June, 16 2021, 07:57am EDT
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New Report: Silver Spoon Oligarchs: How America's 50 Largest Inherited-Wealth Dynasties Accelerate Inequality
Together 50 families hold about half of the wealth of the bottom half of all U.S.households, an estimated 65 million families, and their wealth grew at ten times the rate of ordinary families during the last 40 years.
WASHINGTON
A new report from the Institute for Policy Studies (IPS) finds that the U.S. continues to suffer from the extreme and growing wealth and power of inherited-wealth family dynasties - and the growth of their extreme wealth accelerated during the pandemic.
The report, "Silver Spoon Oligarchs: How America's 50 Largest Inherited-Wealth Dynasties Accelerate Inequality," tracked the 50 wealthiest families from 1983 to 2020 using data from Forbes. IPS researchers found that by 2020, the 50 families had amassed $1.2 trillion in assets. For the 27 families on the Forbes 400 list in 1983, their combined wealth had grown by 1,007 percent and for the five wealthiest dynastic families, their wealth increased by a median 2,484 percent during 37 years. The Walton family led the pack with an increase of 4,320 percent, while the Mars candy family saw its wealth increase 3,517 percent.
"When we focus on the surging fortunes of first-generation billionaires - and their shocking tax avoidance - we forget to look at the troubling growth of dynastic families and the changes in tax policies that will enable the children of today's billionaires to become tomorrow's oligarchs," said Chuck Collins, co-author of the report and author of the new book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions.
"In a healthy democratic society with a functioning tax system, wealth disperses over decades as people have children, pay their taxes, and give to charity. But with a weak tax system on wealth - as confirmed by the recent leak showing low billionaire taxes - we are now seeing wealth accelerate over generations, leading to consolidated wealth and power," he said.
The report finds that inherited wealth dynasties are growing due to an inadequate tax system, excessive hiding of wealth in dynasty trusts, and low charitable giving by multi-generational wealth dynasties. It also finds that members of the inherited wealth generation are using their wealth and power to rig the rules to get more wealth and power. Some are even using their charitable donations and political giving to press for lower taxes.
Other key findings from the report include:
Dynastic wealth grows much faster than the wealth of ordinary families. The 27 families who were on the Forbes 400 list in 1983 had a median increase in their net worth, adjusted for inflation, of 904 percent over those 37 years. In contrast, between 1989 and 2019--the most recent year available--the wealth of the typical family in the U.S. increased by just 93 percent in inflation-adjusted dollars.
The wealth of the very top grew even faster. The five wealthiest dynastic families in the US have seen their wealth increase by a median 2,484 percent from 1983 to 2020. For example:
In 1983, Wal-Mart founder Sam Walton and his children were worth just $2.15 billion (or $5.6 billion in 2020 dollars). By the end of 2020, Walton's descendants had a combined net worth of over $247 billion, an inflation-adjusted increase of 4,320 percent.
The Mars candy dynasty has seen its wealth increase 3,517 percent over the past 37 years, from $2.6 billion in 1983 (in 2020 dollars) to $94 billion by 2020. The Mars family also stands out for the miniscule amount of money they have stored in family foundations--$48 million as of 2018--in contrast to the large sums they have spent on public policy advocacy to change tax laws.
Cosmetics magnate Estee Lauder and her descendants have seen their wealth grow from just $1.6 billion in 1983 (in 2020 dollars) to $40 billion in 2020. This is a growth rate of 2,465 percent. A hefty portion of that growth has come in just the past five years: the Lauder family's assets have grown 119 percent since 2015, for an average growth rate of 16.9 percent each year.
Dynastic wealth is persistent and consolidating. Of the 20 wealthiest families on the list in 2020, 13 were already in the top 20 in 1983. Only 4 of the top 20 wealth dynasties are new to the list since 1983.
Wealth for dynastic families has grown significantly during the COVID-19 pandemic. Since the start of the pandemic in March 2020, the top 10 families on the Forbes dynasty list have had a median growth in their net worth of 25 percent.
Dynastically wealthy families wield a great deal of political power, and use it to further their interests. The report profiles dynastic family members who spend millions lobbying for favorable tax, labor, and trade policies, give to candidates, campaigns and PACs, serve on policy advisory boards; and even serve in government themselves. For example, members of the Busch, Mars, Koch, and Walton families have together spent more than $120 million over the past ten years on lobbying directly for tax, labor, and trade policies favorable to their businesses and investments.
Dynastic families exploit their philanthropic power too, through charities and foundations. The report examined more than 248 foundations set up by the top 50 families, housing more than $51 billion in assets. While many move much-needed revenue to broader public interest charities, others fund groups working to reduce taxes on the wealthy and roll back regulations that constrain corporate profits. Some funnel millions to donor-advised funds, which can fund dark-money political advocacy. And in a few cases, family members have used them to compensate themselves.
The report profiles all of the 50 families, including the Waltons, the Kochs, the Mars family, and many others, some well-known and some relatively unknown. The report explains the dangers from the extreme consolidation of dynastic wealth and power with sections such as:
The dangers of dynastic wealth accumulation
Immense and tenacious fortunes
The political power of wealth dynasties
Philanthropy as an extension of dynastic power
The dynastiesThat might have been
A section of the report entitled, The Six Habits of Highly-Entrenched Dynasties, details how family dynasties hoard and protect their fortunes from taxes:
Defeat any attempt to raise taxes on the wealthy
Don't give away too much to charity
Form a family office to sequester wealth
Create dynasty trusts and other loopholes to avoid estate and gift taxation (See the IPS Briefing Paper: "Dynasty Trusts: How the Wealthy Shield Trillions from Taxation Onshore.")
Use your wealth to promote self-serving public policy
Weaponize your charitable giving to advance your dynastic interests
Solutions to the consolidated wealth and power examined in the report include:
Existing Proposals:
Greater oversight and enforcement by the IRS
Emergency pandemic wealth tax
Annual wealth tax
Millionaire surtax
Progressive estate tax
Inheritance tax on heirs
State level estate and wealth taxes
New Proposals in the Report:
Establish a federal rule against perpetuities
Outlaw certain types of trusts
Step up administrative actions by the executive branch
The report concludes:
"These trends are alarming for the health of a republic that aspires to widely held prosperity and opportunity. If we stay on our current trajectory, families of inherited wealth will exert ever more control over public policy and the public pocketbook. But we can choose to move in a new direction: to enact economic policies that strengthen society as a whole, ensuring equal opportunity and dignity for all, not just the very few."
This report follows regular analyses from IPS on billionaire wealth gains during the pandemic, CEO pay, philanthropic giving and the racial wealth divide. In addition, recent reports have covered billionaire landlords and billionaire owners of companies with essential workers during the pandemic.
Institute for Policy Studies turns Ideas into Action for Peace, Justice and the Environment. We strengthen social movements with independent research, visionary thinking, and links to the grassroots, scholars and elected officials. I.F. Stone once called IPS "the think tank for the rest of us." Since 1963, we have empowered people to build healthy and democratic societies in communities, the US, and the world. Click here to learn more, or read the latest below.
LATEST NEWS
Planned Parenthood Warns House GOP Appropriations Bills Attack Global Health
The "slate of dangerous and unpopular provisions" includes "eliminating the Title X family planning program and reinstating the Trump-era expanded global gag rule."
Jul 01, 2024
As the Republican majority in the U.S. House of Representatives uses the appropriations process to promote the GOP agenda ahead of the November elections, Planned Parenthood Action Fund on Monday highlighted how the spending bills attack health within and beyond the United States.
"Once again, anti-abortion rights politicians in Congress are manipulating the federal appropriations process to push for a recycled slate of dangerous and unpopular provisions to block access to sexual and reproductive healthcare across the country and around the world," states the new PPFA memo.
The PPFA document details anti-health policies in spending legislation for fiscal year 2025 that House Republicans have advanced recently, which include provisions "eliminating the Title X family planning program and reinstating the Trump-era expanded global gag rule."
The global gag rule bars U.S. government funding for foreign groups that provide information, referrals, or services for abortion care, or advocate for decriminalization or increasing access. It was initially implemented by former Republican President Ronald Reagan as the Mexico City policy, then reinstated and expanded by former President Donald Trump.
"In all, anti-abortion rights politicians continue to act in defiance of the vast majority of their constituents who believe that the government has no right to control people's personal healthcare decisions with attacks on abortion, birth control, and gender-affirming care."
Despite Trump's ongoing legal battles, he is the presumptive Republican nominee to face Democratic President Joe Biden in November. Biden rescinded his predecessor's gag rule shortly after taking office in 2021. Reproductive freedom has been a key issue in not only that contest but races at all levels of U.S. politics this cycle, as GOP policymakers and candidates have set their sights on abortion care, birth control, and in vitro fertilization.
The gag rule was included in the appropriations bill for the Department of State, foreign operations, and related programs, which the House on Friday passed 212-200. The only Democrat who voted in favor was Rep. Marie Gluesenkamp Perez of Washington—who supports reproductive rights and has shared her own abortion story.
That bill would also "cap funding for international family planning and reproductive health programs at $461 million, a nearly 25% cut," and end funding for United Nations entities including the U.N. Population Fund, as the PPFA memo notes. It would also "restrict information about and access to gender-affirming care," and "maintain the Helms Amendment in addition to restrictions on abortion coverage for Peace Corps volunteers."
Speaking out against the legislation last week, Rep. Rosa DeLauro (D-Conn.), ranking member of the House Appropriations Committee, said that "much like last year, the fiscal year 2025 state and foreign operations bill resurrects the doomed isolationism of the early 20th century."
"For the sake of our national security, women's health globally, and our response to the climate crisis, Republicans must abandon this reckless and partisan path and join Democrats at the table to govern," declared DeLauro, who raised the alarm about House GOP appropriations proposals throughout June.
Taking aim at the labor, health and human services, and education legislation last week, she said that "in keeping with the majority's other partisan bills, this bill is chock full of dozens of poison pill riders, including multiple provisions that attack women's freedom and block abortion and reproductive healthcare services."
Specifically, as the PPFA memo points out, it would interfere with postgraduate training in abortion care, impose the Hyde and Weldon amendments, restrict access to gender-affirming care, block Biden administration executive orders intended to boost abortion care access in the wake of Dobbs v. Jackson Women's Health Organization, and eliminate funding for Title X family planning and teen pregnancy prevention programs while pouring money into abstinence-only-until-marriage initiatives.
It would also "defund" Planned Parenthood, preventing people in communities across the United States—particularly in rural and medically underserved areas—from accessing services including sexually transmitted infection testing and treatment, cancer screenings, and birth control, as the memo outlines.
The recently introduced commerce, justice, and science bill would block most federal prisoners from attaining abortion coverage and prevent the U.S. Department of Justice from suing state or local governments over anti-choice laws, according to the memo. The financial services and general government legislation would reverse a District of Columbia law protecting workers from being fired for their reproductive healthcare choices, bar D.C. from using local funds to cover abortion care, and ban Federal Employee Health Benefits Program coverage of most abortions.
"In all, anti-abortion rights politicians continue to act in defiance of the vast majority of their constituents who believe that the government has no right to control people's personal healthcare decisions with attacks on abortion, birth control, and gender-affirming care," the publication states.
The document also targets provisions in multiple recently passed spending bills focused on homeland security, the Pentagon, and veterans—including attacks on abortion and gender-affirming care for current and former service members and their families as well as anyone in U.S. Immigration and Customs Enforcement custody.
"Anti-abortion rights lawmakers recently included similar measures in the National Defense Authorization Act (NDAA)—an annual must-pass bill," the memo highlights.
"Everyone deserves access to abortion and gender-affirming care, including service members and their families. But these lawmakers would rather play games with our fundamental rights in their attempt to control our bodies, lives, and futures."
After the mid-June NDAA vote, PPFA president Alexis McGill Johnson said that "it's like Groundhog Day. Anti-abortion rights House members use must-pass bills as a vehicle to force through their deeply unpopular and dangerous agenda—again and again and again. Everyone deserves access to abortion and gender-affirming care, including service members and their families. But these lawmakers would rather play games with our fundamental rights in their attempt to control our bodies, lives, and futures."
The NDAA and spending bills aren't expected to pass the Senate—which is narrowly controlled by Democrats—in their current forms, but they send a message about what Republicans would prioritize if they fully reclaimed Congress and the White House.
"The majority's policy riders do not belong in appropriations bills, and like last year, we will defeat them," DeLauro said last month. "But it is disappointing that we are going through this charade again, just months after Republicans and Democrats voted for the 2024 appropriations bills."
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"Our chance to finally achieve fair maps in Ohio is just around the corner," said one supporter of the proposed constitutional amendment.
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The campaign for an Ohio ballot measure for a state constitutional amendment to end gerrymandering has collected more than 730,000 signatures, according to the initiative's organizers.
The Citizens Not Politicians campaign said it delivered 731,306 signatures to the office of Ohio's secretary of state in Columbus on Monday, significantly more than the 413,487 valid signatures needed to qualify for November's ballot.
If approved, the Citizens Not Politicians Amendment will:
- Create the 15-member Ohio Citizens Redistricting Commission made up of Republican, Democratic, and Independent citizens who broadly represent the different geographic areas and demographics of the state;
- Ban current or former politicians, political party officials, and lobbyists from sitting on the commission;
- Require fair and impartial districts by making it unconstitutional to draw voting districts that discriminate against or favor any political party or individual politician; and
- Require the commission to operate under an open and independent process.
Nearly 100 organizations, businesses, and thought leaders across Ohio are supporting the amendment. If the measure is certified for November's ballot and approved by voters, the new commission could draw maps for use as soon as the 2026 elections. Seven other states have similar independent commissions: Arizona, California, Colorado, Idaho, Michigan, Montana, and Washington.
After the delivery, hundreds of campaign staff, volunteers, and supporters rallied in the Statehouse Atrium to celebrate their achievement and send a message to gerrymandering politicians.
"This is our house, the people's house, and with today's signature turn-in, we move one giant step closer to ensuring that the citizens decide who serves here, not the politicians who just scheme and rig the game to stay in power," said retired Ohio Supreme Court Chief Justice Maureen O'Connor, a Republican who helped write the amendment. "This constitutional amendment will restore power to Ohio citizens and take it away from the self-serving politicians and their lobbyist friends and big-money donors."
Ted Linscott, a retired bricklayer from Appalachian Ohio, said: "Where I come from, we believe in fairness and working together to do what's right. For too long, career politicians and their lobbyist friends have manipulated our districts to serve their interests. It's time we put an end to this. We need a system that is open, transparent, and fair."
According to the Citizens Not Politicians campaign:
Nationally, Ohio is recognized as one of the worst states for gerrymandering, undermining proportional representation and leading to political stagnation and ineffective policy.
More than 9 million Ohioans, or 77% of the state population, live in districts where one party has a severe advantage in the 2024 Ohio House of Representatives elections, according to an analysis by the Brennan Center for Justice at the NYU School of Law.
"In my work for voter access and education, I have seen firsthand how gerrymandering creates a Legislature that is ineffective and unresponsive to the needs of Ohio voters," amendment supporter Tucker Sutherland said. "They don't have to care what we think because they draw themselves into cozy districts where they often don't even face opposition for reelection."
Equal Districts, a coalition of 30 advocacy groups,
said on social media that "our chance to finally achieve fair maps in Ohio is just around the corner."
"Let's end gerrymandering in Ohio," the group added.
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Jul 01, 2024
Railword Workers United and a Brown University fellow on Monday published a white paper calling for the institution of a public rail system to replace America's corporate railroad giants.
The 110-page white paper, written by Brown University undergraduate Maddock Thomas and published as part of RWU's Public Rail Now campaign, argues that U.S. railroad corporations such as BNSF, Union Pacific, Norfolk Southern, and CSX have failed on safety, workers' rights, service, electrification, and expanding capacity to meet rising freight demand.
Instead of using profits to invest in critical infrastructure, the railroads have lined shareholder pockets with dividends and buybacks, Thomas wrote, advocating for a public system where that money could be spent to improve safety and decarbonize freight transport, among other goals.
Thomas M. Hanna, research director at the Democracy Collaborative, called for democratic, public ownership of railroads in a Public Rail Now statement.
"At a time when we need it most, our nation's rail system is in disarray," Hanna said. "Dominated by a small group of giant for-profit companies, it is imperiling the health and safety of workers and communities, providing poor service for customers, abandoning growth and development, and stalling the expansion of passenger rail services."
"These lands were given under a promise of providing a 'public highway' operated in the public interest, a deal that today's Class 1s have inherited along with their predecessors' easements... Perhaps it is time for Congress to retake control of our public rights-of-way."
The frequency of rail accidents rose by 28% between 2013 and 2022, which many critics attribute to the Precision Scheduled Railroading system that's become the industry standard. Thomas wrote that the system prioritizes "speed over safety."
Despite the alarming trend, the industry has lobbied against safety-minded legislation such as the Railway Accountability Act proposed by senators last year following a disastrous derailment in East Palestine, Ohio. The industry pushed against reforms strongly in the year after the disaster and that lobbying has continued in recent months, according toJacobin.
The current system has led to precarity and difficulty for railway workers. The number of jobs in the industry has gone down over the last 10 years, with nearly 30% of workers having been laid off since 2015, Thomas found. Railway workers also face tough conditions, with unpredictable schedules and forced overtime—some of the subjects of a 2022 labor dispute that ended with the controversial intervention of President Joe Biden.
The white paper emphasizes the underinvestment that private rail ownership has allowed. The U.S. Department of Transportation estimates that rail freight will nearly double by 2035. This growing demand has long been understood, but not acted on. A 2008 report commissioned by the Surface Transportation Board, a federal agency, found that the aforementioned major rail companies—called "Class 1" railroads—needed to spend $135 billion by 2035 to build up infrastructure to meet incoming demand.
They did not, the white paper says.
"Instead, the Class 1s spent $196 billion on buybacks and dividends for shareholders between 2010 and 2020," Thomas wrote.
Thomas presented a historical case for public rail. In the late 1800s, hundreds of millions of acres of public land, as well as other subsidies, were granted to railroad companies on the condition that their services benefited the public. Thomas wrote that the land grants were provided with the understanding that the railways would be like public highways, and that the federal government to this day "retains a reversionary interest of ownership and control" over the rights-of-way.
"There is a compelling case that every railroad that sits on a right-of-way granted from Congress merely possesses an easement over public land," he wrote. "Furthermore, Congress reserved the right to 'add to, alter, amend' the terms of its land grants. Ultimately, these lands were given under a promise of providing a 'public highway' operated in the public interest, a deal that today's Class 1s have inherited along with their predecessors' easements. One might argue that the Class 1s failed to live up to this deal and that perhaps it is time for Congress to retake control of our public rights-of-way."
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