Wealth inequality is breaking all records this year, according to newly released data from nonprofit Americans for Tax Fairness. Let’s take a look at what they found out.
Billionaires’ Wealth Surge
It may come as no surprise to many of you, but wealth inequality is getting out of hand. According to a new report by Americans for Tax Fairness (ATF), which analyzed Forbes data, billionaires’ combined wealth has reached new heights.
Over 800 Billionaires in America
America is home to over 800 billionaires – 806 to be precise.
Massive Wealth Accumulation
These affluent tycoons are sitting on a combined treasure chest of $5.8 trillion. That’s more than some countries spend in total per year.
Billionaires’ Wealth Has Doubled Since 2017
$5.8 trillion amounts to roughly $7 billion for each billionaire and is far away from their $2.9 trillion net worth each in 2017.
Tax Reform Impact
Billionaires’ wealth skyrocketed after 2017 saw Trump’s administration pass a slew of tax reforms and cuts that critics argued would only benefit the wealthy.
Fueling the Billionaires’ Fortune
According to research by the nonpartisan Center On Budget and Policy Priorities (CBPP), the critics were correct. Last month, they released a report arguing that the “tax law was skewed to the rich, expensive, and failed to deliver on its promises.”
Perpetual Wealth
Due to current rules, none of this nearly $3 trillion increase in wealth – the primary income source for the ultra-wealthy – may ever be taxed.
Looming Expiration
These Trump-era tax reforms are expiring come 2025, which could lead to a big shakeup in Washington.
Uncertainty Surrounding Trump’s Tax Cuts
The ATF is of the same opinion as the CBPP, that these tax code reforms mostly helped rich people and added a lot of money to the country’s debt – about $2 trillion.
The Average American Paying for the Wealth
Now, Republicans want to make some temporary parts of the law permanent, which could cost Americans another $4 trillion, according to the nonpartisan Committee for a Responsible Federal Budget.
Billionaires vs. the Bottom Half of America
More than 800 billionaires in America now own more money than the entire bottom half of the country, about 65 million households.
Wealth Disparity
The billionaires have $5.8 trillion, while those bottom households have $3.7 trillion. But because of the current tax rules, it’s unlikely that the super-wealthy will ever pay taxes on all that money.
Rapid Wealth Growth
In just over six years, America’s ten wealthiest men have seen their wealth increase by 150%. Nowadays, America’s top 25 billionaires are worth $2.3 trillion, which was the combined value of all 492 American billionaires’ wealth in 2014.
Alarm Bells
According to the ATF’s executive director David Kass, “Billionaire wealth doubling in just over six years is a clear signal that too much of America’s resources are flowing to the super-wealthy.”
Calls to Reevaluate Tax Cuts for the Wealthy
He added, “The last thing we need to do now is permanently extend the Trump tax cuts for the wealthy that are due to expire at the end of next year. Permanent extension of high-end tax cuts would cost trillions of dollars we could invest in working families and communities and would worsen the nation’s economic inequality that the latest billionaire figures so prominently highlight.”
How Billionaires Dodge Taxes
Under the current tax laws, when assets like stocks or property go up in value (called “capital gains”), they’re only taxed when sold.
Capital Gains Loophole
But super-rich people, like billionaires, can cash in on their growing wealth without selling. They can use it to get low-interest loans and live a plush lifestyle without worrying about taxes.
Generational Wealth
And then, when they pass on their riches to their kids, they avoid paying taxes on it altogether.
Political Agenda
Political pundits predict that a number of high-profile Republicans who have been advocating for cuts to Social Security and Medicare, as a means of getting control back over the national debt, will be pushing to extend Trump’s tax rate cuts.
Backlash Brewing
There’s a growing call throughout the nation for policymakers to prioritize the needs of working families and communities over the interests of the wealthy. However, whether policymakers will listen to the call remains to be seen.
The post The Wealth Gap: 800 Billionaires Versus 65 Million Households first appeared on Wealthy Living.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
