Sen. Warren Commends Biden for Billionaire's Tax, Calls for CEO Pay Reform Sen. Elizabeth Warren, D-Mass., attends a Senate Armed Services hearing on March 15, 2022. (Drew Angerer/Getty Images)
By Nicole Wells | Wednesday, 30 March 2022 10:58 AM
Sen. Elizabeth Warren on Tuesday commended President Joe Biden's effort to increase income taxes on the nation's highest earners and called for reform in the way corporate executives are compensated.
The Massachusetts Democrat said the president's proposal requiring households making more than $100 million pay a 20% tax on their income is a necessary fix for a "broken" tax system.
"What Democrats are saying is that we've got a plan to try to raise taxes on the millionaires and billionaires, the people at the top who aren't even paying taxes at the same rate as everyone else," Warren told CNBC's "Squawk Box."
Raising taxes on the richest Americans would help fund expensive government projects, such as Biden's infrastructure bill and tax credits for green energy projects, she said.
Using Elon Musk and Tesla as an example, Warren said both Musk and his company are reaping the benefits of public support.
"I'm happy to celebrate success," the progressive senator said. "But let's remember: Elon Musk didn't make it on his own. He got huge investments from the government, from taxpayers."
To encourage auto manufacturers to boost their electric car production, former President Barack Obama introduced $2.4 billion in funding in 2009, with a $7,500 tax credit that buyers could use to offset the steeper electric vehicle purchase price.
The tax credit for electric vehicle manufacturers has since been phased out for Tesla buyers, according to CNBC; however, a number of analysts believe the program helped jump-start Tesla's growth in its early days.
Warren also criticized on Tuesday the corporate policy of rewarding CEOs with stock or investors with buybacks.
The ways in which executives are paid has changed significantly in the last 50 years, CNBC reports, with stock options and awards now making up the majority of executive pay at many companies.
Stock awards have become approximately 50% of all CEO compensation, according to analysis from the Economic Policy Institute, a liberal-leaning think tank.
Released earlier this week, Biden's proposed budget shows the president supports legislation that would mandate executives hold company shares for "several" years and prohibit them from selling equity following a corporate buyback.
"We saw the move to executives being paid in stock when there was actually an effort to put a cap on what executives get paid," Warren said. "There was a sense at the time that executive pay was just out of control and had gone so far beyond what ordinary workers were making.
"But moving over to getting paid in stock has obviously blown entirely through that rationalization."