Self-made billionaires including Jeff Bezos and Elon Musk have made huge profits during the Covid-19 pandemic, but new report shows it’s impossible to beat family money when it comes to to become – and to stay – really, really rich.
Ten of the richest families in the United States, including the Walmart family and the dynasties behind industries such as candy and cosmetics, also saw their assets swell during the pandemic, with a shared increase in their combined net worth. over $ 136 billion in 14 months, according to a report by the Institute for Policy Studies (IPS) published Wednesday.
The report, Silver Spoon Oligarchs, details how these families not only increased their wealth to billions over the past year, but also worked to ensure the system sustains this exponential growth over the decades.
Chuck Collins, co-author of the report and director of IPS, said: âIf the system works as it should, we shouldn’t see wealth accelerate over generations, it should disperse.
In 1983, the Walton family, whose patriarch Sam Walton founded Walmart, was worth $ 2.15 billion (or $ 5.6 billion in 2020 dollars). At the end of 2020, Walton’s descendants had a combined net worth of over $ 247 billion, an inflation-adjusted increase of 4,320%.
The family behind some of America’s favorite treats, the Mars family, also enjoyed a sweet return to their fortunes, increasing their family wealth by 28% or $ 21 billion from March 2020 to May 2021.
The Mars Dynasty began in 1911, when Franklin and Ethel Mars opened a candy factory that grew to produce bestsellers such as Milky Way and Snickers in the 1920s and 1930s. Today it is run by their descendants.
In 2020, their family’s wealth was $ 94 billion, according to the Forbes Billion-Dollar Dynasties List magazine, which was a key resource for the report. IPS compared the information from the 2020 list to a similar list published by Forbes in 1983 and adjusted that information to reflect what it would be in today’s dollars.
Between 1983 and 2020, the wealth of the Mars family increased by 3,517%, from $ 2.6 billion to $ 94 billion. They were one of 27 families to be on Forbes lists in 1983 and 2020, and together, the combined assets of these families have grown 1,007% in 37 years.
Even among the super rich, income inequality is a problem. The very, very rich did even better than their less wealthy cohorts. The five richest dynastic families in the United States saw their wealth increase by a median of 2,484% from 1983 to 2020.
The numbers for an average American family are a blip in comparison. From 1989 to 2019, the most recent year for which data is available, the median wealth of a typical family increased by 93% adjusted for inflation, according to the report.
Collins, director of the IPS Program on Inequalities and the Common Good, said these families were not only making more money, they were also improving themselves to put it out of tax reach.
The report describes six “strong dynasty habits,” which include limiting charitable giving and tax avoidance through tools such as dynasty trusts, which protect the ultra-rich from being taxed. on money transfers over a long period.
Another habit is to fight tax increases for the rich. The Mars family company, Mars Inc, has spent more than $ 20 million over the past 10 years on lobbying, including $ 720,000 in 2020 on “issues related to inheritance tax reform and donations, âaccording to the report.
The report described several proposals already under consideration to curb this accumulation of wealth, including the Make Billionaires Pay Act, a proposal put forward by several senators to institute a single pandemic wealth tax of 60% on the earnings of billionaires in 2020. There is also a renewed push to increase funding for the notoriously underfunded Internal Revenue Service (IRS) as well as other efforts to increase inheritance and estate taxes.
But even with the proposals, more needs to be done, Collins said, to close tax loopholes, offshore tax havens and certain types of trusts that allow families to hide their wealth.
âThere is a pretty powerful wealth defense industry that has a vested interest in keeping this dynasty system growing,â Collins said.
Last week again, a survey by ProPublica revealed that the 25 richest Americans paid a “real tax rate” of just 3.4% between 2014 and 2018, despite increasing their collective net worth of more than $ 400 billion during the same period.
“One of the reasons we should be worried about the publication of ProPublica, the amount of tax evasion, is that maybe a piece will end up in philanthropy, but most of it will be passed down from generation to generation,” Collin said. “So, in a sense, they’re setting up the next generation of inherited wealth dynasties.”