The American Tycoon Elon Musk he or she returned to shoot against the president Joe Biden, this time for an initiative that proposes to hire some 87,000 public employees in the next ten years to close the “tax gap” by collecting taxes owed by large corporations, corporations, and wealthy individuals.
The CEO of Tesla is very critical of the Democratic administration, since Biden repeatedly ignored the owner of the world’s most profitable automaker, penalized it with taxes and even left it out of very important meetings with other American manufacturers.
This time, Musk took advantage of the comments of the legislator Lauren Bobert on the plan “Build Back Better” (Let’s rebuild better), which in one of its points proposes the hiring of 87,000 people in the Internal Revenue Service (IRS, for its acronym in English).
Boebert compared the proposed increase in the IRS workforce to Tesla and Apple, which employ 70,000 and 154,000 people, respectively. “Biden wants our IRS has 170,000 employees. An increase of 87,000 supposedly to monitor the 614 billionaires in the United States, “the Republican tweeted.
The IRS already has dedicated audit teams for high net worth individuals.
The doubling of staff is for everyone else.
— Elon Musk (@elonmusk)
November 22, 2021
To that, Musk responded, “The IRS already has dedicated audit teams for high-net-worth individuals. Duplication of staff is for everyone else“The CEO of Tesla thus added one more criticism, after the famous “Sleepy Joe” and the “not so friendly” management of Biden.
Why does Elon Musk disagree with this proposal? The initiative seeks to get large companies and billionaires to submit much more information to the regulatory agency than the current one on the money that circulates through the accounts of its clients.
That, in particular, does not convince the tycoon, who debe billions to the United States for unpaid taxes. In June, ProPublica published research that found that Musk did not pay federal income taxes in 2018. At the time, he was the second richest person in the world.
The vast majority of Elon Musk’s wealth is tied to stocks and options related to his three companies: Tesla, SpaceX, and The Boring Company. That means you pay next to nothing in income taxes because he does not receive a substantial cash salary for running the businesses. Instead, you are paid in company shares, which are not taxed until the options are sold or exercised.
How is the initiative rejected by Elon Musk
The IRS would hire 87,000 people over the next ten years, on a staggered basis, so the Department has time to adjust to the steady increase in staff. To do this, will have an increase in its budget of around 80,000 million dollars, that would come in the form of so-called mandatory expenditures that would not have to be approved each year by Congress. The idea of this initiative is to provide a more reliable flow of financing.
The agency had many changes in its funds over time. In recent years, their budget was reduced by 20%, leading to a sustained decrease in their workforce, particularly among specialized auditors conducting examinations of high-income, high-net-worth individuals and complex structures such as partnerships, multi-level approvals through multinational entities and corporations.
All of this would point to exerting greater control over the collection of unpaid taxes from companies and high-net-worth individuals like Elon Musk.
In fact, one report calculated that the “tax gap” —The difference between taxes owed to the government and those actually paid— amounts to $ 600 million, and could be $ 7 billion in the next decade if the situation is not regularized.
“These unpaid taxes come at a cost to American households and taxpayers who comply, as legislators choose to increase deficits, reduce spending on necessary priorities or increase taxes to compensate for lost revenue, “said the report prepared by the Department of the Treasury.
“The tax gap disproportionately benefits high-income individuals who derive a greater portion of their income from non-work sources where misreporting is common,” the document added.
The reporting requirement, however, it will cause the IRS to receive a mountain of information that would take some time to analyze. Therefore, the idea is that the Department grows in a manageable way (no more than around 10% per year), but also has certain funds to make investments with large fixed costs, such as modernizing information technology, improving analytical approaches of data and hire and train agents dedicated to complex execution activities.
Critics of the current tax system have long sought to implement bills that target extremely wealthy entrepreneurs like Musk and Amazon founder Jeff Bezos, but none had, so far, substantial progress.
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Elon Musk targeted Biden for a proposal to add public employees