The collective fortunes of the seven richest Americans, all of whom are white men, are now just over a trillion dollars. These seven pay practically nothing in income tax.
Last April, I reported on another obscene asset concentration milestone in the US. Back then, for the first time ever, there was a trillion dollar in the pockets of just eight rich guys, a group small enough to squeeze into a single SUV.
Today, barely four months later, this “trillion dollar club” will soon throw another member to the curb. According to Forbes, the collective net worth of America’s seven richest white men – Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin and Larry Ellison – stood at $ 996 billion yesterday. The space in the trillion-dollar SUV that is about to be vacated belongs to Warren Buffett. The trillion-dollar club’s deep pockets will soon no longer need its $ 100 billion net worth to make a trillion. So long, Warren.
Think about it. Only seven men now control about $ 1 trillion in fortunes, a sum equal to nearly a third of the $ 3.5 trillion package now being tabled in Congress for much-needed programs by dental and visual aid for seniors to child tax credits to save millions of families, from poverty to actions that can save our burning planet from climate change.
In other words, the cost of what some call “unaffordable” social spending for a country of 330 million people is barely three times the wealth of just 0.0000022 percent of our US population.
The deeper connection between the wealth of our “trillion dollar seven” and those $ 3.5 trillion in welfare spending: Whether that spending actually becomes a reality is likely to depend on the voices of the so-called political moderates who insist that the program be implemented “Must be paid”. ”These same moderates will hold the deciding vote on the“ pay fors ”proposed by proponents of social spending: raising taxes on the enormously 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 revealed what many of us have already suspected: Our $ 7 trillion – and their billionaires – barely pay taxes as a percentage of their true income. Between 2014 and 2018, America’s top 25 billionaires paid just 3.4 percent of the increase in their collective wealth over the same five-year period.
Can we change this dynamic?
Yes, but to do so, these political moderates must agree to end the tax avoidance strategy – “buy-borrow-die” – which allows billionaires and the merely super-rich to evade taxation on the enormous profits they make on theirs Investments. This scam is really very simple. The rich buy an investment or, in the case of the $ 7 trillion, start a business. Then when their asset goes up, they never sell. Instead, they borrow against the increased value of their assets whenever they need cash. Eventually they die, and with each death the tax liability disappears on all untaxed profits, sometimes for an entire adult life.
What makes the buy-borrow-die strategy possible? The huge loophole in our tax law known as the “tiered base”. Under this loophole, those who sell inherited assets are treated as if they had bought the assets at fair value on the day of the death of the deceased owner. The bottom line: If Jeff Bezos’ children inherit his Amazon stock, about $ 200 billion in profits will not be taxed at all.
Our political leaders have been aware of the worsening base gap for decades but have done nothing while the super-rich are using buy-borrowing dies to amass obscene piles of untaxed wealth.
But the Biden administration is now calling on Congress to end the reinforced base funding the programs we need to move our country forward. Will our lawmakers now have the courage to tax the trillion dollar seven? Or will our nation’s wealth continue to be concentrated – to six trillion dollars?
We’ll know soon.
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