Rep. Alexandria Ocasio-Cortez (D-NY) kicked off a storm when she said in a podcast interview last week that a person cannot “earn” a billion dollars.

Republican Sen. Ted Cruz of Texas responded by saying that the statement was “bizarrely foolish” and then pointed to the worst possible example he could think of to counter Ocasio-Cortez’s point: mega-billionaire Elon Musk.

In the eyes of the US government, and specifically the IRS, there’s no question about it. Elon Musk did not “earn” his wealth. Otherwise, he’d be paying a tax rate at least 17 times greater than he is—and generating a tax bill bigger than the GDP of Nevada.

Unless you’re immortal, Ocasio-Cortez is indeed correct that it’s impossible to earn a billion dollars.

The average US worker, earning $64,505 a year, would have to work over 15,500 years to “earn” a billion dollars. Want to be as rich as Elon Musk? You’d have to work 41 times longer than humans existed—over 12 million years.

But what if you are Elon Musk? How long would it you take then? A billion years to earn a billion dollars, and 800 billion years to earn $800 billion—so, 58 times longer than the existence of the known universe.

The average US worker, earning $64,505 a year, would have to work over 15,500 years to “earn” a billion dollars. Want to be as rich as Elon Musk? You’d have to work 41 times longer than humans existed—over 12 million years.

Elon Musk—like Mark Zuckerburg, Larry Elison and many of the world’s other richest men—only “earns” $1 a year. He is what's known as a $1 CEO because he gets paid an annual salary of $1.

What most people don’t realize when we talk about wealth and wealth taxes is that we’re talking about two types of wealth. There’s earned wealth, which is when you get paid for you what you do (eg salaries, wages, etc). And then there’s collected wealth, which is when you get paid for what you own—eg dividends for owning stocks or rent money for owning real estate.

Most people primarily rely on earned wealth for a living. Billionaires on the other hand, their wealth is almost entirely collected wealth.

And that matters, because collected wealth tends to grow a lot faster than earned wealth, but more importantly, because governments tend to tax collected wealth a lot less than earned wealth.

In fact, billionaires very often deliberately reshuffle their wealth around into collected types of wealth specifically to underreport what they “earn” to the IRS and pay less income tax. It’s why Elon Musk can be the........

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