The largest individual taxpayer in U.S. history, Elon Musk, becoming a “trillionaire”—at least on paper—has caused a wave of panic among the Democrats in Washington, D.C. Upon learning that the man he's called a “right-wing extremist” had reached that “dangerous” financial status after deciding to take SpaceX public, Bernie Sanders said, “Our democracy cannot survive when one man becomes $700 billion dollars richer since Trump's election.” We've heard this kind of desperate yelp too many times before to believe it.
Reacting to the SpaceX IPO, AOC (who’s called Musk “dumb”) called for a wealth tax so people can afford medical care. Elizabeth Warren and Zoran Mamdani chimed in with their variations on why Musk is a boogeyman.
We hear that if the federal government could get their hands on Musk’s money, it could fix so many societal problems. Some have cited homelessness in L.A. and San Francisco, but San Francisco has spent in the range of $1 billion annually for years on its homeless problem with very little to show for it. One way the government could fix those situations would be putting Musk in charge of the operation.
It sounds like our most successful entrepreneur has replaced climate change as public enemy number one in the minds of the social Democrats and their allies. But let's not forget that his companies employs approximately 160,000 people. And in his entire business career, Musk’s firms have created around 200,000 jobs, all of them producing taxable incomes. The supply chains his companies have created have also produced hundreds of thousands of jobs. AOC wants Musk to be taxed at a higher rate than “a truck driver,” which isn't a crazy thought, but truck drivers don't create any jobs that sustain comfortable lives and generate tax revenues.
Looking at the taxes Musk has paid is just a one-sided snapshot of his economic contributions to the country, but it's still worth examining. In 2021, he paid over $11 billion in taxes after exercising Tesla stock options. Between 2014-2017, he paid roughly $455 million in federal income taxes. In 2018, he paid no federal income taxes because his income that year came almost entirely from stocks rather than salary or sold assets. Still, Musk's wealth increased substantially in 2018. The Democrats want to address that by taxing the wealthy for their unrealized capital gains.
The successful immigrant from South Africa is now called a trillionaire, but he doesn't have access to a trillion dollars like someone who owned a trillion dollars in gold bullion would have. He's not a bona fide trillionaire. Musk doesn't want to sell his stock holdings to fund his unlavish (except for his fleet of jets he uses for business) lifestyle, so he borrows money from banks at a low interest rate using his stock as collateral. The borrowed money doesn't count as income, so he doesn't get taxed on it. The Democrats have a problem with that.
There's an undeniable undercurrent of envy involved in those calling for higher taxes on Musk that’d be more understandable if he were living the “trillionaire lifestyle” and shoving it in people's faces. Benchmark him against island-buying, mega-yacht-sailing tech billionaires, and he looks frugal.
He’s not flashing his wealth to create envy; he's investing most of it back into his companies to support massive research and development that benefits the nation and the world. By not paying his “fair share” of taxes, Musk isn't taking away anyone's health care. The federal government spends what it wants to spend, by typing numbers on a computer screen, regardless of collected tax revenues. That's how it arrived at the current national debt of over $30 trillion.
What Musk’s investment in his firms has accomplished is astounding. Tesla single-handedly forced the global automotive industry to move towards electric vehicles. SpaceX has dramatically reduced the cost of space flight while producing the Starlink global internet network. Other Musk ventures have pushed the boundaries of medical technology, artificial intelligence, solar energy and urban transit. He pulls his weight when it comes to his contributions to society, but we're supposed to believe he's a threat to our democracy?
Bernie Sanders and his ideological confreres entertain this delusion in part because of their fundamental lack of understanding about capitalism. AOC has called capitalism “not a redeemable system for us.” She prefers government initiatives like a federal job guarantee to the free market for maximizing employment, but government jobs are seldom associated with innovation. Sanders also favors heavy government regulation to rein in what he sees as the excesses of capitalism, but regulation often inhibits innovation.
The Democrats support their reliance on the federal government rather than free markets by pointing to the fact that American innovations like the internet, microchips, and mRNA vaccinations were funded by taxpayer dollars. Citing the few exceptions makes them feel better because federal programs don't produce billionaire-type wealth, which is a great “sin” in their ideology.
So they focus on how much a risk-taking entrepreneur has, rather than what they produce. What they have is more than they “deserve,” and progressives claim the moral authority to determine what people deserve. Sanders and AOC want a redistribution of wealth through taxation and government programs, overlooking the essential role that risk-taking plays in creating prosperity for everyone, and underestimating the role financial incentives play in motivating that risk-taking.
Musk could've retired as a very wealthy young man, but instead he chose to keep generating more jobs and more income tax revenue for the Treasury. This has self-righteous progressives up in arms.
Jimmy Kimmel is a spokesman for the many on the Left who are consumed with envy over Elon Musk's net worth. After the SpaceX IPO, he said that Musk arrived in America as the “son of a humble emerald miner,” but fact checkers have never been able to verify that dubious claim. The implication is that he had a big head start in life, but when he first got to the US, Musk took jobs like cleaning boiler rooms and farm labor while putting himself through school. Kimmel went on to say that Musk is “stealing” from Americans, but offered no explanation. His audience doesn't require one.
That audience doesn't see the irony of Kimmel, who's worth at least $50 million, being envious of someone worth much more. The late-night host didn't take the risks Musk took to build his fortune. He gets paid for his smug jokes with a huge salary, while the “thief” he hates built Zip2 and PayPal from scratch, sold them, and then used that money to start Tesla and SpaceX.
Kimmel had Musk on his show in 2013, during which he lauded him for his accomplishments, starting at age 12, when he designed a video game he then sold to a computer magazine. The audience cheered wildly for their business hero then, but he fell from grace after aligning himself with Trump, so now it's time to focus on the imaginary threat his massive success poses.