Elizabeth Warren proposes Elon Musk pay more taxes for gov’t efficiency

Senator Elizabeth Warren penned an open letter to the Department of Government Efficiency (DOGE) Chair, Elon Musk, proposing ways the federal government could cut wasteful spending.

According to the Jan. 23 letter, Warren proposed fully funding the Internal Revenue Service (IRS), closing the carried interest loophole, and adding a capital gains tax on estates.

The wealthy appear to be the targets of Warren’s IRS proposal, as that socioeconomic group is mentioned four times in the brief four-paragraph section titled “Cutting Waste and Abuse in the Federal Tax Code.” With a net worth of $436 billion, Musk certainly falls into that category.

Senator Warren voiced strong concerns about the DOGE process and its policies, particularly regarding potential conflicts of interest among its leadership.

”[…] it is not clear that you and other DOGE leaders are able to identify and mitigate your conflicts of interest and adhere to common-sense ethics standards.8 As a result, the committee appears to be a venue for corruption […].”

The Senator also called for changes to the tax code, arguing that closing certain exemptions could increase government revenue. In her letter, she points out that increases to the estate tax exemption have reduced the number of taxable estates.

She cites estimates suggesting that without past exemptions introduced by Presidents George W. Bush and Donald Trump, federal estate tax revenue in 2019 could have been up to nine times higher.

”The tax expenditures arising from the exclusion of capital gains on assets transferred at death totaled about $39 billion in 2019. DOGE should end this stepped-up basis for assets transferred at death, saving over $60 billion per year going forward,” Warren said.

Related: Can the law keep up with Musk and DOGE?

Warren and Musk would make unlikely allies

Residing on different ends of the political spectrum, Senator Warren and Musk would make unlikely allies for perhaps any project, including cutting government spending.

Senator Warren has urged President Trump to fully fund the IRS, arguing that it aligns with DOGE’s goals of improving government efficiency and protecting taxpayers.

“[…] it would allow the government to catch wealthy tax cheats that avoid paying their fair share and provide better service for millions of taxpayers that are owed refunds or need help with their taxes. Fully funding the IRS would lead to a 12:1 return on investment.”

However, President Donald Trump and Musk may have other plans for the IRS. On his first day of office, President Trump signed an executive order issuing a 90-day hiring freeze across all government agencies.

In addition, Musk initially set a bold target of cutting $2 trillion in government spending but has since tempered expectations, admitting it may be unrealistic. Recently, he described $2 trillion as an ideal scenario but acknowledged that even aiming for that figure could ultimately result in $1 trillion in cuts.

It doesn’t help that, according to the fiscal data from the US Treasury, two-thirds of government spending is considered mandatory. This includes Medicare and Social Security payments, which account for more than half of spending.

Related: Trump signs executive order for working group on crypto