Elon Musk is considered to be the first trillionaire, this is why the rich keep getting richer

Jakarta –

An entrepreneur from the United States (US), Elon Musk is expected to be the first trillionaire (in US dollars) in the world in 2027. This was revealed in the latest report from the Informa Connect Academy.

Of all the billionaires in the world, Elon Musk is the closest to wealth up to 13 US dollar figures. It is known that the wealth of the founder of Tesla continues to grow.

At the beginning of 2020, Elon Musk’s wealth was still around US$28.5 billion based on the Bloomberg Billionaires Index. By the end of that year, his wealth had jumped to about US$167 billion and by September 2024 it would be about US$265 billion.

The biggest driver of Elon Musk’s wealth is Tesla stock, which has soared due to the COVID-19 pandemic. Tesla stock was around $30 per share in January 2020, and then January 2021 jumped to nearly $300 per share.

“The reason people get very rich is because they started companies and they grew those companies. The reason these companies keep growing and growing is development because (these companies) are making something of value that people want,” American Enterprise Institute Economic Policy Analyst James Pethokoukis was quoted as saying by CNBC, Sunday (13/ 10/2024).

US rich people investing in stocks

Rich people usually have some of their assets invested in the stock market. While middle income families tend to have more wealth tied up in real estate.

The richest 1% of Americans own nearly 50% of the nation’s stock. Meanwhile, the bottom 50% of Americans own about 1% of all stocks, according to Federal Reserve data from mid-2024.

About 58% of households owned property in 2022, either directly or indirectly through passive investments such as retirement accounts.

“Wealth inequality has a big impact on the prices of different types of assets. The stock market is one of the things that causes wealth inequality if it is measured by wealth concentration,” said John Sabelhaus.

Tax inequality makes the rich richer

There is also debate about the role of taxes in contributing to wealth inequality. Some, including Pethokoukis, argue that large compensation packages are the reward for creating a successful company. Others such as Sabelhaus say loopholes in the tax system create unfair competition.

“Especially over the last quarter century, changes in tax policy have made it harder to tax the rich. There are more exemptions, more ways to avoid taxes,” said Sabelhaus.

Many Americans are taxed according to what they earn, for example what is shown on their payslip. At the same time, on paper, the income of the wealthy is less clear.

“Elon Musk has a very large compensation package. Only a small portion of the package shows up as taxable income because most of it is in the form of bonuses and other means of earning a salary which makes him more easy to avoid taxes,” he said.

(help/that)