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 $28.7 billion. Sweeney himself currently has a net worth estimated at nearly $8 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 math, he would have to pay $1 billion in taxes for that period, diluting his ownership stake in the company in the process.
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.
Epic Games did not immediately respond to a request for comment.
Whatever happens, Sweeney will remain richer than some small countries, while the federal minimum wage for everyone else remains $7.25 per hour. Exactly where it’s been for over a decade.