This Age of Trillionaires
What we should do about it
How are you feeling about Elon Musk becoming a trillionaire?
Do you wonder how a rocket ship company can be worth $2.02 trillion when it lost $4.94 billion last year?
Are you aware of how exactly Elon scammed his way to becoming a trillionaire?
It was surprisingly simply and unsurprisingly evil:
He convinced the Nasdaq (a tech stock exchange) to waive important requirements that apply to every other company (fast-tracking, getting rid of the minimum float requirement, changing the index weighting, no track record of profitability.)
Because index funds and ETFs that passively track the Nasdaq-100 must buy shares to match the index composition and weights, and SpaceX is now part of the Nasdaq-100, but by having so few public shares available, Musk concentrated the buying pressure and inflated the index weighting, effectively forced millions of pensioners to buy massively overpriced stock. If you have a retirement account in the US/Canada/UK, there’s a 99% certainty you just got screwed by the world’s first trillionaire.
As a Christian, I hate this crap.
The lack of integrity of this sort of dishonest financial engineering is morally evil.
But for now, let’s reluctantly set aside the fact that Elon Musk became a trillionaire by forcing unknowing old people to exorbitantly overpay for microscopic slices of his rocket company.
Let’s go deeper.
Millions of trillionaire sycophants say, “Yeah, but it’s just paper net worth, it only becomes real when he sells his stock.”
This is a nonsense lie.
Because he won’t sell his stock, ever.
It’s called BUY BORROW DIE.
Every billionaire does it.
They buy assets that increase in value over time.
They borrow for dirt cheap against those assets.
They die having never paid a penny of income tax, dividends tax, and capital gains tax in their entire lifetime.
Think about it: If you can borrow lifestyle cash at 5%, but your stocks are going up by 10%, you’d be crazy to claim income and pay income tax. So long as debt stays cheaper than your increase in share value, you can borrow an unlimited amount of money to upgrade your lifestyle, buy more stock, wash, rinse, repeat.
Don’t worry, it gets worse: Bankers simply print that money to lend to the billionaire out of thin air, inflating the money supply, which makes your money worth less and your cost of living go up.
The world’s first trillionaire just robbed you again!
More than half of all American billionaire wealth is now permanently held hostage as unrealized gains…totally untaxable by the public… yet billionaires can borrow cheaply against their wealth to fund their absurdly lavish lifestyles and weaponize their wealth to amass ever more power and control of the global economy. If we don’t stop them, they’ll own the whole world within our lifetime.
Elon knows the billionaire tax evasion scheme well:
At one point he had at least 88 million shares pledged as collateral on personal debts.
Elon also knows that we know about the billionaire tax evasion scam:
(By the way, the fix for the billionaire borrow-instead-of-pay-taxes scam is well-known and super-simple: Either don’t let billionaires borrow again stock, or if a billionaire borrows against stock, it triggers income tax at 50% of the current stock price, treating it like a partial distribution.)
Millions of trillionaire sycophants say, “Elon deserves to be a trillionaire.”
Does he, though?
Like, really?
Sure, he’s smart, but that’s God-given, not self-generated.
Sure, he works hard and long and smart, but not one million times harder or longer or smarter.
While millions of workers in the U.S. toil for a minimum wage of $7.25/hour, there are CEOs in America that make over $100 million per year — over 6,000 years of minimum wage work. The average CEO-to-worker pay for large firms is nearly 300 to 1. (To be clear, CEOs don’t work 300 times more hours or expend 300 times more calories of effort. As empirical studies have proven, they don’t even produce 300 times more value for shareholders.)
Musk didn’t even start Paypal, Tesla, or SpaceX.
Shareholder capitalism would have you and the rest of humanity believe whoever is paid the most money surely must have contributed the most value to society. This is obviously a lie. The richest people alive are not centabillionaires and trillionaires because they did more work, but because they monopolized more assets.
No shareholder billionaire has ever earned their fortune and there’s a simple way to test this:
How large would Elon Musk’s net worth be without the hundreds of thousands of suppliers and workers who made Tesla and SpaceX what they are today?
None of us would’ve ever heard of Elon Musk.
What’s really neat? If none of Musk’s sprawling globalist multinational corporations ever existed, all of these workers would still have jobs. With no massive monopolies killing competition and evading taxation, many workers would be receiving more pay and much better working conditions.
If no workers worked for centa-billionaire Jeff Bezos, what would his net worth be? Zilch. But would authors, publishers, and booksellers cease to exist? Obviously not.
Each worker is an entrepreneur who creates their own job. If a shareholder couldn’t extract a profit off a worker, they would never hire workers. Workers create their own jobs by creating new usable value for society. The only reason shareholders are able to extract a profit off the work of others is the monopolization of God’s free natural resources. Shareholder profits… including trillionaire profits… are the ultimate inefficiency and the ultimate economic corruption.
“Tax the rich!” ISN’T the answer
Tax-and-redistribute doesn’t fix the problem.
There are several major psychological problems with taxing billionaires to redistribute the wealth to people in need. The psychology of taxation is something we don’t talk about often enough, and I believe it’s time we bring it to center stage:
1. Taxing billionaires makes them feel like something has been taken away from them.
A few years ago, my baby son Concord was playing happily in my lap. Michelle handed me a bottle of breastmilk. Concord didn’t ask for it, but I gave it to him anyway. A minute later I pulled it away, and he screamed bloody murder. Why? Because I took it away.
Billionaires are like screaming babies.
If we never gave it to them in the first place, they wouldn’t scream when we take it away.
2. Taxing billionaires gives them the false impression that it was their money in the first place.
Elon Musk — the Marie Antoinette of our generation — is the textbook example of someone who genuinely thinks his money is his.
This is a techno-grifter who’s received tens of billion in corporate socialism at tax-payer expense, using our currency, our educated workforce, our infrastructure, our judiciary and property rights, our military and policing, and our economy, and he thinks he’s the only person who gets to decide how he gets to spend the wealth we collectively created as a society?
3. Taxing billionaires gives them the false impression they actually “earned” all that money.
It is mathematically impossible to “earn” a billion dollars in a democratic society. (America is a nearly-rules-free-market metaverse that believes a single homo sapien can create a billion dollars in “value,” but people who live in reality understand this is societal hogwash.)
If you worked a job that paid $50 per hour ($100,000/year), you’d have to work full-time for 10 million years to properly earn a trillion dollars.
It’s just not possible in a democracy of rational citizens.
4. Taxing billionaires gives them the false impression that they are entitled to trillions of dollars of worker-created wealth.
Workers create 100% of every company’s value. Billionaires “earn” their money by extracting value from the planet, their suppliers, their employees, their customers, and taxpayers.
The moral truth is that all American wealth belongs to the American people, and democracy should ultimately decide how it is distributed, re-distributed, or ideally…
We need fair PRE-distribution
“Every billionaire is a policy failure.” — Dan Riffle
We need to forget about fruitlessly trying to tax billionaires and re-enforcing their elitist mindset in the process — we need a fairer pre-distribution that reflects our commons values.
What could this look like, practically?
Level 1: Imagine if every single worker in America was automatically enrolled in a union that fought against corporations to secure them higher wages, more ownership, better and safer working conditions, and the lion’s share of the value they create.
Level 2: Imagine if every adult American was entitled to a truly living-wage job guarantee so they could decline low-paying private-sector jobs that require them to make a profit for shareholders, thus creating a market condition that forces companies to compete against democracy to pay workers closer to their fair share.
Level 3: Imagine if all company stock had to be fairly distributed to the workers of each company. Or you could only have companies with non-exploitative business models where shareholders can’t passively flay a profit off the work of others, IE, co-operatives, partnerships, not-for-profits, for-benefits, sole proprietorships, etc
Now imagine if we did all three things. What would happen? Workers would re-gain the purchasing power that has been stolen from them since 1971, and then some.
If we did these things, elites would no longer have the economic power to undermine democracy.
If we did these things, the people would have a real stake in the nation they’re building.
If we did these things, we’d end up with a world without billionaires and trillionaires.
And we’d be mathematically far richer for it.
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Your suggestions are the way the world should work. But it seems that our fallen world will never work that way. Sigh.