Democrats are working to garner enough votes to pass Biden’s Build Back Better agenda, and believe Americans will be prepared to see the nation’s richest pay more in taxes.
Epic Games founder and CEO Tim Sweeney warned Wednesday that Democrats’ proposal that would tax billionaires on unrealized capital gains would hurt entrepreneurs.
“This tax bill will eliminate founder control of many independent companies – probably including Epic Games,” the billionaire tweeted.
He said the bill would tax “theoretical gains” based on an increase in the company’s market value, as opposed to “all American history,” where capital gains when an individual sold stock were taxed.
The proposal was drafted as a compromise by Senate Finance Committee Chairman Ron Wyden, D-Ore.
Billionaires may be suffocated on arrival of tax proposal
“Every time a company doubles in value, the government forces founders like me to sell their 25% stake to pay the government,” Sweeney said. “Epic has doubled in value 8 times in the last 5 years. Had this tax plan been in place, I would have been forced to liquidate almost all of my ownership.”
He called the bill “particularly terrible” for entrepreneurs because he said it does not apply to shares held by hedge funds or corporate investors such as Tencent and Sony, only “individual founders who hold shares individually.”
Sweeney said, “If the government forces the founders to sell off to pay taxes on the theoretical profits as companies grow, they will lose control of private institutions such as Epic Games to hedge funds and foreign investors.” handing over.” “It’s the perfect way to deprive American companies of vision and leadership.”
He argued that Democrats did not need a “plan” to help pay for their multitrillion-dollar reconciliation package, claiming there is already an “effective progressive tax system”. “If tax revenue is too low, only raise the top tax bracket.”
He said his current capital gains tax is less than 50% and argued that if it is raised to a “painfully high” 75% then at least it will not hurt entrepreneurs.
Widen said Under the proposal this week, the country’s 700 rich will be forced to pay unrealized gains from their wealth. The proposal also calls for a 15% corporate minimum tax on the country’s most profitable corporations.
The tax will begin to be implemented in 2022. Those affected would have owned more than $1 billion in assets or $100 million per year for three straight years.
Democrats are working to garner enough votes to pass Biden’s Build Back Better agenda, and believe Americans would be willing to pay more in taxes to the nation’s richest, such as Elon Musk and Jeff Bezos. Many billionaires have seen their fortunes rise significantly after the outbreak of COVID-19 while many Americans are struggling.
Musk also denounced the proposal on Twitter on Monday, suggesting that the tax would eventually reach the middle class.
“Eventually, they run out of other people’s money and then they come for you,” he wrote.
Granthshala Business’ Edmund DeMarche contributed to this report.