponsored with Representative Pramila Jayapal and Representative Brendan Boyle.
The Ultra-Millionaire Tax would bring in at least $3 trillion in revenue over 10 years – without raising taxes on the 99.95% of American households that have net worth below $50 million, according to Lisa McCormick, a leading progressive activist in New Jersey, who added that fair taxation is necessary to maintain confidence in a republic.
“Elon Musk — a poster child for how our rigged tax code lets billionaires pay hardly any taxes at all,” said Warren, who said Musk paid zero dollars in federal income taxes in 2018; and got $13.9 billion richer from 2014 to 2018, but only paid 3.27% of that new wealth in taxes; then during the first year of the pandemic, “got about $143 billion richer while millions of Americans struggled to put food on the table and keep a roof over their heads.”
“When someone makes it big in America — millionaire big, billionaire big, Person of the Year big — part of it has to include paying it forward so the next kid can get a chance, too,” said Warren. “So I’ve got a plan to make Elon Musk and ultra-millionaires and billionaires like him pay their fair share: a wealth tax on fortunes greater than $50 million. That way, the richest of the rich can’t avoid a tax bill by doing fancy accounting with their income.”
“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” said Warren. “I’m in this fight to make our country work for everyone — not just a thin slice at the top. But we’re only going to make big, structural change if we fight side by side.”
Warren’s tax proposal would generate at least $3 trillion in new federal revenue over 10 years – without raising taxes on the 99.95% of American households that have a net worth below $50 million – according to a 2021 analysis from economists Emmanuel Saez and Gabriel Zucman from the University of California-Berkeley.
The measure would impose a two percent annual tax on the net worth of households and trusts between $50 million and $1 billion, plus another one percent annual surtax (for 3% tax overall) on the net worth of households and trusts above $1 billion.
“The hyper concentration of wealth among a tiny number of multimillionaires and billionaires is a crisis for American capitalism and the American Dream,” said Boyle. “Wealth inequality is at its highest level since the Gilded Age. The wealth share of the richest 0.1% has nearly tripled since the late 1970s.”
“If ultra-millionaires pay their fair share, then important government programs can help every American prosper, so this proposal could make a meaningful difference in the lives of people who need it most and revive our country’s shrinking middle class,” said Lisa McCormick, who said progressives should not vilify Musk for his success in pursuing global challenges, such as internet banking, electric cars and space exploration.
“Nobody likes paying taxes, but when Mr. Musk took $4.9 billion in government subsidies to launch Tesla, and used our tax code to avoid paying any federal income taxes on his massive wealth, he lost the moral right to complain about Senator Warren’s effort to make the system fair,” said McCormick. “Elon Musk’s wealth grew from $2 billion in 2011 to $265 billion in 2021, but the federal minimum wage today is the same $7.25 that it was in 2011.”
McCormick says Warren’s bill is needed because Republicans undermined our working-class economy in the 1980s and establishment Democrats have been too timid about restoring the middle-class.
“Reaganomics was America’s economic suicide: The economy was booming when top income tax rates were 70 to 90 percent & corporate taxes made up a far greater share of federal spending,” said McCormick. “Everyone had good education plus decent jobs, which gave us greater freedom, health and security as a result of the New Deal instituted by President Franklin Roosevelt.”
McCormick said Republicans rejected and blocked another set of proposals that Roosevelt called ‘second bill of rights,’ until some of those ideas won legislative approval when Lyndon Johnson was president, but a radical change occurred after President Ronald Reagan got to the White House.