According to a proposal unveiled on Wednesday by the top Senate Democrat for tax policy, US billionaires would pay tax on unrealized gains from their assets to help finance President Joe Biden's emerging social-policy and climate-change legislation.
The so-called billionaires tax, announced by Senate Finance Committee Chairman Ron Wyden on Tuesday, is part of a two-pronged legislative strategy that also includes a proposed 15% corporate minimum tax on the most profitable US corporations.
Wyden and other lawmakers, including Democratic Senator Elizabeth Warren, say the legislation is intended to reduce corporate and wealthy tax avoidance and could generate hundreds of billions of dollars to pay for Biden's "Build Back Better" legislation, which is expected to cost between $1.5 trillion and $2 trillion.
The White House supports the corporate minimum tax, which would complement a global corporate minimum tax recently agreed to by 136 countries and would target corporations that pay little or no tax by gaming the international tax system.
However, the billionaires tax may face opposition from Democrats in the House of Representatives, who favour straight tax increases on corporations and the wealthy to fund the Biden agenda.
Elon Musk, CEO of Tesla Inc (TSLA.O), blasted the plan on Twitter.
"Eventually they run out of other people's money and then they come for you," said Musk, who early this week was worth about $230 billion, according to Refinitiv. "Who is best at capital allocation -- government or entrepreneurs -- is indeed what it comes down to."