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Elon Musk to pay record-breaking $12 billion tax bill
CNBC’s Robert Frank reports on Elon Musk’s tax bill which is the largest in history. Musk will pay a total of $12 billion for 2021. Frank joins ‘Squawk on the Street’ to discuss the details.
Wed, Dec 15 202110:51 AM EST
Donald Trump’s first term began with an unsuccessful attempt to repeal Obamacare. His second term could begin with a successful attempt to expand it.
That’s one possible outcome from a strategy Senate Republicans are attempting to use to pass their budget and spending blueprint. The wonky accounting maneuvers could make it easier to pass a permanent extension of the 2017 Tax Cuts and Jobs Act (TCJA) provisions, but they could also make it easier to pass a permanent extension of enhanced Obamacare subsidies in the process.
DataRepublican (small r)
@DataRepublican
I've had a change of heart on federal income tax. On the surface, it's just a way for the government to generate revenue—it has to get its funding from somewhere. But I now see that the method of taxation itself fundamentally alters the relationship between the government and its people.
When the government relies on taxing individual income, it shifts from serving its citizens to exploiting them as a revenue source. This dynamic creates an inherent friction, where the government no longer answers to the people but to the system that extracts from them. And if you look around, it's clear—whatever our tax dollars are funding, it’s not serving us.
This is what modern economists fail to grasp when they dismiss tariffs, sales taxes, or luxury taxes as harmful. The structure of taxation matters, not just the amount collected. The income tax distorts governance itself—and it needs to go.
Eric Daugherty
@EricLDaugh
The thing about an income tax is that it literally just makes it a pain to succeed.
A consumption tax makes it a pain to consume things you don't need. BIG difference.
In a consumption tax-heavy environment, when people are tight on money, they can simply do what any rational person does: buy less "wants," buy only necessities.
In an INCOME tax-heavy environment, it doesn't matter. You lose a flat 15-30% of your income. It doesn't matter how smart or purposeful you are with your money. The government just swipes it away. Then, it essentially throws it into a black hole.
And the REAL problem, and why the elites DON'T want a system based on tariffs and domestic consumption taxes?
They encourage self sufficiency. You don't pay taxes on potatoes and peppers growing in your garden. You can take steps to eliminate purchases, or the prices of the things you do buy by shopping smartly, thus lowering your taxes, while having more money. Consumption based taxes, taken to their logical end, would mean a government that physically cannot be as bloated as it is now while still remaining even somewhat solvent.
Eric Daugherty
@EricLDaugh
That's why the structure matters. "Punishing" people for buying a bunch of stuff seems much more "fair" than punishing people for... trying to make a living.
And the people who want to min-max their finances can simply spend time and effort minimizing the costs of their purchases, and minimize the quantity of their purchases.
But that would require the presumption Americans have the capability of being smart, rational and self sufficient - not something the elites are interested in entertaining.
As the headline says, whenever a political figure or a leftist claims that "paying taxes is patriotic," you will note that they are about to tell you that you should pay more. This is a fundamental law of the universe, to be known henceforth as Clark's Law of Taxational Patriotism: "When taxation is levied, the claim that paying taxes is an act of patriotism shall invariably be followed by a demand for a higher taxes.". //
The left seems to have this idea that the tax system is a dial they can turn up, that an increase in marginal rates will always return an increase in receipts, and that just isn't so.
The other thing the left doesn't get about taxes is that paying them isn't some noble, patriotic gesture. If it were, we wouldn't have an army of people on the public payroll making sure those taxes are paid. No, taxes are monies confiscated from the people by force of law, and if you doubt that, try not paying your taxes and see how long it takes for the government to send men with guns out looking for you. And if the left really believed that paying taxes was a noble, patriotic gesture, they'd pay more voluntarily. They never do, so there you are.
Taxation is, at best, a necessary evil. //
Government spending is taxation. When you look at this, I've never heard of a poor person spending himself into prosperity; let alone I've never heard of a poor person taxing himself into prosperity.
And no country ever taxed itself into prosperity. Remember that next time you're confronted by some whining leftie claiming that paying taxes is patriotic.
If you are a clergy member or minister, you must:
- Include the rental value of the home you live in, or the housing allowance, if it was provided to you by the church
- Include income you get for working as a minister if you are an employee
Ministers' housing
If the church provided housing to you as part of your minister’s pay, you should include the rental value of the home or housing allowance as part of your earned income from self-employment for the EITC.
The rental value of the home is the money the church would get if they charged you rent.
Since she mentions Social Security, let's start with the obvious. How does an illegal immigrant manage to pay into that program without committing fraud? Social Security numbers are only given to citizens and permanent residents. So is the argument that criminality is fine as long as you contribute taxes along the way? Because that sure seems like the argument. //
In 2024, fiscal outlays totaled around $7 trillion dollars. That means illegal immigrants contribute just 1.43 percent toward total annual expenditures. That already doesn't sound like a lot, but when you consider that illegal immigrants make up 6.25 percent of the population (using the commonly accepted estimate that there are 20 million of them in the country), then their contributions become even more minuscule.
But wait, there's more. That $100 billion number Crockett is citing is actually from a 2022 study conducted by the Institution on Taxation and Economic Policy, and it includes state and local taxes paid as well. So the above percentage I cited is actually much less on the federal level, and when you dig deeper, illegal immigrants only contribute around $25 billion to Social Security. How much does that entitlement cost taxpayers a year? The answer is a whopping $1.7 trillion, meaning illegal immigrants pay for just 1.47 percent of Social Security. That is the supposedly massive, irreplaceable contribution to the program that Crockett and other Democrats are asserting should override immigration laws. //
in 2023, it was estimated that the federal government spent $66 billion on illegal immigrants for medical care and various entitlements like food stamps. That doesn't even count how much it costs to house, clothe, and feed those who are being detained at various Customs and Border Patrol facilities. //
Clare Boothe Lucid
6 hours ago
Let’s just look at education cost. An estimated 620,000 illegal alien children are enrolled in K-12. The average cost is about $18,600 per students (with the ESL and other needs immigrants may cost more, but I’ll use the average). That would be $11.5 Billion per year just for education of the illegal kids. That does not include the anchor babies.
At the heart of this issue is the de minimis provision, which originates from Section 321 of the Tariff Act of 1930. This provision was initially designed to prevent the government from incurring excessive costs and hassles for small imports made by individuals in a single day, as long as the fair retail value of those imports did not exceed $1. Over the years, Congress has raised this threshold multiple times, and it currently stands at $800, making it the most generous de minimis exemption in the world. In contrast, Canada’s de minimis exemption is capped at only $15. //
A congressional report revealed that between fiscal year 2018 and 2021, more than two-thirds of de minimis imports came from China (including mainland and Hong Kong). In 2023 de minimis imports comprised an astonishing 1 billion parcels valued at approximately $54.5 billion, with around $18 billion in shipments originating from China.
The Select Committee on the CCP estimated that two Chinese companies accounted for more than 30 percent of the daily de minimis shipments in the U.S. These companies are Shein, a fast fashion online retailer based in Singapore that sources most of its products from China, and Temu, a China-based e-commerce marketplace offering a wide range of items from cosmetics to knock-off iPods. These companies ship their merchandise directly to American consumers at extremely low prices, utilizing small shipments that are exempted under de minimis provisions.
Graham Allen @GrahamAllen_1
·
This was the greatest interview EVER!
JOE ROGAN: “Did you just float out the idea of getting rid of income taxes and replacing it with tariffs? — Were you serious about that?”
DONALD TRUMP: “Sure, why not?”
8:26 AM · Oct 26, 2024 //
Trump went into American political history to explain why tariffs are a better source of government revenue than a system such as an income tax on citizens. The American Founders agreed.
They debated and soundly rejected a federal income tax system, opting instead in 1789 to institute an ad valorem tariff on “all articles of foreign manufacture” as the sole mechanism for funding the federal government. The Tariff Revenue Act of 1789 was the very first law on the books of the very first Congress. That’s why a constitutional amendment was required in 1913 just to make an income tax system legal in this country. //
The income tax system has fueled a monstrous expansion of federal power and created a military-industrial complex that is insatiable in its quest for control of global resources to keep itself in power. This complex seeks to destroy the last vestiges of our Founding system in favor of a globalist “New World Order” and will destroy or even kill anyone who stands in its way — including Trump.
Tariffs Mind America’s Business
Our founders, by contrast, sought not an empire, but a peaceful commercial republic. Our national purpose was to avoid at all costs foreign entanglements that made us vulnerable to the whims of foreign powers.
The tariff revenue system, they reasoned, achieved that. It also met their two major domestic objectives: 1) it was sufficient to obtain the annual revenue for a very limited but fully functional federal government, and 2) it is by far the least oppressive option for Americans.
Some ideas are like horror movie villains. They’re dangerous, and no matter how many times they’re defeated, they never seem to die.
The misguided idea of taxing unrealized capital gains is back on the scene. Sen. Ron Wyden, D-Ore., floated a proposal to tax unrealized capital gains in 2021.
It was widely debated in 2022, when Congress was considering a multitrillion-dollar tax and spending package.
Opposition from Sen. Joe Manchin, D-W.Va., to taxing income before it’s earned helped defeat the idea then.
But the idea was far from dead. President Joe Biden included a version of the tax in his latest budget.
Vice President Kamala Harris also has endorsed the idea.
The first step in killing a bad idea is to recognize it for the scourge it is.
A realized capital gain—which we currently tax—is the difference between the price you sold an asset for and the price you paid for it. An unrealized gain, on the other hand, is an estimate of what that difference would be if you had sold an asset that you still hold.
The difference between taxing realized capital gains and unrealized gains is the difference between the government taxing people on income they’ve actually received versus the government taxing them on income they might receive later.
It would give the government the first claim on income, taking a big slice before the supposed owner of the asset ever sees a penny.
In effect, it would turn property owners into property renters, with Uncle Sam as their landlord. //
If you bought a house for $300,000, and the value rose to $500,000 a couple years later, you could be stuck paying tax on the $200,000 of gain even as you’re struggling to make mortgage payments. At a 25% tax rate, it would cost you $50,000 in federal taxes.
It would be like having a second mortgage, but in some ways worse.
At least mortgage payments end after 30 years. But you would never finish paying off your unrealized capital gains tax payments, as long as you owned the asset and its value was increasing—even if that increase was only from inflation.
And unlike mortgages, which give homeowners clearly defined payment terms, unrealized capital gains tax payments would be unpredictable, rising or falling depending on the housing market, inflation, and subjective assessments of a house’s value. //
Those in Washington who propose taxing unrealized capital gains generally include broad exemptions for certain asset classes and based on income or asset thresholds. These exceptions would give investors a path to escape from the tax, which is better than the alternative. The tax would have fewer direct victims as a result.
But the tax-induced capital flows still would wreak economic havoc—and without managing to raise much government revenue. So, the new tax would do little to satiate lawmakers’ appetite for more tax dollars.
And once a horror movie villain—or a bad idea—gets a foot in the door, it quickly can swing the door open wide and claim more victims. When the income tax was first implemented in 1913, it applied to less than 1% of the population, and most of those who paid it paid only a 1% rate. That small initial income tax spawned something far worse and more widespread over time.
Allowing the government to tax income that doesn’t exist sets an even more dangerous precedent.
First, "fair share," as defined by whom? Rhetorical question — the Democrat Party, of course. Second, the Democrat Party is incapable of reaching peak wealth redistribution. The left will never reach a point where it believes it is finally robbing a sufficient amount of money from the wealthy to redistribute to the poor.
Never mind that the top 1 percent of earners already pay 45.8 percent of federal income taxes, and the top 50 percent of all taxpayers pay 97.7 percent, while the bottom 50 percent pay the remaining 2.3 percent. https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2024/
"Fair share"? Seems to me that the bottom 50 percent of earners need to pay their fair share. //
While the left continues to preach the zero-sum-game mentality, or a "scarcity mindset"; the belief that there are limited resources, so if someone else has something you want, you believe there is less of it for you, conservatives subscribe to an "abundance mentality" — the belief that there is enough wealth, resources, and success in the world for anyone who works to achieve their goals.
Henry Ford famously wrote an autobiography, "My Life & Work":
As long as we look to legislation to cure poverty or to abolish special privilege, we are going to see poverty spread and special privilege grow.
If exposing money behind Arabella-aligned organizations is the price for outing conservative donors, that’s a trade Democrat operatives would gladly make. //
All of this raises a question: If “dark money” is so beneficial to Democrats, why do the party’s leaders consistently push for new and expansive donor disclosure laws?
The answer may be simple: Even when the left outspends the right, the value of silencing conservatives far exceeds the value of spending by left-leaning nonprofits. //
By establishing nonprofit donor databases, the DISCLOSE Act would open the door for Democrats to potentially create target lists of conservative donors and businesses to harass and bully into silence. As Senate Majority Leader Chuck Schumer infamously put it years ago, the “deterrent effect” of disclosure “should not be underestimated.” //
Even if some left-leaning donors are exposed, leftist ideas would still receive enormous platforms in the media, entertainment industry, academia, and government bodies. Conservatives, despite being outspent by the left in recent election cycles, are uniquely dependent on their donors and nonprofits to support their intellectuals and promote their ideas; disclosure mandates would be akin to declaring open season on these conservative institutions.
The Supreme Court ruled Thursday that a part of President Trump's 2017 'Tax Cuts and Jobs Act' that levied a tax on capital appreciation is constitutional. Justice Brett Kavanaugh wrote the majority opinion. Justices Clarence Thomas and Neil Gorsuch dissented.
The court ruled 7-2 that the mandatory repatriation tax, or MRT, is constitutional under the taxation regimes defined in Article I and the 16th Amendment. In short, the MRT imposed a one-time requirement for US citizens and companies to repatriate money held overseas. //
The Moores had earned $0 from their investment, but the value of their investment had increased because the business they invested in was successful. Because their investment was successful, that unrealized gain, which could totally disappear in a few months if things went pear-shaped, was taxed.
Why is this important?
The lodestar of the far left is "income inequality." They want everyone to be poor but them. Where their policies are defeated is by frugality and investment. //
The wealth tax's strategy is to prevent the accumulation of intergenerational wealth and penalize those who work hard, save, and invest in favor of those who consume. Every time your stock portfolio or home increases in value, a wealth tax would make that gain taxable, even if you didn't cash out. //
FreeWilledThinker
an hour ago
I just read the opinion and, even though I am a Constitutionalist and favor strict construction, I would have voted with the majority on this one. The reason why is due to the pass-through nature of the company. Every LLC in the U.S. works this way, where you get a K-1 and get taxed, even where not a cent has come into your bank account.
I think the muddy water comes from the ownership mechanism. As a shareholder, the Moore's wish to treat the pass-through as though it is not taxable on the owned company's income, but it would be were it based in the U.S. and did not pay any tax on the base income. //
Buckeye kamief
18 minutes ago
But that interest would be taxable if NOT in an IRA -- which is the crux of this. These folks were catching gains on a foreign corporation NOT in an IRA, yet because of reinvestment, they weren't paying any taxes. Compare to US tax code in existence -- if you have a stock and it's in a dividend re-investment program, which is effectively exactly what they were doing, you DO PAY TAXES on those dividends, even though you chose to re-invest. That's another reason I agree with the USSC on this one. Their Indian corporation was making money, but not calling it a "dividend", and they kept putting it back in....sorry that's basically tax evasion by US code.
First: Eliminate withholding. Everyone, every quarter, has to send money to the IRS. Everyone gets their entire paycheck and then has to pay up. The withholding system is too painless; most people scarcely glance at their paycheck stub, and if everyone were required to write a check for quarterly estimated taxes and send it to the various levels of government, I'd wager a substantial sum that they would suddenly become a lot more interested in what government does with their money.
Second: Eliminate “progressive” taxation. Implement a single-rate flat tax with no exemptions or deductions for individuals. Everyone pays something. I’d be willing to consider exempting the first, oh, $40k from taxation, if that’s what it took to get it done – in return, I’d want major welfare reform, to include lifetime limits and severe restrictions on how public aid is delivered – no more open-ended debit cards.
Third: How about eliminating the capital gains tax next? You want people to invest their hard-earned in business ventures, then stop double-taxing them on income earned from money they already paid taxes on once. Want businesses to start bringing capital back from overseas? Eliminate the capital repatriation penalty. Both of those taxes are well to the left of stupid if economic growth is on the agenda, but these taxes were sold by the “We’ll soak those rich guys” school of political campaigning.
Warren, along with leftist Democrat Reps. Pramila Jayapal (WA) and Brendan F. Boyle (PA), have reintroduced the Ultra-Millionaire Tax, which would impose a wealth tax and captivity tax ("exit tax"), and would also allot $100 billion for increasing tax audits on the the wealthy.
As law professor, author, and political commentator Jonathan Turley called it in a Wednesday column, an "Eat the Rich" plan. As you might imagine, Turley isn't a fan of a wealth tax — and that's just the beginning.
The wealth tax is back. We have previously discussed the constitutional and policy concerns surrounding the push by Democrats like Sen. Elizabeth Warren (D., Mass.) to introduce a wealth tax that would start with billionaires. It would not likely end there. //
It is worth noting that the top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.” The top 50 percent of all taxpayers paid 97.7 percent federal income taxes,. The bottom 50 percent paid the only 2.3 percent.
Even more stark, in 2021, the bottom half of taxpayers earned 10.4 percent of total adjusted gross income and paid 2.3 percent of all federal individual income taxes, while the top 1 percent earned 26.3 percent of total AGI and paid 45.8 percent of all federal income taxes.
IBM Vice Chair and former Trump economic advisor Gary Cohn slam-dunked Biden's claim, and he brought the receipts.
"If you actually look at who pays taxes in this country, the bottom 50% of earners in the United States pay 2.3% of tax collected, and the top 10% pays over 70% of tax collected in this country," Cohn said, adding that this is in large part thanks to how the Trump administration redid the tax code in 2017.
Cohn then identified a problem with Biden's talking point about billionaires, noting that a billionaire is a measure of net worth, not a description of one's taxable income. //
Cohn went on to clarify the difference between wealth and income:
"We do a very good job in this country of taxing income," he said. "There is no income in this country, unless you buy a tax-free bond, that doesn't get taxed at a minimum of 20%, whether it's interest or dividends or capital gains. So, there's no billionaire in this country that has income that is not paying at least 20%." //
a person may hold wealth - say, in the form of a family farm that has no paper on it but may be worth several million dollars - without seeing any income from the mere existence of that asset. Taxing a person on that basis would be ruinous for that person and for the economy. //
MCPR
4 hours ago
Republicans and economists have been “fact checking” the Democrats on this since LBJ, but it doesn’t do any good. When it comes to worldly wealth, everyone who has less than another is jealous. Thinking people can overcome this and use logic to decide on reasonable policies. The rest vote on emotion. Sounds good, doesn’t it? Robin Hood gonna give me all their money! Emotional people don’t see the world is filled with people who have less than they, and when Robin Hood comes around, it’s gonna be them that lose.
Keep “fact-checking” and keep losing. Reduce taxes and win.
We don’t have a revenue problem, we have a spending problem. Until the craven Republicans in Congress can get together and CUT spending (not rate-of-increase) we are going to lose to jealousy, every time. //
anon-201n
4 hours ago
Remember, Joe Biden is absolutely brilliant - was in the top of his law class - 76 out of 85 - so it must have been at the top of a page with 25 in a column! I would rank his financial acumen less than that of a 10 year old so that's the reason why the whole Biden family had to be involved in its (illegal) financial dealings, with 10% for the big guy.
Taxing assets is, at present, constitutionally illegal but raises all sorts of questions. If assets decrease in a year, are the tax levies given back (fat chance)? As Reagan said, we don't have a revenue problem but a spending problem. Until federal spending is addressed, pressures to increase taxes will persist.
Here’s the funny thing: Biden’s 8 percent estimate is derived from that same tax data on the top 400 taxpayers. So what’s going on? The president is describing a tax system that he wishes existed — not the system in place.
As Kessler noted, under the 16th Amendment of the Constitution, ratified in 1913, “Congress shall have power to lay and collect taxes on income, from whatever source derived.” //
Biden and the Democrats dishonestly use a definition of income, to Kessler's previous point, that they wish existed, vs. the definition that does exist, per federal tax legislation and the IRS. //
Note that unrealized capital appreciation is not included in the above definition of income. //
Here's more from Kessler:
In 2021, two White House economists — Greg Leiserson of the Council of Economic Advisers and Danny Yagan of the Office of Management and Budget — published a blog post that estimated what the tax rate would be for the 400 wealthiest households if unrealized capital gains were considered part of income. ... The report estimated that these households had an average federal individual income tax rate of 8.2 percent for the 2010-2018 period.
The steep run-up in stock prices in recent years has meant the wealth of super-wealthy Americans has risen significantly, even if they never sell stock that would trigger a tax liability. In fact, when interest rates were low, it was more cost-effective for a billionaire to borrow money against the value of those shares than sell them. The White House economists estimated what the tax rate would be if that income — now not subject to taxation — were included on their tax returns.
Tax his land, tax his wage,
Tax his bed in which he lays.
Tax his tractor, tax his mule,
Teach him taxes is the rule.
Tax his cow, tax his goat,
Tax his pants, tax his coat.
Tax his ties, tax his shirts,
Tax his work, tax his dirt.
Tax his chew, tax his smoke,
Teach him taxes are no joke.
Tax his car, tax his grass,
Tax the roads he must pass.
Tax his food, tax his drink,
Tax him if he tries to think.
Tax his sodas, tax his beers,
If he cries, tax his tears.
Tax his bills, tax his gas,
Tax his notes, tax his cash.
Tax him good and let him know
That after taxes, he has no dough.
If he hollers, tax him more,
Tax him until he’s good and sore.
Tax his coffin, tax his grave,
Tax the sod in which he lays.
Put these words upon his tomb,
“Taxes drove me to my doom!”
And when he’s gone, we won’t relax,
We’ll still be after the inheritance tax.
The current federal income tax system is clearly broken — unfair, overly complex, and almost impossible for most Americans to understand. But there is a reasonable, nonpartisan alternative before Congress that is both fair and easy to understand. A system that allows you to keep your whole paycheck and only pay taxes on what you spend.
The FairTax is a national sales tax that treats every person equally and allows American businesses to thrive, while generating the same tax revenue as the current four-million-word-plus tax code. Under the FairTax, every person living in the United States pays a sales tax on purchases of new goods and services, excluding necessities due to the prebate. The FairTax rate after necessities is 23% compared to combining the 15% income tax bracket with the 7.65% of employee payroll taxes under the current system -- both of which will be eliminated!
Important to note: the FairTax is the only tax plan currently being proposed that includes the removal of the payroll tax.
Keep Your Paycheck
For the first time in recent history, American workers will get to keep every dime they earn; including what would have been paid in federal income taxes and payroll taxes. You will get an instant raise in your pay!
Social Security & Medicare Funding
Benefits will not change. The FairTax actually puts these programs on a more solid funding foundation. Instead of being funded by taxes on workers’ wages, which is a small pool, they’ll be funded by taxes on overall consumption by all residents.
Get a Tax Refund in Advance on Purchases of Basic Necessities
The FairTax provides a progressive program called a prebate. This gives every legal resident household an “advance refund” at the beginning of each month so that purchases made up to the poverty level are tax-free. The prebate prevents an unfair burden on low-income families.
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