How Much Money Billionaires’ Row at Trump’s Inaugural Could Save in GOP Tax Cuts

Sitting close by as Donald Trump was sworn in for a second term was a clutch of billionaires worth some $1.3 trillion, including the planet’s three richest men

By William Rice

The oligarchy President Joe Biden warned us about in his farewell address was on full display at his successor’s inauguration Monday. Sitting close by as Donald Trump was sworn in for a second term was a clutch of billionaires worth some $1.3 trillion, including the planet’s three richest men: Elon Musk, Jeff Bezos, and Mark Zuckerberg.

What do billionaires get by sucking up to an easily flattered president? All sorts of things that can make them even richer: looser regulations on their businesses; protection from the tariffs Trump is threatening–and perhaps most immediately, lower taxes. 

Here’s a rundown on how much Trump’s favored inaugural guests could save from the tax plans of the new president and his Republican allies in Congress. These begin with extending the parts of the 2017 Trump-GOP tax law set to expire at the end of this year. But Trump has floated the idea of abolishing the income tax altogether and replacing the revenue with tariffs; and Republicans in the House have introduced a bill to eliminate the entire current tax system, including the estate tax, in favor of a national sales tax. 

Elon Musk: The world’s wealthiest person, recently worth $426 billion, Musk has a lot to gain from proposed GOP tax cuts. According to ProPublica, between 2013-18, he averaged $178 million in so-called “ordinary” income. (This kind of income–principally wages for most people –is distinct from investment income that is taxed at lower rates.) During that decade he was worth “only” about $20 billion, so his income has probably gone up since then with the 20-fold increase in his wealth. 

But even assuming his income has stayed the same, Musk would stand to pocket $4.6 million a year just from the reduction in the top-income tax bracket that Trump and congressional Republicans want to save from expiration. That rate, which this year only applies to individual income above roughly $625,000, is scheduled to return to 39.6% from 37% at the stroke of midnight on Dec. 31. 

If the whole income-tax system was wiped out and replaced by tariffs or a national sales tax, the Musk income-tax savings per year would jump to around $66 million. He would pay higher prices because of tariffs or a sales tax, but the super-wealthy spend a much lower share of their income on consumption–and therefore on consumption taxes–than do middle- and lower-income families. 

Yet those savings are peanuts compared to the bonanza Musk’s family will reap if Republicans succeed in abolishing the estate tax. The estate tax is the only federal curb on the creation and growth of economic dynasties; this year only applies to family fortunes of around $28 million and up; and despite propaganda you may have heard is no threat to family farms or small businesses. 

Applying the top estate-tax rate to his current net worth, Musk’s heirs would save up to $170 billion if the tax were abolished.

Jeff Bezos: The second-richest man in the world, recently boasting a net worth of $242 billion, Bezos and his family would get even richer under Republican tax proposals. However, unlike Musk, it may not matter to him much if the top tax rate on ordinary income stays at 37% next year or reverts to 39.6%. That’s because he benefits from one of the biggest loopholes in the tax code, as explained below.

ProPublica reported Bezos enjoyed an average annual income of $832 million over the six years 2013-18. But none of that income was “ordinary”--meaning among other things that Amazon, the company he founded and ran, paid him no salary over that span. Before you worry about how he afforded groceries, you should know that his association with Amazon was making him plenty of money even if it didn’t come in the form of a paycheck. 

The price of Amazon stock jumped more than six-fold over those six years–from around $13 a share to around $85. Bezos currently owns almost 10% of all Amazon stock or about a billion shares, and he undoubtedly owned at least a commensurate amount back in the 2010s. His income came from occasionally selling some of those shares for a profit.

But he didn’t have to pay the same tax rate as someone who made hundreds of millions of dollars in ordinary income. The profit from selling his appreciated shares–what are known as “long-term capital gains”--are subject to a top tax rate (20%) that’s just a little more than half the top tax rate paid on wages and other types of ordinary income (37%). At the income amounts Bezos was receiving, he would also pay a 3.8% surtax on his investment gains. 

Even assuming Bezos is generating the same amount of capital gains income now as he was in the last decade (though the reality is that he’s probably receiving a whole lot more: Amazon was recently trading at $231 a share), if the current tax system was wiped off the books, he would save about $200 million in taxes every year. 

One reason Amazon is so profitable and its stock price keeps shooting up is that in recent years it hasn’t paid much in federal income taxes despite huge profits. In 2021, it paid 6% on $35 billion in domestic earnings. That same year, the average American family paid more than twice that rate, 14.9%. The company avoided $5 billion in taxes through legal loopholes. 

In 2022, President Biden and a Democratic Congress tried to prevent that kind of corporate tax dodging by enacting a corporate minimum tax of 15% on the nation’s biggest companies, including Amazon, as part of their Inflation Reduction Act (IRA). Trump and his Republican Congress want to revoke the IRA, which could save Amazon billions of dollars in taxes each year. 

The biggest savings, though, once again would come from the elimination of the estate tax. The lucky inheritors of the Bezos fortune would at his current level of wealth avoid almost $100 billion in taxes. 

Mark Zuckerberg: Number three on the list of wealthiest human beings, Zuckerberg–recently worth $214 billion–was in the same tax situation as Bezos in the 2010s according to ProPublica. He averaged over $650 million in annual income over the six-year span 2013-18, but none of it was ordinary income, all capital gains. So assuming his situation hasn’t changed, he doesn’t care what the top ordinary-income tax rate is, but would be very happy to see the income-tax system as a whole abolished, since he would save about $150 million a year (less whatever relatively small amounts he paid in tariff-induced higher prices or a national sales tax). 

Just as the supersized profits of Amazon have rocketed Bezos into the wealth stratosphere, the big earnings of Meta Platforms (owner of Facebook) have transformed Facebook founder Zuckerberg into a plutocrat. And as with Amazon, a portion of Meta’s outsized profits can be traced to strenuously avoiding taxes. The IRS charged the company in 2020 with improperly shifting domestic profits offshore in order to avoid some $9 billion U.S. taxes since 2010. 

Because of Republican budget cuts, the IRS was seen as outmatched in its legal battle with Meta. But another part of the Inflation Reduction Act restored $80 billion in IRS funding, allowing the agency among other overdue investments to hire the kind of specialized personnel it needs to pursue complex tax cases like the one against Meta. As noted above, Trump and the Republicans want to strike down the IRA and its tax-agency funding, perhaps sinking the suit against Meta and allowing it to keep its $9 billion in dodged taxes. 

The big payday once again is for Zuckerberg’s heirs who at his current level of wealth would pocket over $85 billion in savings if the estate tax were to disappear.