Why do American billionaires live tax-free? It’s because they don’t have real money. In fact, they have billions of dollars in store, and the country does not pay taxes on what is not earned.
But what if they did? South Korea is planning to do this. The Netherlands tried to kick again. Some US lawmakers are at odds with their own brands. The target of these taxes is wealth like Elon Musk’s.
He became the first trillionaire on June 12, with most of his wealth built on unsold stock. Move him to Seoul, or change US law, and the bill will be paid. But the important question is how big can it be?
Tax Laws Are Spread Around the World
The the latest flashpoint has been reached in Seoul. This week, lawmakers and labor groups decided to raise unearned profits in stocks and real estate with an income tax.
In NetherlandsThe Lower House of the Dutch Parliament passed the Box 3 Actual Return Act on February 12, taxing annual paper profits on stocks, bonds, and crypto at 36%. The bill is slated to begin in 2028 and still needs to be approved by the Senate.
The retreat was quick. On February 25, the Minister of Finance said that this cannot be done as planned and needs to be changed. The FT report earlier this month that the coalition under Prime Minister Rob Jetten is preparing to round.
US Policymakers Look to the “Buy, Borrow, Die” Manual.
In the United States, Senator Ron Wyden has introduced the Billionaire Tax. The bill, with more than 20 cosponsors, would tax it, like stocks, annually at market value.
“The purpose of this bill is to require billions of people to pay taxes annually by eliminating the ability of high income earners and taxpayers to use tax planning techniques such as ‘buy, borrow, die’ to delay paying taxes forever,” bill they read.
The The bill does not establish a new one tax rate. On the contrary, it changes when the salary is very heavy. Assets sold, such as stocks, can be sold each year and taxed as long-term capital gains.
This means that the current maximum interest rate of up to 23.8% (20% long-term interest rate plus 3.8% gross income tax) applies to every year and not just to the sale.
Currently, capital gains that cannot be sold such as real estate and private businesses can be taxed at the normal capital gains rate and the “deferral recapture” rate, with a total rate of up to 49% of the gain.
Representatives Steve Cohen and Don Beyer introduced their House counterpart, making this the first Congress to have a bicameral Billionaires Income Tax.
In particular, the numbers show a mutual push. In March, Senator Elizabeth Warren he also introduced the Ultra-Millionaire Tax Act.
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Warren’s system imposes an annual tax of 2% on every dollar of value over $50 million. The rate rises to 3% for every dollar worth more than $1 billion (1% surtax on top of 2%).
Separately, California voters will decide on the property tax in a November ballot measure. The California Billionaire Tax Act would impose a single tax rate of 5% on residents with net worth over $1 billion.
The Billionaire Tax Now Coalition has written to Governor Gavin Newsom, indicating it is ready to compromise. The group has said it will return a lower interest rate of 2% instead of the 5% it originally wanted.
The $945 Billion in Tax Cuts Doesn’t Matter
Meanwhile, Musk’s a special treasure has been placed The story of “Tax The Rich” really back. They hit the trillion mark when SpaceX (SPCX) was listed on the Nasdaq on June 12.
A tech selloff then pulled down 24% from his size as of June 16. As of June 26, Forbes estimated his net worth at about $945 billion.
He still leads the grand total, with Larry Page second at about $281.6 billion. The main issue of the tax system is what happens to that economy each year.
Even after the slide, SpaceX manages most of its assets. Musk’s base salary at SpaceX remains $54,080 a year, unchanged from 2019.
However, its share reaches about 4.76 billion shares. According to Bloomberg, it do not include about 1.3 billion 1.3 billion restricted shares unrelated to work and other, as well as 237,530 shares pledged as debt securities.
They also have 350,000 options that you can use. At the current price of around $153, the value is about $728.3 billion.
The June 2026 Form 4 filing puts his Tesla stake at about 11%. That figure leaves 424 million shares restricted for his 2025 CEO award, which vests only if performance and other conditions are met. Musk also owns a stake in his startups, Neuralink and The Boring Company.
Tesla has never paid any dividends, so almost all of its returns are paper appreciation. Current US taxes for sale only. So most of the nearly $945 billion will not be taxed at a higher rate.
The old records show the order. ProPublica report that he paid $455 million on $1.52 billion in income from 2014 to 2018, and no federal income tax in 2018. When measured against the growth of his wealth, ProPublica put his real tax rate at around 3%.
What is clear is that this is a small amount. His assets are assets he has not sold, not money in the bank.
How Much Debt Would Musk Have If Taxes Worked For Him
The answer depends entirely on the type of tax that applies. Income taxes have reached their full value. Taxes on unrealized gains hit only the annual increase.
Start with Warren’s wealth tax, which is applied to his $945 billion. The 2% rate covers the group between $50 million and $1 billion. The 3% rate applies to every dollar over $1 billion. Together, they make about $28.3 billion a year.
Wyden’s bill works the other way around, raising profits instead of wealth. Given the marginal cost, almost all of its assets can be viewed as unrealized profits.
The first year is external. Without an initial signal, the first evaluation gets its full value. At 23.8%, that cap is about $220 billion, which the bill allows him to pay over five years.
After that, the basis is reset, so every year, only the new profit for that year is taxed. An increase of $100 billion would cost about $24 billion. A flat year brings nothing, and low books can backfire.
California’s rate is a single tax, not an annual one. A 5% tax on its value would amount to about $47 billion. A 2% partnership managed by sponsors would still have brought in $19 billion.
The above figures are speculative. Musk lives in Texas, and none of these ideas are the law. They show what each plan would collect if it met its potential.
What That Money Could Do
These funds are easy to understand in terms of global needs. The UN World Food Program estimates that ending hunger in the world by 2030 would cost 93 billion dollars a year. His everything The 2026 plan to feed 110 million people costs $13 billion.
Warren’s taxes on Musk alone, about $28.3 billion a year, would more than double the annual budget. It will also cover about 30% of the annual cost of ending hunger in the world, from one person.
Wyden’s holding of $220 billion for the first year would support the global hunger cause for more than two years. California’s $47 billion will last about half a year.
Bring it home, and the difference works. National Alliance to End Homelessness put his number in 2025.
It also said that about $9.6 billion would be enough to provide the first housing for families who use shelter in the US for one year. Warren’s annual tax on Musk alone could cover that figure with the reserve.
The bill may expire as quickly as it appears
The numbers are fishy, ​​and last month they revealed it. Much of Musk’s wealth is in a category he cannot sell quickly, and its value can move by hundreds of billions in a single day. The stock is already down 24% since June 16.
That instability cuts both ways. Tax on paper profits is collected only when the paper shows a profit. In a lean year, Musk carries forward the unrealized losses on his behalf, doesn’t owe them, and can carry them forward to make good on other years. The same shocks that make big money in one year can wipe out the next.
Liquidity is another limitation. A huge annual bill could force him to sell shares to cover it, but his SpaceX shutdown prevents him from doing so.
The move adds a third. California had already lost billions prematurely, and the Dutch plan raised concerns about immigration.
Currently, there is a difference. It’s true enough to put him first in the world, but not get paid until the day he decides to sell.
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A note What Taxes Will Elon Musk Pay If The US Bill Passes? appeared for the first time BeInCrypto.
