Fortnite Boss Slams Billionaire Tax He Doesn’t Seem To Fully Understand

Fortnite Boss Slams Billionaire Tax He Doesn’t Seem To Fully Understand
Image: Epic Games

Surprise, surprise, Epic Games founder, Tim Sweeney, is not a fan of the new billionaire tax being proposed in Congress at the moment. The CEO of the company, which prints money thanks to Fortnite, said the tax would possibly “end founder control” of Epic Games, calling into question whether he even knows what the proposed bill would do.

In a long tweet thread posted yesterday evening, Sweeney made the case against The Billionaires Tax, which would aim to make rich people like himself pay the government money whenever their assets go up in value. Lots of the richest people pay almost no taxes, thanks to being able to borrow cheaply against their equity in a company like Amazon or Tesla. Sweeney, seemingly not equipped with any of the facts, argued that closing this loophole would hurt entrepreneurs like himself.

“Every time a company’s value doubles, the government would force founders like me to sell 25% of our stake to pay the government,” Sweeny inaccurately claimed. “Epic’s value has doubled 8 times in the past 5 years. If this tax scheme had been place [sic], I’d have been forced to liquidate nearly my entire ownership.”

Epic Games, which Sweeney founded in 1991, is currently valued at over $US28.7 billion ($38 billion AUD). Sweeney himself currently has a net worth estimated at nearly $US8 (A$11) billion, according to Forbes, which claims it close-to-doubled over the previous year, as Epic Games announced new rounds of investor funding. By Sweeney’s peculiar maths, he would have to pay $1 billion in taxes for that period, diluting his ownership stake in the company in the process.

Read More: Epic Games Faces Staff Uproar Over Ending Popular Time-Off Policy.

We can debate how many crocodile tears to shed for the small fortunes people like Sweeney, Elon Musk, and Jeff Bezos would lose under a billionaires tax, but it’s important to first set the record straight about how the actual billionaires tax — currently being discussed in Congress — would work.

Proposed by Senator Ron Wyden, Democrat of Oregon, billionaire’s income tax contains special carve-outs specifically for people like Tim Sweeney. While tradable assets like stocks would be taxed when they went up in value, non-tradable assets like, say, equity in a private video game company, would only be taxed when sold-off. There is even a provision to allow billionaires to set aside literally one billion of their wealth as non-taxable under the plan.

Instead of this plan, which is being proposed in part because billionaires have gotten even more obscenely rich over the last decade, including throughout the pandemic, Sweeney suggests that Congress should just raise the existing progressive income and capital gains taxes. Not a bad idea! Unfortunately, the whole reason Democrats are pushing the billionaire tax so hard is because every Republican, plus Kyrsten Sinema, Democrat Senator of Arizona, is against increasing taxes on anyone else.

Whatever happens, Sweeney will remain richer than some small countries, while the federal minimum wage for everyone else remains US$7.50 per hour. Exactly where it’s been for over a decade.

Comments

  • Ah the great savior Tim!!!

    After saving us all from the terrible Apple. He now lead his flock against the evils of this targeted tax on the richest of all Americans.

    Thanks be for Tim ????

  • Ethan supports new tax he doesnt seem to fully understand.

    A tax on unrealized capital gains is colossally stupid and nothing but an attempt by the Biden government to pay for its colossal spending.

    Say Epic games stock price goes up meaning they have to pay tax? What happens when it goes down the next week? Does the government refund them that tax? There are plenty of other ways to increase taxes on the wealthy, a tax on unrealized capital gains is not it.

    If the US government wants some money cut the military spending. Problem solved.

    • Taxing shareholdings is no different from taxing property. Every council rates bill is calculated on a set percentage of your property’s worth. If your property goes down in value next year, no, you don’t get a refund.

      The difference between the proposed billionaires tax and your rates bill is that the billionaires tax is calculated only off of the increase in asset value, not on the total amount, but at the end of the day it literally couldn’t be any simpler.

      People pay their rates for the most part out of other income, they don’t need to sell the house to pay for it. If, however, for some reason your hypothetical billionaire doesn’t have a few spare million in cash and bonds left lying around, first they need to get a better accountant, and after that, that’s what shares are actually FOR; that’s why they split them up into tens of thousands of individual shares that can be flicked on for quick cash in lots of a few dozen, or a few hundred thousand, to pay for bills or things you want along the way.

      Selling sub-parcels of shares is exactly the same process that your average billionaire uses to pay for their ski chalet in Aspen, and the second in St Moritz, and the Gulfstream G550 to fly them between the two.

      All that the questions in your third paragraph demonstrate is how little effort you’ve put into researching the topic, not that you’re more brilliant than the chairperson of the United States Senate Finance Committee, despite all his available resources, support staff and the public servants at his disposal to help him work through such issues.

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