What comes to mind when you hear the name Elon Musk? Entrepreneur? Tesla automobiles? SpaceX rockets?
After Time Magazine named him “person of the year,” the South African billionaire was called a rather interesting name by a well-known US Senator.
Elizabeth Warren, a democrat from Massachusetts, called him a “freeloader.” Actually, it was a little more disparaging than that.
“Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” said Warren.
This likely caught Musk by surprise, who responded that Warren should note that “I will pay more taxes than any American in history this year.”
Musk later revealed his tax bill will amount to some 11 billion dollars.
$11,000,000,000? It does make one wonder how that might be considered “freeloading” off other taxpayers.
But it’s in your perspective. If you were to poll a majority of Americans and ask if they think “the rich are paying their fair share” of the tax burden, you’d likely get a majority who say they are not.
In part, this would be driven by the narrative we hear from the media and from politicians seeking votes. It would also be driven by shear envy of those with more money.
But it’s also a perspective that’s not really grounded in reality. I would wager most Americans have not seen details of who pays what share of the federal tax burden.
Here’s a breakdown, courtesy of the IRS and The Heritage Foundation:
- The top 1% of income earners pays approx. 40% of all federal taxes.
- The top 5% pays about 60% of the bill.
- The top 50% pays 97% of the tab.
- The bottom 50% pays only 3%.
That is a staggering amount paid by the upper class. You could argue that because they have more money than middle and lower income households they should be expected to pay a bigger percentage. But I don’t think it’s reasonable to say they don’t pay “their fair share.” Or to accuse them of not paying anything. Or of “freeloading.”
The irony of Warren’s statement was not lost on Musk, who pointed out that her salary is paid entirely by taxpayers.
To make it worse, Warren responded to Musk’s comments by running social media ads targeting his “freeloading” and simultaneously asking for donations to herself and her political causes.
To say it’s ironic is quite an understatement. And probably generous.
Before you get taken in by statements and soundbites meant to invoke an emotional reaction, what if you instead stopped and looked into it first? It may look different once you do.