Elon Musk and Jeff Bezos are now worth as much as America’s biggest bank

The combined net worth of Elon Musk and Jeff Bezos approached $US500 billion ($665 billion) on Wednesday, fuelled by the unrelenting rally in Tesla shares and a broad surge in tech stocks that sent the Nasdaq 100 to an intraday record.

The value of the two fortunes — a sum bigger than the market value of Johnson & Johnson and about equal to that of America’s biggest bank, JPMorgan Chase & Co. — is yet another watershed moment in what’s shaping up to be a historic week for billionaires.

Tesla chief Elon Musk and Amazon founder Jeff Bezos are the two richest people in the world.

A groundbreaking proposal from US Senate Finance Chair Ron Wyden to tax billionaires on unrealised gains was released in detailed form on Wednesday morning, only to be dropped in negotiations hours later. Wyden insists the billionaires’ tax plan isn’t dead, but talks have instead moved on to a possible 3 per cent surcharge — on top of the highest income tax rate — for those earning more than $US10 million.

While such a plan would draw in a larger number of taxpayers than the billionaires’ tax and help pay for a Democratic social-spending plan that could approach $US2 trillion, it would take a smaller bite from the wealthiest Americans, such as Musk and Bezos.

Under the billionaires’ tax proposal, Musk and Bezos collectively would have been hit with a $US100 billion one-time tax bill payable over five years if the proposal had been approved, according to the Bloomberg Billionaires Index. The plan explicitly targeted appreciated public shareholdings, which have been a main driver of billionaires’ steep wealth gains in recent years.

Musk said in a tweet on Wednesday that taxing billionaires would only make a “small dent” toward paying off the US national debt, arguing that the focus should be on government spending. Even if the super-wealthy were taxed at “100 per cent,” the government would need to turn to the “general public” to make up for the short-fall, the Tesla boss posted.

“This is basic math,” he said.

Musk, co-founder of publicly traded Tesla and closely held rocket company SpaceX, has added $US122.3 billion to his fortune this year, pushing his net worth to $US292 billion. He’s now the world’s richest person, according to the Bloomberg index. Amazon.com founder Bezos is worth $US196.3 billion.

The 10 richest Americans, including Bill Gates and Mark Zuckerberg, are worth a total of $US1.4 trillion, according to the index.

Musk hasn’t sold any of his Tesla stock for years, instead tapping banks for loans using his $US258 billion stake as collateral. Pledging shares is a way to monetise equity without actually selling it.

Musk has $US515 million in personal loans from Morgan Stanley, Goldman Sachs and Bank of America, according to a regulatory filing from December 2020, the most recent one available with this information. Musk has also said some of his shares in SpaceX are pledged, but hasn’t disclosed details about how many.

No regulatory filings suggest Bezos has borrowed against his Amazon stock.

Bloomberg

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