Taxing the Untouchable: What Elon Musk Would Owe Under New Billionaire Tax Proposals

For decades, America's wealthiest individuals have legally avoided paying income tax on the bulk of their fortunes. The mechanism is straightforward: billionaires don't hold cash — they hold stock. And since the United States doesn't tax unrealized gains, those paper profits remain untouched year after year.

But that loophole is increasingly under fire — not just in the US, but around the world.

Elon Musk made history on June 12, 2026, becoming the world's first trillionaire. His fortune is built almost entirely on unsold shares in companies like SpaceX. Under current US tax law, he owes nothing on those gains until he sells. The question policy makers are now debating: what if that changed?

**A Global Push to Tax Paper Wealth**

The debate is no longer confined to Washington. South Korea grabbed headlines this week when lawmakers and labor groups proposed including unrealized gains on stocks and real estate in standard income tax calculations. The proposal, introduced at a forum hosted by South Korea's ruling Democratic Party, triggered a massive selloff in Korean markets — an event commentators have already dubbed "Black Tuesday."

In the Netherlands, the Lower House of Parliament passed the Box 3 Actual Return Act on February 12. The legislation would tax annual paper gains on stocks, bonds, and cryptocurrency at a flat rate of 36%, with a planned implementation date of 2028. The bill still requires Senate approval, and backlash was swift. By February 25, the Dutch finance minister acknowledged the law would need significant amendments. The Financial Times reported that Prime Minister Rob Jetten's coalition is now preparing a round of concessions.

**US Lawmakers Take Aim at "Buy, Borrow, Die"**

In the United States, Senator Ron Wyden has introduced the Billionaires Income Tax, backed by more than 20 cosponsors. The legislation would require tradable assets — primarily stocks — to be marked to market annually and taxed at long-term capital gains rates.

As the bill explicitly states, its purpose is to eliminate tax planning strategies such as "buy, borrow, die," which allow ultra-high-net-worth individuals to defer tax obligations indefinitely. The bill does not introduce a new tax rate. Instead, it applies the existing top rate of up to 23.8% — the 20% long-term capital gains rate combined with the 3.8% net investment income tax — on an annual basis rather than only upon sale.

For nontradable assets like real estate and private businesses, gains would be subject to the standard capital gains rate plus a "deferral recapture" interest charge, with the total capped at 49% of the gain. Representatives Steve Cohen and Don Beyer introduced a parallel House version, making this the first Congress to advance a bicameral Billionaires Income Tax.

Separately, Senator Elizabeth Warren reintroduced the Ultra-Millionaire Tax Act in March. Her proposal would levy a 2% annual tax on net worth above $50 million, rising to 3% on wealth exceeding $1 billion.

At the state level, California voters will weigh in this November on the California Billionaire Tax Act, which would impose a 5% tax on residents with net worth above $1 billion. The Billionaire Tax Now Coalition has since signaled flexibility, telling Governor Gavin Newsom it would accept a reduced 2% rate.

**How Much Is Musk's Fortune — and How Little Is Taxed?**

Following his historic trillion-dollar milestone, a tech sector selloff pulled SpaceX shares down roughly 24% from their June 16 peak. As of June 26, Forbes estimated Musk's net worth at approximately $945 billion — still far ahead of second-place Larry Page, valued at nearly $281.6 billion.

Despite his extraordinary wealth, Musk's annual salary at SpaceX remains $54,080 — unchanged since 2019. His actual wealth is tied to approximately 4.76 billion SpaceX shares. Bloomberg notes this figure excludes roughly 1.3 billion unvested restricted shares linked to performance conditions and around 237,530 shares pledged as collateral. He also holds 350,000 exercisable options. At a recent share price near $153, his SpaceX stake alone is valued at approximately $728.3 billion.

Under the Wyden bill, that stake would generate an annual tax bill based on the year's price movement. Under Warren's Ultra-Millionaire Tax, Musk would owe 3% on virtually his entire fortune every single year. These proposals remain legislative proposals for now — but the global momentum behind taxing unrealized wealth is building faster than at any point in recent history.