Wednesday, October 31, 2018

Billionaire Bonanza

Amazon CEO Jeff Bezos, Microsoft founder Bill Gates, and financier Warren Buffett own more wealth than the bottom 50 percent of the U.S. combine;

As median household wealth has declined since 1982, the Walton, Koch, and Mars families have seen their wealth grow 6,000 percent;

A full-time Amazon employee would have to work for 2.5 million years to earn $78.5 billion, the amount Bezos made last year alone.

 The Institute for Policy Studies (IPS) published on Tuesday a new report—titled "Billionaire Bonanza 2018: The Role of Dynastic Wealth" (pdf)

A handful of individuals and family dynasties are leaving the rest of the American population with stagnant or falling wages, meager or even negative wealth, and soaring economic insecurity.

"Today's extreme wealth inequality is perhaps greater than any time in American history," Josh Hoxie, a co-author of the report, said in a statement. "This is largely the result of rapidly growing wealth dynasties and a rigged economy that enables the ultra-wealthy to grow their wealth to never-before-seen highs."

IPS found that "seven of the 20 wealthiest members of the Forbes 400 inherited their wealth from previous generations, often through companies founded by their ancestors." 

They include Charles and David Koch of Koch Industries as well as Jim, Alice, and S. Robson Walton of Walmart and Jacqueline and John Mars of the Mars candy empire.  These three "wealth dynasties" own a combined $348.7 billion—over four million times the median wealth of American families.

IPS looked at the 15 wealthiest American families with multiple members on the vaunted Forbes 400 list, it found that the wealth of each of these families "comes from companies started by an earlier generation, either a parent or more distant ancestor. Each of them also represents a wealth dynasty passing generation to generation free from interruption." Combined, these families are worth $618 billion. 

In total, IPS found, "136 out of the 400 members of the Forbes 400 derive their wealth from companies started by an earlier generation. That's 34 percent, or about a third, of the entire list."

"These families have used their wealth and power to lobby and rig the rules to expand their wealth and power," explained Chuck Collins, IPS senior scholar and co-author of the new report.

 IPS argues that "There is now ample evidence that some billionaire families are engaged in aggressive practices to preserve dynastic wealth. These include using their wealth to lobby for tax cuts and public policies that will further enrich their enterprises," the report notes. "They hire armies of tax accountants, wealth managers, and trust lawyers to create trusts, shell corporations, and offshore accounts to move money around and dodge taxation and accountability."

“We are developing into a plutocracy.” These words are not from Bernie Sanders, but Paul Volker, the former chair of the Federal Reserve under both Presidents Jimmy Carter and Ronald Reagan.

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