Over 75% of Tesla shareholders voted to approve a pay package for Elon Musk. Under the new package, Musk would earn no salary, but would receive Tesla stock worth about a trillion dollars if the company meets specific criteria within the next decade. One of the criteria is raising the company’s market capitalization. That means the value of all its stock, taken together, needs to rise from its current $1.5 trillion to above $8.5 trillion. If those goals are met, it would mean that Musk would increase not only the value of the stock he receives but also his ownership percentage in the company.

Of course, I don’t understand the deal. I have no idea what a trillion dollars is. I am not a Tesla shareholder and didn’t participate in the vote. To someone like me, the numbers are staggering. I think they must be staggering to those who are very wealthy as well. For comparison, the most valuable company in the world is Nvidia. Nvidia makes computer chips that contribute to the AI boom. That company is worth $4.83 trillion. The CEO of that company is paid $50 million per year and owns 3.5% of the company.

I’m pretty sure $50 million per year is more than anyone could figure out how to spend. Even if buying multiple mansions and airplanes, the cash would simply be coming in faster than it was going out. If that is true, there is no lifestyle difference between earning $50 million a year and earning a trillion a year. There must be a point in the acquisition of wealth where the numbers cease to have any meaning in terms of what a person can do with it. At some point, it all becomes numbers on paper, devoid of meaning.

If that is accurate, tax cuts for the ultra-wealthy don’t really change anything for them. For example, if Musk were required to pay 15% to Social Security on all his income, which self-employed people pay, he would still be making $85 billion a year, enough to afford a lavish lifestyle with multiple yachts, private jets, and mansions. The $150 billion paid into the Social Security System would enable the program to pay benefits to all participants without cash flow problems. The system could even afford to raise the maximum benefit beyond the current rate.

Of course, that is a fantasy. Billionaires and large companies don’t pay taxes at anywhere near the rate that middle- and low-income people do. However, despite being able to afford to pay more taxes easily, they use their wealth to lobby the government for more loopholes and ways to avoid paying taxes. When they talk about taxes, they are careful to speak in absolute amounts, not percentages.

In addition to not paying taxes at the same rate as middle- and low-income citizens, the billionaire class extracts money from government through lucrative contracts. The government spends its money in ways that increase the income of ultra-wealthy citizens. Despite the transfer of billions of dollars from the government to private businesses and individuals, there is an expectation that those payments will increase each year, even if that means expanding the government's debt.

The solution proposed is to cut spending on social services. In general, it is easier for wealthy corporations and individuals to profit from specific sectors of the economy, while social services don’t net the enormous profits of military contracts.

What gets lost in all of this is that poverty is very expensive not only for those who are impoverished, but also for society as a whole. When a homeless person gets sick, their only option for health care is a hospital emergency room, which is one of the most expensive systems of health care delivery. Since that person cannot pay, the hospital absorbs the costs and passes them on to patients with insurance. Since insurance companies are for-profit businesses, they pass on the costs to consumers through higher premiums. The total cost of people not having access to family physicians and preventive care far exceeds the cost of offering universal health care. Add to that the simple fact that people without homes get sick more often than those with adequate housing, and guaranteed housing for all would likely produce savings in Medicaid to offset the increased housing subsidies.

Countries around the world are experimenting with a universal basic income. While on the surface it seems like such a program would be costly and result in fewer people working for wages, that is not how it works. People who receive basic income, unlike the billionaire class, spend all of their income. The money circulates throughout the economy.

Ireland conducted a three-year experiment providing basic income to artists, and is now considering making that program permanent. The program produces savings in social services and healthcare. Unlike other governmental programs, unconditional cash transfers to meet basic needs reduce total governmental spending.

In the long run, income inequality results in fewer total resources. When the rich get richer and the poor get poorer, the overall economy stagnates. As millionaires become billionaires and billionaires become trillionaires, less money circulates through the economy. The only way that the ultra-wealthy can continue to increase wealth is for there to be fewer of them.

I’m not an economist and, as I stated at the beginning of this essay, I have no idea what a trillion dollars is. I had the good fortune to live my life with a career in which I was fairly compensated and could afford not only to provide for my family but also to retire with a modest income. I have enough for housing and food. For now, I have enough to pay my health insurance premiums and can afford good care. What is more, it appears that I am happier and more satisfied with my income than the man who is set to receive a trillion-dollar pay package. I certainly don’t want to trade places with him.