Tesla CEO Elon Musk slammed the Biden administration's proposed tax on unrealized capital gains Monday, warning Americans that the policy would set an extremely dangerous precedent.
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The tax — which would siphon money from people's stock gains before they are sold — is set to affect only billionaires if implemented. But many, including Musk, suspect the federal government won't stop there.
Responding to concerned citizen Rick McCracken's tweet about the dangers of "scope creep" as it relates to new tax laws this week, Musk wrote, "Exactly. Eventually, they run out of other people's money and then they come for you."
McCracken had posted a letter template for those interested in writing to their congressional representatives regarding the proposal. The template goes as follows:
Dear (Senator or Congress Member's name),
I expect you to oppose the Wyden proposal to tax unrealized capital gains. Although the proposal targets billionaires and not myself, the government of elected representatives have a track record of scope creep in writing new taxes. I anticipate that any new unrealized capital gains taxes will slowly make their way down to the middle-class retirement investments over the next several years. Then the modest investments will get hit possibly within a decade. Although principal residences and holdings in 401K plans apparently will be excluded, the Wyden proposal takes new tax hikes a step closer to imposing unrealized capital gains taxes on the average investor.
Thank you for your support.
McCracken tagged Musk and Amazon billionaire Jeff Bezos in the tweet.
Of course, as the world's richest man, Musk's opposition to the policy in many ways is expected, as he stands the most to lose from the implementation of the tax. But his reasoning is likely to resonate with many Americans who distrust politicians and already think the government taxes too heavily.
Also, Republicans stand opposed to the tax proposal because it is being floated as a way to pay for President Biden's multitrillion-dollar social spending package.
Democrats hope the tax will generate at least $200 billion in revenue over a decade to help pay for the costly legislation, the New York Times reported.
The outlet noted the tax, which is being put together by Democratic Sen. Ron Wyden (Ore.), head of the Senate Finance Committee, "would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years."