The collective wealth of the seven richest Americans, all white males, has now reached roughly $ 1,000 billion. These seven people pay virtually nothing in income tax.
Last April, I reported on another obscene milestone in the concentration of wealth in the United States. At the time, for the very first time, $ 1 trillion was in the pockets of just eight rich guys, a bunch small enough to squeeze into a single SUV.
Now, just four months later, this “trillion dollar club” will soon throw another member to the curb. According to Forbes, America’s collective wealth Seven
the richest white men – Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin and Larry Ellison – stood at $ 996 billion at the end of the day yesterday. The seat of the trillion dollar SUV about to be vacated belongs to Warren Buffett. The deep pockets of the trillion dollar club will soon no longer need his $ 100 billion net worth to earn a trillion. Goodbye, Warren.
Think about it. Only seven guys now control roughly $ 1 trillion in wealth, almost equal to a third of the $ 3.5 trillion package currently before Congress for desperately needed programs that range from dental and vision care for the elderly to credits. from child tax to save millions of families from poverty with measures that can save our planet on fire from climate change.
In other words, the cost of what some denigrate as “unaffordable” social spending for a nation of 330 million people turns out to be barely three times the wealth held by just 0.0000022% of our American population. .
The even deeper connection between the wealth of our “$ 7 trillion” and that $ 3.5 trillion in social spending: Whether this spending becomes reality will likely depend on the votes of so-called political moderates who insist. the fact that the program must be “paid for.” “These same moderates will hold the decisive votes on the” pay fors “proposed by defenders of social spending: an increase in taxes on the very rich in the country, including the seven trillion dollars.
And that brings us back to how we got into this mess in the first place. ProPublica recently exposed what many of us already suspected: Our $ 7 billion – and their fellow billionaires – pay virtually no taxes as a percentage of their actual income. Between 2014 and 2018, America’s top 25 billionaires paid federal income tax over that five-year period equivalent to just 3.4% of the increase in their collective wealth over the same period.
Can we change this dynamic?
Yes, but in order to do this, these moderate politicians will have to agree to put an end to the tax avoidance strategy – “Buy-Borrow-Die” – which allows billionaires and simple super-rich to evade income tax. huge gains they make on their investments. This scam really works very simply. The rich buy an investment or, in the case of the $ 7 trillion, start a business. Then, while their asset appreciates, they never sell. Instead, they borrow against the increased value of their asset whenever they need money. Finally, they die, and each death wipes out the tax payable on all untaxed earnings, sometimes for a lifetime of adulthood.
What makes the Buy-Borrow-Die strategy possible? The gaping gap in our tax law known as the “base plus”. Under this loophole, those who sell inherited property are treated as if they had purchased the property at fair market value on the date of the deceased owner’s death. The bottom line: If Jeff Bezos’ children inherit his Amazon stock, around $ 200 billion in earnings will not be taxed.
Our political leaders have been aware of the reinforced base loophole for decades, but have done nothing while the super-rich used Buy-Borrow-Die to accumulate obscene piles of untaxed wealth.
But the Biden administration is now asking Congress to end the strengthened base to fund the programs we need to move our country forward. Will our legislators now find the courage to tax the seven trillion dollars? Or will our nation’s wealth continue to concentrate – in six trillion dollars?
We’ll find out soon.