A proposed first-of-its-kind “billionaires tax” would’ve been a major blow to the 1%’s wealth

Alert Elon… Elon Musk’s personal wealth rocketed past $250B this week, cementing his position as Earth’s richest person (insert Bezos side-eye). But this week a Democratic senator drew up the deets for a first-of-its-kind “billionaires tax,” proposed as part of Biden’s $2T spending package. This would be a tax on unrealized gains — aka investments that have risen in price but haven’t been sold. Quick refresher:

• People are taxed on income (think: wages, salary) — not on total net worth (think: cash + all unsold investments). Many stock holdings aren’t taxed unless they’re sold for profit, when they can become realized gains.
• That’s why many billionaires pay shockingly low taxes: Mark Zuckerberg’s base pay as Facebook CEO is $1 — his net worth is $120B+, thanks to all his FB shares.
• The proposed 24% tax rate on unrealized gains would apply to anyone with $1B+ in assets, or $100M in income for three straight years. The tax reportedly wouldn’t apply to real estate, but would apply to crypto.

Billionaires weren’t happy… Cue Elon’s disappointed tweet. Elon’s wealth surged $36B on Monday alone after Tesla’s stock spiked. Under the tax, he’d owe $7.8B if he ended the year with just those gains, even if he never sold his Tesla shares. America’s 732 billionaires — a quarter of the world’s total — would be the only people affected by the tax. It would reportedly generate $250B to fund the Democrats’ $2T agenda. But because of political opposition and a lack of legal precedent, the proposal has already been shot down.