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extreme wealth
Testimony to UN Panel: 'Tax the Rich. Save the World'
"When too much money turns into too much power, it threatens us all," said Patriotic Millionaires president Erica Payne.
Mar 20, 2024
The founder of a group of millionaires that campaigns for a more progressive and just tax system said during a United Nations hearing on Tuesday that governments must increase taxes on the rich before it is too late to rescue democracy from the corrosive impacts of wealth concentration.
Failure to do so, warned Patriotic Millionaires president Erica Payne, "will not end well for anyone, including millionaires."
"This is not an act of kindness or of philanthropy," Payne said during a special meeting of the U.N. Economic and Social Council. "It is in our own self-interest. The far-right is on the rise around the world. If we do not address the twin crises of wealth concentration and inequality, we will face in the next decade the wholesale dismantling and eventual death of liberal democracy, of justice, and of basic human freedom."
Watch Payne's remarks in full:
Patriotic Millionaires, which has chapters in both the United States and United Kingdom, released survey results earlier this year showing that nearly three-quarters of millionaires in G20 countries support higher taxes on extreme wealth to improve key public services and address cost-of-living crises.
Additionally, the poll found that a majority of respondents see the vast accumulation of wealth at the very top as a threat to democracy.
Payne said Tuesday that "nearly 1,000 millionaires from across the globe have joined us in calling on governments to tax extreme wealth." In recent decades, top marginal tax rates around the world have plummeted, allowing the ultra-rich to amass eye-popping fortunes that they have used to impose their will on political processes and policy debates.
"Since 2020, five billionaires have doubled their wealth, while five billion of the poorest people in this world got even poorer. Children starve while billionaires fly their rockets into space," Payne said. "You may not care how much money a person has, but you likely do care how much power someone has. When too much money turns into too much power, it threatens us all."
"The single only way to preserve the chance of freedom and democracy, the only way to save this planet and humanity, is to tax extreme wealth."
Payne argued that "there are no benevolent billionaires" or "public-minded plutocrats" and implored policymakers to weigh the potentially disastrous consequences of not taxing extreme wealth, in addition to considering how and how much the rich should be taxed.
"The single only way to preserve the chance of freedom and democracy, the only way to save this planet and humanity, is to tax extreme wealth," said Payne. "Yes, the math might be a little complicated. I trust you all can figure that out. The principle itself is not complicated. Tax the rich. Save the world. It is that simple."
Payne's remarks came a day after an Institute for Policy Studies analysis of Forbes data found that the collective fortunes of U.S. billionaires have grown by nearly 88% to $5.5 trillion over the past four years.
On Tuesday, a group of congressional Democrats introduced legislation that would tax U.S. fortunes over $50 million.
Patriotic Millionaires was among the organizations that endorsed the bill, titled the Ultra-Millionaire Tax Act. Morris Pearl, the chair of the group, said in a statement that "contrary to popular belief, billionaires and millionaires like me do not amass such extraordinarily large fortunes because we work harder or because we are more talented than Americans who work for a living."
"Instead, it's because we rigged the tax code so that wealthy people like us who make most of our money off our assets pay next to nothing—or sometimes literally nothing—in taxes," said Pearl. "The Ultra-Millionaire Tax will be an important first step in requiring the rich to finally start paying their rightful share in taxes, thus reining in the destabilizing level of economic inequality that plagues our country and threatens our democracy."
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The US Leads the World in Millionaires, but the Wealth Is Not Trickling Down
The spectacular wealth of America’s wealthy is paying no great dividends for average Americans; those dividends are funneling instead to the top of the U.S. economic ladder.
Aug 21, 2023
Five-star hotels. So yesterday. Today’s super rich, The Wall Street Journalreports, are picking palatial luxury villas over swanky suites when they need a quick pick-me-up.
Italy, France, and Greece currently offer the widest array of villa options, but Portugal seems to be catching up fast. So many options!
How can our deepest pockets find the right one? A “high-end travel consultant,” the Robb Report on luxury living points out, can identify just the perfect villa vacation. The cost for joining the circle that can access one top consultant’s advice: $25,000 in annual fees on top of a $150,000 joining fee.
The world’s distribution of wealth remains remarkably top-heavy. Individuals with less than $10,000 to their name—52.5% of the world’s adult population—hold just 1.2% of the world’s assets.
The cost of actually renting a high-end villa? The realtor agency Oliver’s Travels was offering at one point this summer three dozen villas renting for over $130,000 a week.
How many people on our Earth today can afford to put down—without batting an eye—that sort of cash? Some of our best annual stats on our global super rich have been coming out, over recent years, from the Swiss banking giant Credit Suisse. But this fabled 167-year-old institution stumbled royally during the pandemic and, earlier this year, ended up the property of its Swiss rival UBS.
UBS, fortunately, has opted to continue Credit Suisse’s annual Global Wealth Report tradition, and the 2023 edition—covering data through 2022—has just appeared. As usual, this annual report’s release has enjoyed substantial media coverage worldwide, especially in the business press.
Most all the latest coverage has generally emphasized the news in the 2023 report’s opening lines. As one typical headline, from Bloomberg, reads: “Global Wealth Fell Last Year for First Time Since 2008.”
Wealth per global adult, the new Global Wealth Report does indeed show, fell by 3.6% in 2022. But most of that decline, the report goes on to add, “came from the appreciation of the U.S. dollar against many other currencies.” Hold those exchange rates constant and the story changes. Wealth per adult increases by 2.2%.
This year’s Global Wealth Report actually has a much more important story to tell than the global wealth per adult, and the global media coverage has by and large missed it. That story: The world’s distribution of wealth remains remarkably top-heavy. Individuals with less than $10,000 to their name—52.5% of the world’s adult population—hold just 1.2% of the world’s assets.
Those numbers almost exactly reverse at the other end of the Credit Suisse Research Institute’s “global wealth pyramid.” The 1.1% of the global adult population worth over $1 million individually holds 45.8% of the world’s wealth.
One nation—the United States—is driving this incredibly top-heavy statistical picture. Some 38% of the world’s millionaires call the USA home. China, the next largest contributor to the global millionaire population, claims just 11%. Japan and France, the next two highest millionaire manufacturers, each claim only 5% of our globe’s at least seven-digit set.
Worldwide, about a quarter-million individuals—243,060, to be exact—qualify for Credit Suisse’s more exclusive “ultra-high-net-worth” status. These ultras each hold at least $50 million in personal wealth, and over half of them, 51%, hail from the United States. That U.S. ultra-rich share nearly quadruples China’s ultra-rich population, the world’s second largest.
America’s richest of the rich, in short, dominate the ranks of our global deep-pockets. But the rest of us Americans, cheerleaders for our rich love to assure us, have no cause for unease about that domination. The more wealth that America’s wealthy accumulate, their reasoning goes, the more our rich can invest in creating better futures for ordinary working Americans.
The latest Credit Suisse numbers totally undercut that claim. In other developed nations—societies with the rich holding significantly smaller shares of their national wealth than in the United States—typical people have seen substantially greater growth rates in their personal wealth.
Back in the year 2000, the typical American had a net worth of $46,479. The typical net worth of French adults that year: $51,360. By the end of 2022, the typical French adult held $145,591 in personal wealth. The typical—median—U.S. adult wealth last year: just $107.739. Over that same two-decade-plus span, the typical Dutch median net worth jumped from $44,513 to $120,270, the typical Canadian from $37,295 to $143,862.
The spectacular wealth of America’s wealthy, in other words, is paying no great dividends for average Americans. Those dividends are funneling instead to the top of the U.S. economic ladder.
Just one final illustrative example of that dynamic from the new 2023 Global Wealth Report: Japan’s top 1 percenters hold 18.8% of their nation’s wealth. The U.S. top 1% wealth share? Almost twice as much: 34.2%.
Japan’s most typical adults, meanwhile, hold personal net worths of $124,258, some 15% higher than the $107,739 U.S. wealth median.
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The US Could Soon Have Its First Trillionaire. That's No Cause for Celebration
We should be fearing, not cheering, the prospect of an American trillionaire.
May 28, 2023
It’s been a full decade now since I first predicted — warned, to be a bit more precise — that America would have its first trillionaire before 2040.
I stand by that warning today. Unfortunately, everything I said ten years ago has aged well. Too well. I explained back then how tax policy was supercharging the accumulation of obscene fortunes in America. Policymakers, I noted, had lifted the lid on wealth accumulation by decreasing taxes on inheritances and income from capital. That policy failure would go on to become substantially worse in 2017 with the passage of the Tax Cuts and Jobs Act.
Others would see this same ominous trend. In an interview with CNBC, several experts recognized the distinct possibility the world would have its first trillionaire by 2039, the year CNBC would turn 50. They offered various explanations for how that would happen, with most of them agreeing it would “take several Bill Gates-like successes from one individual to reach the trillion-dollar mark.”
I saw things differently, telling CNBC: “It might take the founder of five of today’s Microsofts to reach a trillion, but we’re going to see larger and larger Microsofts.”
More recently, the idea that a larger Microsoft would deliver our first billionaire has gained traction. Three years ago, USA Today reported on predictions that Amazon would raise Jeff Bezos’ wealth to trillionaire level as early as 2026.
Those predictions have turned out to be a bit aggressive — Bezos’ wealth climb has leveled off — but they may have been beneficial in an odd way. Historically, far too many Americans have looked at billionaire wealth the way they look at sports, as I noted in 2014:
The super-rich are setting new records, $10 billion, $50 billion, and soon enough $100 billion. Rather than objecting, our nation celebrates the increasingly obscene fortunes of the super-rich as we do athletes breaking sports records.
Reaching $1 trillion will be what hitting 73 home runs was before we knew Barry Bonds cheated to get there.
Will our first trillion-dollar fortune also be tainted by misdeeds of the achiever? Could that be what finally wakes us from our slumber?
In 2020, with Americans dying in large numbers from the pandemic, Bezos had become to billionaire wealth hoarding what Barry Bonds had become to home run records. As noted by USA Today, the reporting on Bezos becoming the first trillionaire occurred when Amazon workers were publicly protesting over safety issues.
Which caused the appropriate response to his predicted trillionaire status — anger — at least on Twitter. One tweet disdainfully noted: “Jeff Bezos will sometime in the near future have more money than the Netherlands. Totally normal. Nothing out of order here.” Another considered a headline announcing Bezos’ impending trillionaire status the most “disgusting and disturbing” he’d seen.
The reaction to trillionaire talk three years ago, unfortunately, may have been an anomaly, not the turning point I hoped it would be.
A case in point: The Motley Fool, a financial and investing advice company, has recently been promoting investment in a corporation it suggests could be as large as 17 Amazons, with a market capitalization of $17 trillion, an accumulation that would create the world’s first trillionaire. The promotional material doesn’t give the name of the corporation. To find it, you’d at least need to provide an email address, which would mean lots of unwanted promotional emails. Apparently, this corporation has technology that could supercharge artificial intelligence, or AI.
But the identity of that corporation — or the founder who stands to become the first trillionaire — isn’t the point here. After all, absent significant reform of America’s tax policy, we will see our first trillionaire, probably not much more than a decade from now.
Worse, too many folks may think that would be a good thing. In its promotional ad, Motley Fool gushes over how excited the prospect of a $17 trillion corporation headed by a trillionaire has investors, as if the super-rich becoming richer rates as a good thing in and of itself.
Most troubling: Motley Fool is using the prospect of someone achieving a net worth over $1 trillion as a selling point. This sort of advertising works because we have millions of investors out there who emulate the billionaire class.
Which brings us back to tax policy. Halting, then reversing, the obscene concentration of wealth in America will require Americans in overwhelming numbers demanding real tax reform. Without that tax reform, the concentration of wealth will worsen and, before we know it, we’ll see the arrival of our first trillionaire. And as our concentration of wealth worsens, the political power of billionaires will only continue to increase.
We’ll never have the collective mentality, as a nation, to take on the ultra-rich if millions of Americans identify with them and see the chase to become the first trillionaire the same way they see a football team’s pursuit of an undefeated season. We see this same identification in the response of everyday Americans to estate tax reform. In large numbers, many Americans oppose the estate tax because they think it will apply to them one day.
To be sure, many Americans do understand the perils of concentrated wealth. But to make real progress on tax reform, we need more than a bare majority of Americans opposing extreme wealth concentration and supporting higher taxation of the rich. We need to reach the point where for every average American citizen who sees billionaires as role models, another ten see them as the wealth hoarders they are.
Which means we should be fearing, not cheering, the prospect of an American trillionaire.
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