The Inequality Engine: How Privilege, Tax Loopholes, and Public Purse Engineered the Trillionaire

For one dizzying moment on 12 June 2026, the man that you just can’t get away from, crossed an unthinkable line. Elon Musk – born to privilege, supercharged by Wall Street and steadied by public investment – became the world’s first trillionaire, if only for a moment.

Maybe you’ve tried picturing what this stupidly high number looks like. If you spent a million dollars a day, it’d take you 2,738 years before you were penniless. If you laid out a trillion US dollar bills end to end, they would stretch to the moon and back over 200 times. To match a trillionaire’s wealth, you would have to combine the wealth of the poorest 46% of the world’s adult population – a staggering 3.8 billion people. No matter which way you look at it, the difference between a trillionaire and everyone else’s share of the world’s resources is enough to make your stomach turn.

While mainstream media narrativise Musk’s rise to riches as one fueled by his personal entrepreneurship and innovation, closer inspection reveals something quite different; an economic machine that increasingly rewards asset ownership over earning wages.

‘We keep talking about Elon Musk’s wealth as if it fell out of the sky. It didn’t. It was built, piece by piece, by decisions that specific institutions made and could have made differently. If we want to understand extreme wealth concentration, we shouldn’t start with Musk’s personality. We should start with the machinery behind him.’ Ack Kabamba – President for the Kwame Nkrumah Economics and Business Association & REI member.  Read the full blog here.

Musk is in an entirely different economic universe, but may not be alone for long. With four other men predicted to join this cosy closed-club by 2030, this new age of staggering inequality demands that we ask: how does our economy work and who does it

The mechanics behind the inequality machine

Wealth starts with privilege. Elon Musk was born in 1971 to a wealthy, white family in apartheid-era South Africa. Building on the foundations laid by the British Empire, the racial hierarchy established under the apartheid system saw land, property and economic opportunities systematically channelled towards white South African families. Black South African land ownership and rent had been restricted to 13% of land since 1936, while the remaining land remained under white control. This created a system that gave White South Africans a windfall of economic opportunities that were denied to the Black majority.

Elon Musk’s privileged childhood unfolded within this deeply unequal system. His father, Errol Musk, was an engineer and property developer, whose position in society would offer great privileges to his family, far removed from that experienced by most South Africans. On describing the family’s financial position, Errol Musk once boasted, “we had so much money at times we couldn’t even close our safe”.

That family wealth cushioned Musk’s early entrepreneurial moves. His father said that he bankrolled the $28,000 seed funding needed to start up Zip2, the first company Musk founded with his brother. When the company was sold four years later, Elon’s seven per cent share saw his personal wealth grow by $22 million. This gilded start of wealth, racial privilege and access to capital, underscores a critical truth; Musk’s journey began from a position of exceptional advantage.

Wealth intensifies through a regressive tax system. This foundation became a rolling snowball for wealth as Musk’s ownership of tech-businesses grew. According to Forbes, 49% of Musk’s wealth comes from his stock holdings in Space X and Tesla. The latter paid no income tax in US in 2024 and 2025 despite having booming sales and its share price almost soaring. These stocks have given Musk significant tax advantages. Rather than selling shares (and thereby triggering Capital Gains tax) Musk has repeatedly borrowed billions against his Tesla stock, using asset‑backed loans to fund spending and investments. The proceeds from loans remain untaxed under current U.S. rules, allowing Musk to pay a far lower relative tax rate than that of most working residents of the countries his companies operate in. One study by ProPublica, brings this disparity into sharp focus, finding that Elon Musk’s ‘true tax rate’ – taxes paid relative to the growth of wealth – was about 3.27%.

The current tax system essentially has two floors, one for income earned through work and one for wealth held in assets.This systemic express lane for the wealthy dramatically widens the chasm between workers and the super-rich.

Wealth created from the public purse. Both Tesla and Space X have benefited from government contracts and public subsidies. When private finance options were hard to come by in 2010, Tesla received a $465 million loan from the US Energy Department that helped the company to survive and grow. The company also benefited from federal electric vehicle tax credits for consumers and state-level subsidies. Such support can reduce risk for firms during challenging times or when the private finance is limited. As the largest shareholder in those companies, Musk continues to capture much of that firm level growth through his ownership of assets, while paying very little taxes on his wealth. 

What clearly emerges from this story is that it is the tax rules and law, public institutions of our times were and are the key players in his economic success. To paraphrase Katharina Pistor, capitalism is market society on legal steroids.

The trillionaire’s economy

The economy and its financial system continues to socialize the risks of the Musk’s ventures while privatising long-term gains, and political access. If Musk’s example is anything to go by, existing wealth can translate into political influence, allowing wealthy individuals to further mould the economic rules to their advantage. Take how Musk used his position as owner of X, an influential social communications network, to push back against wealth taxes or how he plans to spend $100 million plus to boost Republican candidates in the upcoming next congressional election; the potential for further personal profit only increases as wealth inequality intensifies.

Elon Musk does something very smart to distract you from how unfair this is. Purposefully fanning the flames of hate and division, so that you hate your neighbour, that you are much more similar to that you will ever be to him’ Ewan Lyall, REI’s New Economy Influencer Collective Member Watch the full video here.

Meanwhile, people who rely on wages are seeing their incomes fail to keep pace with rising costs, while facing increasingly insecure work and weakened public services.

With the contrast between the life chances of the owners and wage-earners pulled into sharp focus, we should ask; if ownership determines who benefits from economic growth, should we rethink who gets to be an owner? And, should the rewards of ownership really flow to asset owners or should they be shared more equally?

Options for narrowing the wealth gap

There are no quick fixes to extreme wealth concentration. But new economic thinking points toward two routes forward; changing who accumulates wealth in the first place and redistributing wealth after it has accumulated in the hands of the super-rich.

Rethink infrastructure ownership. Essential infrastructure – energy, transport, water and digital infrastructure – will generate wealth for the owners year on year. If it doesn’t the owners will prioritise shareholder over the public’s interests. Under the current economic system, those profits from that infrastructure flow directly toward private hands. This has been picked up recently by Common Wealth, whose work exposing the damaging impact of UK infrastructure privatisation has led them to advocate for public ownership—reinvesting wealth in communities rather than extracting it as shareholder profit. Taking back infrastructure into public hands already has proven success stories under its belt. Take TNI’s ‘The Future is Public’, documenting 1400 successful remunicipalisations in 58 countries as a start.

Give workers a greater stake. Most people contribute labour to the economy but relatively few own the companies that gain from their work.In Capital and Ideology, Thomas Piketty says that “The question of property ownership is too important to be left to property owners alone.” He urges for greater worker representation on boards and more distribution of capital ownership so that the returns generated by their labour would flow towards them, in line with their ownership stake. Examples already exist. In Kerala, India, the Uralungal Labour Contract Co-operative Society, has operated for a hundred years, growing from a small group of labourers, to a firm capable of delivering major infrastructure projects. Rather than profits flowing to external shareholders, it has returned wages 40% higher than the national average for similar work, along with significant influence over decision making.

Introduce wealth taxes. While public and worker ownership could change who benefits from economic growth from the outset, wealth taxes can redistribute some of the wealth that has already accumulated. Building on his research into global tax avoidance, economist Gabriel Zucman proposes a 2% wealth tax on billionaires, to match the tax faced by teachers, nurses, and other wage earners. This argument has recently been picked up by organisations such as Oxfam and Tax Justice Network Africa, which argue that wealth taxes could help address extreme inequality in systems where labour is often taxed more heavily than wealth generated through asset ownership. 

Rectify historical inequalities. Global taxation reform is essential more than ever but it doesn’t go far enough.If trillionaires have benefited from the economic systems of empire, and continue to do so through neo-colonialism and apartheid, and complicity in genocide, then taxing that wealth raises a bigger question: who has historically benefitted from the global economy, and who has paid the price? As historian Vanessa Ogle points out, the wealth extracted during the colonial period did not disappear with formal decolonisation. Instead, it remained in private hands, protected in offshore tax havens. 

Existing international tax rules leave too much leeway to multinationals to book profits wherever rates are lowest, regardless of where actual business happens. The OECD’s 2021 global minimum tax (GMT) seeks to reduce the incentive for this kind of profit shifting by making sure that large multinationals pay at least a minimum level of tax wherever they operate. This is progress within limits. What we need is complementary national domestic reforms in. The Corporate Alternative Minimum Tax (CAMT), developed by trade unions and tax experts, starts from a simple principle: multinational companies should be taxed where real economic activity takes place, not where profits are declared. This builds on the idea of a minimum tax while introducing a fairer way to determine where it is paid, allocating profits using observable factors such as sales and employment.

Building a new economy

There are no surprises here. Elon Musk’s rise to become the world’s first trillionaire is not simply a story of one man’s entrepreneurial genius. It is a story of an economy whose rules increasingly reward ownership over work, allowing extraordinary wealth to accumulate in the hands of a few. Look at the fortunes of others tipped to join Musk in the trillionaires club and you’ll see similar patterns emerging; inherited advantage, asset ownership, favourable tax rules and manufactured public support. If this level of inequality is too much for us to accept, the challenge is not simply to criticise trillionaires. It is to rethink the rules of the economy and who they are designed to serve.

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