“Who is John Galt?” The phrase is a recurring rhetorical question in the novel ‘Atlas’s Rebellion’ (Ayn Rand, 1957). This antisocialist dystopia shapes a world in which the great generators of wealth disappear and states are forced to pass on the taxes they paid to the middle and lower classes until society collapses. Elon Musk warns that reality may once again surpass fiction.
The US Democratic Party this week presented a bill to tax the wealthiest with a new tax. According to the initiative, those who have more than $ 1 billion in assets or more than $ 100 million in annual income for three consecutive years will have to pay this new tax.
The tax would affect about 700 people, one of whom is the CEO of Tesla and SpaceX. Musk has taken to Twitter to support the proposal of a user who comments that if taxes on large fortunes continue to increase, they will end up being passed on to the middle classes. “It will start with the billionaires, then the millionaires, then modest investments will be affected within a decade,” says the user. “Exactly. Eventually, they will exhaust everyone else’s money and then they will come after you,” warns Musk.
Exactly. Eventually, they run out of other people’s money and then they come for you.
The difference of this new rate, called the tax on unsold capital gains, with respect to the tax code already in force is that on this occasion it will not be necessary that the benefit be real but that the virtual one will be worth.
For example, someone who owns more than 1 billion in shares only pays taxes when they sell them and generate a profit, but with the new initiative they would pay the tax simply for having those assets. Assets that do not fluctuate on the stock market, such as real estate, would be excluded from the calculation, although the payment would also increase when they are sold.
“The Billionaires Income Tax would ensure that billionaires pay taxes each year, like all other American workers. We have a historic opportunity to restore justice to our tax code and fund critical investments for American families,” the senator says who has presented the proposal, Democrat Ron Wyden.
Economist and researcher Gabriel Zucman has used the Bloomberg Millionaire Index to calculate how much some of the best-known fortunes would have to pay under the new law. Thus, Musk should pay the treasury 50,000 million, followed by the founder of Amazon, Jeff Bezos (44,000) and other personalities such as Larry Page (Google), Mark Zuckerberg (Facebook) or Warren Buffett (Berkshire Hathaway) hovering around 30,000 million.
According to Forbes, Musk has a fortune valued at about $ 275 billion. Their business projects, such as PayPal, Tesla or SpaceX, have revolutionized their respective productive sectors, as John Galt intended to do in Rand’s novel. It remains to be seen if the dystopia of the book is getting closer to being fulfilled.