How Much Tax Would Elon Musk Pay If This Us Bill Passes?

What Happened

In the United States, Senator Ron Wyden has introduced the Billionaires Income Tax. The bill, with more than 20 cosponsors, would tax tradable assets, such as stocks, annually at market value.

This means the existing top rate of up to 23.8% (the 20% long-term capital gains rate plus the 3.8% net investment income tax) applies annually rather than only at sale.

Representatives Steve Cohen and Don Beyer introduced an identical House companion, making this the first Congress with a bicameral Billionaires Income Tax.

Notably, the numbers show a coordinated push. In March, Senator Elizabeth Warren reintroduced the Ultra-Millionaire Tax Act.

Market Context

The bill does not set a new tax rate. Instead, it changes when the ultra-wealthy pay. Tradable assets, such as stocks, would be marked to market each year and taxed as long-term capital gains.

Meanwhile, gains on nontradable assets like real estate and private businesses would be taxed at the normal capital gains rate plus a “deferral recapture” interest charge, with the combined total capped at 49% of the gain.

Why It Matters

Backlash was swift. On February 25, the finance minister said the measure could not proceed as written and would require amendments. The FT reported earlier this month that the coalition under Prime Minister Rob Jetten is preparing a round of concessions.

Details

Why are American billionaires able to live tax-free? It’s becuase they dont hold any real cash. Rather, they hold billions of dollars in stock, and the country doesn’t tax unrealized gains.

But what if it did? South Korea is planning to do it. The Netherlands also tried to push it. Some US lawmakers are debating versions of their own. The target of these tax initiatives is wealth like Elon Musk’s.

He became the first trillionaire on June 12, with a fortune built almost entirely on unsold stock. Move him to Seoul, or change US law, and the bill arrives. But the key question is how big would it be?

The Tax Laws Spreading Across The World

The latest flashpoint arrived in Seoul. This week, lawmakers and labor groups proposed folding unrealized gains on stocks and real estate into income tax.

In the Netherlands, the Lower House of the Dutch Parliament passed the Box 3 Actual Return Act on February 12, taxing annual paper gains on stocks, bonds, and crypto at a flat 36%. The law targets a 2028 start and still needs Senate approval.

US Lawmakers Target the “Buy, Borrow, Die” Playbook

“The purpose of this bill is to require billionaires to pay taxes annually by eliminating the ability of high income and high net worth taxpayers to use tax planning strategies such as ‘buy, borrow, die’ to defer paying taxes indefinitely,” the bill reads.

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Warren’s plan sets a 2% annual tax on every dollar of net worth above $50 million. The rate rises to 3% on every dollar of net worth above $1 billion (a 1% surtax on top of the 2% base).

Separately, California voters will decide on a wealth tax this November after the measure qualified for the ballot. The California Billionaire Tax Act would impose a single 5% tax on residents with a net worth exceeding $1 billion.

The Billionaire Tax Now Coalition has since written to Governor Gavin Newsom, indicating it is open to compromise. The group said it would back a lower 2% rate in place of the 5% it first sought.

A $945 Billion Fortune the Tax Code Barely Touches

Meanwhile, Musk’s wealth milestone has put the “Tax The Rich” narrative back in focus. He hit the trillion mark when SpaceX (SPCX) listed on the Nasdaq on June 12.

A tech selloff then pulled the stock down 24% from its June 16 high. By June 26, Forbes valued him at about $945 billion.

He still leads the ranking by a wide margin, with Larry Page second at nearly $281.6 billion. The bigger story for tax policy is what happens to that fortune each year.

Even after the slide, SpaceX drives the majority of its fortune. Musk’s base salary at SpaceX remains at $54,080 per year, unchanged since 2019.