We Shouldn't Hate The World's First Trillionaire; We Should Encourage Canadians To Emulate Him

My family ran a number of small businesses when I was growing up in Fort McMurray, Alta., so I learned early on that nobody hands an entrepreneur a paycheque. They put their own capital at risk, work brutal hours and live with the real possibility that it might all come to nothing.

Unfortunately, that is a common result. However, if it works, they build something: jobs, a payroll and a stake in their community. That asymmetry — private risk, uncertain reward — is the engine of every economy worth living in.

I thought about that when Elon Musk became the world’s first trillionaire . Space Exploration Technologies Corp. went public last Friday in the largest initial public offering in history, raising roughly US$75 billion at a valuation near US$2 trillion, pushing Musk’s paper net worth past US$1.1 trillion. Some 4,400 SpaceX employees became instant millionaires on the listing.

You might think the man behind a company that builds reusable rockets, connects remote communities and is reshaping the global auto industry would be grudgingly admired. You would be wrong.

The reaction from the political left was immediate and uniform. The usual suspects sent out messages of a rigged economy , demands for a wealth tax and that the U.S. federal government is for sale .

Here at home, one national newspaper ran an opinion piece under the headline, SpaceX IPO makes Elon Musk the first trillionaire. Here’s how to properly hate him before, later replacing the headline, conceding it did not meet proper editorial standards.

Properly hate him. Reflect on that. A man builds rockets that land themselves and the instinct is to instruct readers in the etiquette of resentment. The replacement headline — asking whether a new trillionaire is “a bad look for capitalism” — was meant to sound reasonable, but it gives the game away more completely than the first.

Its premise is that one person’s success is something the entire system must answer for, which is exactly backwards. Getting astonishingly rich by building things people freely choose to buy is not a bad look for capitalism; it is the whole point of it.

Consider what Musk did. He did not find his US$1 trillion; he created it. SpaceX collapsed the cost of reaching orbit and broke a government-contractor cartel that had grown fat and lazy. Tesla Inc. dragged a century-old industry into the future. A satellite network now connects otherwise non-reachable areas.

Across his companies, he employs more than 100,000 people and supports a vast supplier base. This is not wealth extracted from a fixed pie. It is a bigger pie and everyone who touched it is better off.

You may dislike the man, but the dislike is almost always for his politics or his fortune rather than anything he built. That changes nothing about the work.

It is worth asking what actually drives this negative reaction. Only one part is serious: the worry that concentrated wealth becomes concentrated power, that a trillionaire can buy politicians, platforms and outcomes the rest of us cannot.

Fair enough, but tax policy responses such as a wealth tax make that worse, not better: the more the government can take and redistribute, the more the wealthy will spend to influence where it goes. And the trillionaire, with his lawyers and his exit visa, is the last person such a tax ever catches. The bill lands on the merely rich.

The rest is mood disguised as argument, what Calgary writer Mark Milke of the Aristotle Foundation calls the victim cult : success is treated as evidence of wrongdoing and every outcome as proof of injustice rather than effort. Once that becomes the reflex, wealth itself is suspect and the conclusion arrives before the analysis.

The wealth tax is what that grievance becomes in policy form and it is a bad idea . It is riddled with design problems, starting with how to value assets not yet in cash. It is also easy to escape: capital and its owners simply leave, so it raises little revenue while deterring the capital you want to attract.

Recently, Norway nudged up its wealth tax and watched dozens of its richest citizens head for Switzerland. Those departing taxpayers controlled an estimated US$54 billion of wealth . The result? Less revenue for the treasury, not more. The threat of a billionaires’ tax in California is causing a similar capital flight. In 2021-22, Canada considered introducing a wealth tax before shelving it.

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Wealth is mobile and resentment is not a revenue model.

Countries do not tax their way to prosperity; they prosper by creating the conditions for capital, talent and entrepreneurship to stay, grow and multiply. The real question is not how governments can better redistribute wealth, but how they can help create more of it in the first place.

We do not have a trillionaire problem in Canada; we have the opposite: bleeding capital, talent and ambition across the border. We can learn from Estonia, which has topped the Tax Foundation’s competitiveness ranking for 12 straight years due to a low and simple flat personal income tax , a corporate tax that completely exempts tax on reinvested earnings and only applies when money is extracted from the company, and broad-based use of a consumption tax.

The lesson here is not how to hate the world’s first trillionaire; it is how to become the kind of country where the next one chooses to build here. That starts with a tax system that rewards risk instead of confiscating its rewards — the same bet my family made on small businesses in Fort McMurray — scaled to the heavens.

Teach a generation that success will be punished, and you will get exactly what you encourage: a great deal less of it.

Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.

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