The Wealth Disparity Gap
Most of the time, we think we have a good understanding of money.
In 2024, a $10 coffee would be pretty expensive, but a $2 coffee would seem like a good deal.
Click the coffee cup to the right to fill it up.
We understand the difference between $100 and $1,000 dollars.
But when we think about money in terms of millions or billions, we start to lose our sense of scale.
Even if we think we understand it.
Imagine you have a check for a million dollars.
It's just a piece of paper, it's around 0.1mm thick. About the width of 2 human hairs.
Now, imagine stacking the checks on top of each other.
Keep stacking those million dollar checks...
Until you have the net worth of the world's richest man Elon Musk:
$320 Billion
It'll reach the height of a 10-story building.
To put this in perspective: If you jump off this stack of 1 million dollar checks... You will most definitely die if you try.
Try dragging and releasing the person to see what happens...
If you somehow made a $1 million per hour, it'll take you more than a century to make as much as Elon Musk.
Let's see how you would spend Elon Musk's net worth.
$320,000,000,000
🔗 Paper Clip
A paper clip
$0.01
✏️ Pencil
A pencil
$0.5
🍌 Banana
A single banana
$0.75
🌭 Costco Hot Dog
A Costco hot dog
$1.5
🚌 Bus Ticket
A one-way bus ticket
$2.75
☕ Coffee
A coffee
$5
🍔 Big Mac
A Big Mac
$5.29
🍸 Cocktail
A cocktail
$15
🎬 Movie Ticket
A movie theater ticket
$15
🥩 Steak
A New York strip steak
$20
👟 Shoes
A pair of shoes
$60
🍽️ Dinner
A fancy dinner for two
$90
🎮 Nintendo Switch
A Nintendo Switch
$300
📺 TV
A 60-inch TV
$1,000
📱 iPhone 16 Pro
An iPhone 16 Pro
$1,999
💻 Gaming PC
A high-end gaming PC
$3,000
📷 Camera
A high-end camera
$5,000
🌴 Dream Vacation
A dream vacation
$14,000
🚗 Car
A car
$30,000
💒 Wedding
A wedding
$30,000
🎓 Tuition
A year of tuition at a top university
$70,000
🚗 Tesla Cybertruck
A Tesla Cybertruck
$100,000
🏢 Franchise
Initial investment for a franchise
$400,000
⌚ Luxury Watch
A rare Patek Philippe timepiece
$1,000,000
🏠 House
A single family home
$1,000,000
🏎️ Supercar
A Bugatti Chiron
$3,000,000
🚁 Helicopter
A luxury private helicopter
$15,000,000
🏰 Luxury Mansion
A Beverly Hills estate with 12 bedrooms
$50,000,000
✈️ Private Jet
A Gulfstream G650 private jet
$65,000,000
🏝️ Private Island
A 100-acre private island in the Caribbean
$100,000,000
🛥️ Luxury Yacht
A 100-meter super yacht with helipad and pool
$300,000,000
🎨 Art Collection
World-class art masterpieces
$500,000,000
🏨 Luxury Hotel
A 5-star hotel in Dubai
$800,000,000
⚽ Sports Team
A professional sports franchise
$2,000,000,000
🇫🇯 Country: Fiji
The country of Fiji (GDP)
$5,800,000,000
🇹🇩 Country: Chad
The country of Chad (GDP)
$19,000,000,000
🇮🇸 Country: Iceland
The country of Iceland (GDP)
$33,000,000,000
🇧🇴 Country: Bolivia
The country of Bolivia (GDP)
$48,000,000,000
🇬🇷 Country: Greece
The country of Greece (GDP)
$252,000,000,000
🇵🇹 Country: Portugal
The country of Portugal (GDP)
$303,000,000,000
But to really understand the problem, we have to look at the growing wealth disparity in the United States.
In 2012, this was what Americans think the wealth distribution SHOULD look like.
Top 20%
Second 20%
Third 20%
Fourth 20%
Bottom 20%
This was what Americans THINK the wealth distribution looks like.
Top 20%
Second 20%
Third 20%
Fourth 20%
Bottom 20%
This was what the wealth distribution ACTUALLY looks like.
Top 20%
Second 20%
Third 20%
Fourth 20%
Bottom 20%
Source: Norton & Ariely (2011). Building a Better America—One Wealth Quintile at a Time
As of 2024, the top 10% of the population now owns 62% of the wealth in the United States.
While the bottom 50% of the population owns only 6% of the wealth in the United States.
U.S. Wealth Distribution in 2024
(Percentage of Total Wealth)
Top 10%
Middle 40%
Bottom 50%
Source: Federal Reserve Distributional Financial Accounts
That's not even the craziest part.
The combined networth of the top 400 Americans (5.4 trillion) is 42% greater than the networth of the bottom half of the entire United States population (3.8 trillion).
That is a big problem.
Solution?
A good approach would be to create a wealth tax.
Here's how it works:
For wealth under $50 million:
Tax Rate: 0%
For wealth between $50 million and $1 billion:
Tax Rate: 2%
For wealth over $1 billion:
Tax Rate: 3%
Now you might ask,
Are we going to start re-distributing wealth???
or
Why are we punishing people who are smart with money???
Not quite...
Under Elizabeth Warren's Wealth Tax proposal, a billionaire worth $10 billion dollars would pay only $289 million dollars.
Yes it's "ONLY" $289 million dollars because in the context of an average American of net wealth $192,200, that's less than $6,000 dollars a year.
The median income American pays around $18,000 a year in taxes.
Effective Tax Rate
Billionaire
2.9%
Median American
9.4%
That is 3 times more in terms of relative wealth than the average billionaire pays.
While the rich will stay rich, the money from this tax program will generate 200 billion dollars a year to fund public services.
While not taking a penny from more than 99.9% of Americans.
Try it yourself:
Wealth Tax Calculator
(Your net worth)
$0
Your annual wealth tax would be:
$0
You are not affected by the wealth tax!