Previously, I talked about how much money a billionaire could spend and have it feel like a normal person buying a cup of coffee by setting up a thought exercise: on the day you were born, you’re handed a trust fund designed to run out the day you died, 100 years later. Every day of your life, you could spend some of that trust fund, and on the final day, you’d spend the final penny.
Today, let’s talk about what that looks like in annual federal income tax:
| Amount in trust fund | daily “income” | annual “income” | top tax rate (2024) | total tax | relative tax (vs $48,085.00) |
|---|---|---|---|---|---|
| $1 million | $27.38 | $9,993.70 | 10% | $999.37 | 99 times lower |
| $10 million | $273.79 | $99,933.35 | 22% | $12,091.34 | 99 times lower |
| $100 million | $2,737.93 | $999,344.45 | 37% | $295,918.95 | 98 times lower |
| $1 Billion | $27,379.26 | $9,999,999.90 | 37% | $3,626,161.46 | 98 times lower |
| $10 Billion | $273,792.57 | $99,934,288.05 | 37% | $36,901,848.08 | 98 times lower |
| $100 Billion | $2.738 Million | $999.4 million | 37% | $369,704,161.50 | 98 times lower |
| $250 Billion | $6.845 Million | $2.489 billion | 37% | $920,856,161.50 | 98 times lower |
If you earn $250,000 a year, your federal income tax bill is about $48,085.
That’s an effective tax rate of 19.2%.
You’re paying enough to buy that $6.85 Starbucks drink 7,019 times.
In other words, your annual tax bill feels like 20 years of morning coffee.
But people with real money feel the world differently.
To someone with a billion-dollar trust fund, that same tax bill would feel like 2/100ths as much.
Even a $3 million tax payment feels like a fraction of a latte.
And because wealth buys tax codes the way it buys real estate and senators, it never gets more painful than that.
No matter how much they make, their taxes will always feel 98, 99, or 99.9 times easier than yours.
They don’t feel burdened.
They feel barely interrupted.
And these are just the amounts they should pay — under already-friendly tax laws.
But of course, that’s not how it works.
Because when you have that much money, you don’t just hire a good accountant.
You hire the tax code itself.
You don’t pay taxes; you redesign them.
Sometimes, the government even pays you.