Blue Origin CEO Jeff Bezos (left) and SpaceX CEO Elon Musk.
Joe Raedle/Getty Images/Axel Springer
- According to Americans for Tax Fairness, US billionaires added just over $1 trillion to their wealth in 2021.
- Elon Musk alone saw his wealth grow by $118 billion, a 77% increase to his net worth.
- A proposed tax on billionaire income would’ve brought in $240 billion in 2021 — more than enough to fund the child tax credit.
American billionaires’ wallets had another strong year.
From December 31, 2020 to December 31, 2021, the country’s billionaires added just over $1 trillion to their collective wealth, according to a new report from the left-leaning Americans for Tax Fairness (ATF).
Using Forbes data, ATF found that billionaires saw their collective wealth go from $4.1 trillion at the end of 2020 to $5.1 trillion at the end of 2021, a 25% increase in the span of just a year. Additionally, the country minted more billionaires, with their ranks swelling from 659 to 736.
Elon Musk, the world’s richest man, saw the greatest gains in 2021. His wealth swelled by 77%, according to ATF, adding about $118 billion to his net worth. According to Forbes, Musk’s net worth currently sits just around $290 billion.
It’s the latest accounting of the huge financial gains that the country’s — and world’s — wealthiest made during the pandemic. As Insider’s Ayelet Sheffey reported, as of August 2021, billionaires had accrued an additional $1.8 trillion since the pandemic’s onset. That’s enough to pay off the whole of the US’ $1.7 trillion student debt crisis. Now, the gains in 2021 alone could easily pay for policies like an extension of the child tax credit — a key pandemic anti-poverty measure that’s currently on the chopping block.
As ATF notes, most of those gains may not find themselves subject to tax: Billionaires’ income primarily derives from gains on assets they own, like stocks, rather than a straightforward salary. Under current tax law, capital gains are only taxed when assets are sold, so the huge increases in the value of unsold assets tracked by ATF aren’t counted as taxable income. That’s one of the reasons why it’s perfectly legal for many of the ultra-wealthy to pay relatively little in taxes, something that inequality experts have been sounding the alarm on for years.
Democrats recently proposed one measure that would target the unsold assets of America’s billionaires. Under Senator Ron Wyden’s Billionaires Income Tax, those assets would be taxed at the 23.8% capital gains rate — which currently usually only applies when someone sells off assets. Biden threw his support behind the idea, but the tax was quickly nixed after its announcement. House Speaker Nancy Pelosi privately criticized the tax as essentially a public relations stunt, Insider’s Joseph Zeballos-Roig reported.
In 2021 alone, ATF calculates that billionaires would be on the hook for up to $240 billion under the Billionaires Income Tax. A one-year extension of the expanded child tax credit would cost around $185 billion, according to estimates from the Congressional Budget Office. A permanent increase would cost about $1.6 trillion over the next ten years.
All told, the nonpartisan Joint Committee on Taxation found that the tax could raise $557 billion over a decade — enough to fund monthly checks to America’s parents for years to come.