Twitter's owner has shot down the US president's assertion that billionaires pay only 3% of their earnings to the government
America's richest man on Saturday took issue with President Joe Biden's effort to sell voters on tax increases by claiming that billionaires get away with paying only 3% of their earnings, on average, to the federal government.
Tesla CEO Elon Musk pushed back after Biden posted a Twitter message arguing that the mega-rich aren't paying their fair share of taxes. "You know the average tax billionaires pay?" Biden asked, before answering the question himself with his 3% claim. "No billionaire should be paying a lower tax than somebody working as a schoolteacher or a firefighter."
Musk replied, "I paid 53% taxes on my Tesla stock options (40% federal and 13% state), so I must be lifting the average! I also paid more income tax than anyone ever in the history of Earth for 2021 and will do that again in 2022." He then invited Twitter users in the platform's Community Notes program to weigh in on whether the 3% figure was accurate.
Biden has repeatedly made the claim while promoting his effort to raise taxes on high-income Americans. When he made the same statement in a speech last month, PolitiFact pointed out that it was false. "Under today's laws, the 25 highest-earning billionaires paid an average tax rate of 16%," the fact-checking outlet said. The group added that most teachers and firefighters fall within an income range with effective tax rates of zero to 15%.
Biden's 2024 budget proposal calls for raising tax rates on individuals with earnings of more than $400,000 a year and married couples making over $450,000. He also has demanded a 25% minimum tax on Americans with fortunes exceeding $100 million.
"Look, I think you should be able to be a billionaire if you can earn it, but just pay your fair share," Biden said. "I think you ought to pay a minimum tax of 25%. It's about basic fairness."
Musk countered, "I certainly agree that everyone should pay taxes and not engage in elaborate tax-avoidance schemes." Such schemes aren't necessary for low-income Americans because more than 40% of US households pay no federal income tax.