Elon Musk says he supports a controversial tax that many of his billionaire peers despise
- Elon Musk said he thinks the estate tax is "a good tax."
- It taxes the estates of high-net-worth individuals.
- Musk opposes a wealth tax on billionaires' assets that some Democrats have floated.
Elon Musk has made it clear he's against a wealth tax on the richest Americans that could leave him with an annual tax bill in the billions. But he thinks taxing inheritances is a good idea.
"Generally, I think the estate tax is a good tax," the Tesla CEO said at The Wall Street Journal's CEO Council Summit in response to a question about how billionaires should be taxed. He said that his marginal tax rate is high, and that he pays sales tax as well.
Federal estate and gift taxes take a chunk inheritances worth more than $11.7 million for an individual or $23.4 million for a married couple. Someone who dies and leaves below that amount to their heirs doesn't have to give the federal government a slice.
Opponents of the estate tax argue it penalizes thriftiness over one's life and amounts to essentially a double tax on income. Supporters of the century-old tax say it chips away at economic inequality by ensuring that vast wealth can't flow uninhibited between generations. In practice, the measure affects relatively few estates, and the nation's wealthiest people don't have much trouble avoiding it through trusts and clever accounting.
It isn't the first time Musk has voiced support for the tax over other measures lawmakers have proposed to impose more taxes on the country's richest individuals, like a higher capital-gains tax. "Higher estate tax better than income/cap gains tax. Probability of progeny being equally excellent at capital allocation is not high," Musk tweeted in 2018.
Musk, whose net worth has ballooned to nearly $300 billion this year, making him the richest person on the planet by far, has sparred with Democratic lawmakers on Twitter about a proposed wealth tax aimed at the country's richest individuals. The policy would move to tax billionaires' assets, rather than only taking a slice once those assets, like stocks, are sold for a profit.
At The Wall Street Journal's event, Musk argued it doesn't make sense to take assets from people who have a demonstrated ability to manage and invest money.
"It does not make sense to take the job of capital allocation away from people who have demonstrated great skill in capital allocation and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government," he said.
A 2021 report from ProPublica said Musk paid no federal income tax in 2018, citing leaked IRS documents. In recent months, he has sold massive tranches of Tesla shares to pay taxes on maturing stock options that are part of his compensation package.