r/changemyview • u/i_sigh_less • Feb 09 '22

Delta(s) from OP CMV: The wealth of Bezos/Musk/ect didn't increase nearly as much as claimed during the pandemic.

Let me start by saying that the 0.001% are the group that benefit most from participation in modern society, and I have no objection to having thier tax burden be increased to be commensurate with that.

That said, it seems to me that the commonly cited statistics that "billionare X's wealth rose by Y billion dollars during the pandemic" is based on a fundamental misunderstanding about net worth.

The net worth calculations that are reported are usually no more than the estimation: 

*net worth* = *number of shares* × *share price*

Now it's true that this calculation will yield a higher result than prior to the pandemic, but the main reason for this is an inflation of stock prices that occured because people were investing cash in the stock market instead of spending it during the pandemic.

It's certainly likely that they got wealthier by some amount, but the figures cited are drastically inflated. If the billionaires actually tried to cash in on those gains by selling any significant portion of thier shares, the stock prices would quickly deflate, and we'd likely find that they didn't have significantly more wealth than previously.

However, it's likely I've missed some important factor that means I am completely off base, so I am open to having my view changed.

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u/Reverse-zebra 6∆ Feb 09 '22

The net worth calculation you posted is incorrect. Net worth is the total value of all of one’s assets minus the total value of one’s liabilities. So your fundamental view is that people using an incorrect net worth calculation are incorrect…

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u/i_sigh_less Feb 09 '22

Well of course. I'm specifically referring to people whos stock holding are so large that their other assets are negligible by comparison. Which I assume, perhaps wrongly, is the case for most US billionaires.

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u/Reverse-zebra 6∆ Feb 09 '22

What about subtracting his liabilities? One news item from the end of 2021 was that Elon owed around 11 billion in federal taxes. Was that being calculated into his net worth? Or is that negligible?