By Tom Winnifrith | Thursday 13 April 2023
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
But back to Avaaz which claims:
“It’s outrageous: Elon Musk paid a tax rate of about 3% while a rice trader in Uganda paid 40%. Inequality is literally killing us -- and it's time for leaders to take action. President Biden has just announced a plan to tax billionaires -- and G20 leaders could take it global! Add your name to the call for the mega-rich to pay what they owe. Once it’s massive, we’ll deliver our voices to leaders ahead of the G20 summit.
While Elon Musk paid a true tax rate of about 3% for years, a rice trader in Uganda paid 40%. She makes US$80 each month -- and Musk is worth US$180 BILLION.
There is one clear way to help address this gap -- we must Tax the Rich. And now is our chance. US President Biden just called for a historic tax on billionaires, and with enough public pressure, he could champion the idea at an upcoming meeting of world leaders.
A wealth tax of up to 5% on the ultra-rich could raise enough money to lift 2 billion people out of poverty! Let’s gather one million voices demanding G20 governments tax the rich now -- add your name, and Avaaz will deliver our call ahead of the summit, where world leaders can’t miss it!”
Ends
Let’s start with Musk’s supposed tax rate. Right at the bottom in small print we discover it refers to his total tax paid divided by his salary and the increased in the value of his Tesla shares between 2014 and 2018.
You might note that Tesla shares were $235 on December 31 2020 and are now $186. So Musk’s tax rate in 2021 and 2022 will in fact have been well over 100%.
The answer to removing folks from poverty ( which natch Avaaz defines in relative not absolute terms) is not socialism but capitalism. Only if the state steals more money via a wealth tax will you reduce the level of relative poverty but it will not help the absolute poverty of Ugandan rice pickers at all. If states try to steal 5% of the wealth folks have accumulated by risking their capital as entrepreneurs each year, they will simply move their assets and themselves to other places. It will not work and in discouraging entrepreneurs it will harm the poor.
The way to help the Ugandan rice trader in absolute terms is for her corrupt Government to cut the onerous taxes she pays. As it happens that 40% number is a complete lie too. You only pay tax at 40% in Uganda on earnings over $32,000 a year. If the rice trader was earning $80 a month (9860 a year) she would pay 0% tax on the first $753 and 10% tax on the remaining $207 so her effective tax rate in 2022, was in fact, 2.2% while Musk’s using the crazy metrics of Avaaz was more than 100%.
Avaaz is truly shameless yet its highly paid employees just tell outright lies as they solicit donations to continue their hateful works. I do hope Mr Musk’s fact checkers at twitter are having a good look at this and branding Avaaz as fake news.
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