The tremendous wealthy push again in opposition to requires a wealth tax : NPR

In the course of the pandemic U.S. billionaires noticed their wealth improve by greater than $1 trillion. Nearly all of that improve will not be taxed as a result of their web price is tied up within the shares they personal.



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One-point-two trillion {dollars} – that’s how a lot the wealth of U.S. billionaires has grown through the pandemic, at a time when many People have struggled. This has led to new requires a wealth tax. Among the tremendous wealthy are pushing again in opposition to it. NPR’s David Gura experiences.

DAVID GURA, BYLINE: It is laborious to get your head round these numbers, however there are about 800 U.S. billionaires, and altogether they’re price greater than $5 trillion. That is a 5 with 12 zeroes after it. It is roughly the dimensions of Japan’s complete economic system. It is virtually two occasions the dimensions of India’s.

BEN STEVERMAN: What’s occurred through the pandemic is that the wealthiest of the rich appear to be reaping an enormous proportion of the rewards.

GURA: And in line with Ben Steverman, who helps put collectively the Bloomberg Billionaires Index, the vast majority of that’s untaxed as a result of their web price is tied up in shares they personal. And beneath present regulation, the federal government cannot contact it.

STEVERMAN: In our tax system, you solely get taxed whenever you promote an funding. A whole lot of these of us will not be promoting. They’re simply holding on.

GURA: Elon Musk is amongst these benefiting from this method. Tesla’s inventory has surged. The corporate’s market cap is now greater than a trillion {dollars}. And Musk, who can also be the CEO of SpaceX, has seen his fortune go up, properly, like a rocket. And that is due to how he is paid.

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ELON MUSK: I do not truly draw a wage or something. My money compensation is mainly zero.

GURA: That is Musk in a current interview. And what he is getting are firm shares. This has drawn criticism. And some days in the past, Musk tried to quiet a few of it. The world’s richest man polled his 62 million Twitter followers, asking them if he ought to promote 10% of his Tesla inventory, a stake at the moment price about $20 billion. Scott Dyreng is an accounting professor at Duke College, and he says Musk would face a multibillion-dollar tax invoice if he have been to dump a stake of that measurement. However Dyreng and different tax consultants questioned Musk’s motives.

SCOTT DYRENG: It looks as if slightly little bit of a publicity stunt, which isn’t unusual for Elon Musk, to say, hey, all people’s mad that we’re not paying taxes. How about I simply promote 10% of my shares, after which I will need to pay taxes on these shares?

GURA: Musk posted his Twitter ballot in response to a proposal from Democratic Senator Ron Wyden for a brand new tax simply on billionaires. It is a narrower model of a wealth tax Senator Elizabeth Warren needs on extremely millionaires, People price greater than $50 million.

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ELIZABETH WARREN: Whether or not you’ve got money or whether or not you’ve got a bazillion shares of Amazon – sure, Jeff Bezos, I am taking a look at you – no matter type you’ve got your belongings – diamonds, yachts, work – I believe there should be a tax on that yearly.

GURA: There’s by no means been a wealth tax within the U.S., and Musk will not be the one billionaire pushing again on the idea.

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LEON COOPERMAN: The concept of vilifying rich folks is so bogus.

GURA: Hedge fund supervisor Leon Cooperman informed CNBC this sort of tax could be unfair.

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COOPERMAN: They’re interesting to the plenty. Each billionaire I do know made their billions by offering a productive, helpful service or product. And that is why they made their cash.

GURA: And, the tremendous wealthy argue, a wealth tax could be too laborious to calculate as a result of the worth of inventory goes up and down. Cooperman additionally says he ought to determine what to do together with his fortune, not the federal government. Accounting professor Scott Dyreng suggests there may very well be one other potential drawback.

DYRENG: I’ve by no means seen a tax that was not prevented ultimately.

GURA: Polls present most People imagine the wealthy ought to pay extra in taxes, however there continues to be a disconnect between public opinion and coverage. Only a few hours after Senator Wyden put his plan on the desk, it was clear there is not the political assist to move it.

David Gura, NPR Information, New York.

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https://www.npr.org/2021/11/10/1054175407/the-super-rich-push-back-against-calls-for-a-wealth-tax