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redistribution of wealth
Mega-Billionaires and the Gushing Upward Redistribution of Wealth
So how much is a $100 billion anyway?
Mar 30, 2022
The word "billionaire" didn't even exist until 1844. Fifty years later, we got "multibillionaire." And for the next 127 years, that was enough.
But in 2020, while the working class faced near-record unemployment during the pandemic, the wealthiest Americans faced a different problem. Some of them had gotten so rich, there was no longer a word to describe just how rich they were.
That's why I want to bring you one of the newest additions to the English language: "centibillionaires," people with $100 billion or more.
What's it like being one of history's first centibillionaires? It's hard to even imagine, but let's try it by comparing them to the less fortunate. By which I mean just ... regular ... billionaires.
If you're a regular billionaire, you can afford a private jet. If you're a centibillionaire, you can afford a brand-new Gulfstream jet every single day for more than ten years. (Not sure what you'd do with a new Gulfstream every day -- maybe give one to each of your closest 4,000 friends?)
A regular billionaire would struggle to buy their own professional baseball team. Sad, I know. But a centibillionaire could easily buy every team in the entire major league.
If you're a regular billionaire, you can donate to your alma mater and get your name on a building. If you're a centibillionaire, you could single-handedly give every teacher in America an $8,000 raise for 5 straight years.
Of course, that's not all you could do. $100 billion is enough to wipe out all the medical debt in the United States. Or provide permanent shelter for every homeless person in America. Or buy Covid-19 vaccines for the entire world.
Basically what I'm saying is, $100 billion is a lot of money.
More than two and a half million times what the average American worker makes in a year.
So here's the big question. Are these centibillionaires so rich because they work two and half million times harder than the average American? Are they really 100 times smarter than the typical billionaire?
I don't think so. The reason for the rise of centibillionaires is that for decades, wealth hasn't trickled down, it's gushed up, all the way to the very top.
That's not an accident. As it turns out, the system that the super-rich themselves carefully crafted and lobbied for, benefits... the rich!
And while you may not own more private jets than your average centibillionaire, you probably do pay a higher tax rate. And thanks to legal loopholes and the Trump tax cuts, when the wealthiest Americans die, they get to pass on most of their centibillions to their kids tax-free.
We've got two choices as a country. We can tax the richest Americans fairly, and invest that money in ways that benefit all of us.
Or we can keep doing what we're doing, and watch as centibillionaires get even richer while the rest of us get left behind.
If you think wealth and power are too concentrated in the hands of a privileged few now, just imagine what a few more years of trickle-down nonsense will bring.
Of course, it won't be all bad. At least "trillionaire" is easy to say.
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How to Redistribute Wealth--Without the Guillotine
We can't just tax billionaires’ paychecks. We should tax the wealth they've already amassed.
Apr 28, 2016
I stumbled into the crowded bookstore on a cold winter day a few years ago, rushing to catch a glimpse of the author speaking in the back. As is my custom, I was late and his speech was well underway.
The question and answer began and someone in the crowd asked something I hear often at events like this one: "Don't you get tired of banging your head against the wall? Is there any room for hope?" The speaker laughed a bit before responding quite seriously that he was indeed quite hopeful. Things may look hopeless in the very near term, but the change he's talking about takes decades.
The author was Gar Alperovitz, speaking about his most recent book, What Then Must We Do? The line is one he's repeated often--and one that's stuck with me ever since: If you're in the business of social change, you have to think in terms of decades.
It's with this lesson in mind that we should consider taking on one of the most pressing problems of our time: wealth inequality. The problem with wealth inequality, after all, isn't simply that it's been growing steadily over the past 30 years. The problem is that it's showing no signs of stopping in the near or distant future.
And things are going to get worse.
The Long View
Short of an all-out, torches-and-pitchforks revolt, reducing structural inequality means going through the legislative process--most particularly, reforming the tax code. But with an intransigent Republican Congress, a campaign-finance system dominated by wealthy donors, and a dispirited and deeply divided public, it's clear that legislative change isn't going to come soon.
That places us in what Alperovitz calls "pre-history." We have to lay the foundation for change without knowing when it will come.
His heroes, Alperovitz says, are the civil rights workers of the 1930s and '40s. They took on insurmountable odds--as well as serious personal risk--to lay the groundwork for what would become the very successful civil rights movement of the 1960s. They knew they might never see the fruits of their labor--Jim Crow and its supporters in Washington seemed impossibly entrenched--but their efforts made it possible for success in the unknowable future.
With the benefit of this long view, we can look past election cycles to see what solutions would actually solve our serious problems. On wealth inequality, that means a direct tax on concentrated wealth.
We shouldn't just tax billionaires' paychecks, in other words. We need to tax the wealth they've already amassed. That idea isn't going to clear Congress anytime soon. But it's just as serious, reasonable, and likely to become law as any other genuine solution.
A Precarious New Era
To understand why we need to tax wealth, we first need to get sense of what makes modern wealth inequality different from the inequality of previous eras. Just how unequal are we?
For starters, the United States leads the planet in billionaires. In fact, we have more billionaires than the next five countries combined. According to numbers my colleague Chuck Collins and I crunched, the 400 wealthiest Americans now own more wealth than the entire GDP of India, a nation of nearly 1.3 billion people. And the 20 wealthiest Americans alone--a group small enough to fit on a private jet--are richer than the bottom half of Americans combined.
Wealth concentration is commonly encapsulated by the duality of the 99 percent vs. the 1 percent, the now famous framing advanced by Occupy Wall Street. But a more accurate distinction is between the 99.9 percent and 0.1 percent. This tiny group--the top one-tenth of 1 percent--now owns about as much wealth as the bottom 90 percent of the country combined. That's a bigger share than at any time since the Gilded Age of the 1920s.
On the other end of the economic spectrum, a survey late last year found that most Americans have less than $1,000 in their checking and savings accounts combined. If they slip on the sidewalk or their car engine light comes on, they can literally be left penniless.
When you factor in race, things look even worse. Across nearly every household economic indicator--from home ownership to retirement savings to income, wealth, and debt--black and Latino families lag behind white families. White families control 10 times more wealth than Latino families and 13 times more wealth than black families.
Wealth is the safety net that enables families to live without fear of a bump in the road--a missed paycheck, a reduced schedule at work, a busted water heater--sending them into destitution. Wealth is security. And without it, millions of families lead perilous and precarious lives.
The Promised Land
A small number of Americans are unfathomably secure, while more and more of us are slipping into permanent precariousness. But it's worse than just that.
Research across several disciplines has shown that extreme inequality undermines democracy, social cohesion, and economic stability. A recent New York Times study revealed that just 158 families contributed half of the early contributions to the candidates in this presidential election cycle. Do we really live in a democracy when such a small group is able to wield so much influence?
Inequality is also destroying our health. According to public health researcher Richard Wilkinson, you're better off living in a community with greater equality, even when the overall standard of living is lower than in a more unequal community. That's because inequality has been linked to a host of negative health outcomes--including heart disease, asthma, mental illness, and cancer--for everyone in unequal societies, not just those at the bottom. Infant mortality, for instance, in the United States is double the rate seen in Japan or Sweden, significantly less unequal countries, for everyone--not just those at the bottom.
Make no mistake, the negative impact of inequality still impacts the poor more than the rich. A recent study showed low-income men live 15 years less than wealthy men. The disparity for women is 10 years. As Wilkinson points out, "greater equality makes most the difference at the bottom, but has some benefits even at the top."
Beneath this theft of our health and democratic ideals is a more fundamental pathology: Inequality demolishes our basic idea of fairness. Many of us like to associate wealth with hard work--that's the American Dream, right? But it's a lie.
Today, the strongest indicator that you'll amass lot of wealth in your lifetime is being born into a family with a lot of wealth. In fact, soaring inequality has made the United States among the least socially mobile developed countries in the world. Children born to a typical middle-income family today are less likely to earn more money than their parents did.
If you're not wealthy but aspire to the American Dream--saving money, building a home, paying for college, retiring before you die--you're better off living in Canada.
This is a grim new reality for white Americans who grew up during the vast expansion of the middle class after World War II. It's not so new for millions of people of color, who continue to be systematically blocked from rising into the ranks of the middle class.
An Alternative to the Guillotine
OK, so inequality is a problem. How do we solve it?
Not by poking around the margins. Slight adjustments to tax rates or child-care tax credits might ease the pain, but they won't cure the disease.
Throughout history, as Thomas Piketty discovered from digging through centuries of tax data in Capital in the Twenty-First Century, serious wealth stockpiles have only ever been shaken loose in times of intense catastrophe--like wars and reconstruction. While it's true that inequality has been reduced in the past, it's never been done without a massive war and subsequent economic disruption.
Piketty points to a tax on wealth--not just the money people make, but the money they already have--as the least disruptive way to bring down spiraling inequality.
I, for one, am not eager to see the return of the guillotine. Fortunately, there's a more peaceful option. Piketty points to a tax on wealth--not just the money people make, but the money they already have--as the least disruptive way to bring down spiraling inequality.
In fact, Piketty's idea isn't new. Veteran wealth tracker and economist Edward Wolff penned an article in 1996 calling for a direct tax on concentrated wealth. Other proposals are older still. Yet the idea was met with bemused scorn by the Very Serious People who guard mainstream political thought in policymaking circles.
This reaction appears incredibly shortsighted--and it wouldn't be the first time conventional ideology turned out to be wrong in the long run of history.
The Rumblings of History
Consider a flat, 1 percent wealth tax levied exclusively on the wealthiest 1 percent of households.
The top 1 percent controls 42 percent of the nation's household wealth, about $26 trillion in total. In its simplest form, a 1 percent tax would raise $260 billion annually--more than the federal government now spends on education and environmental protection combined.
Because most money managers are able to deliver investment returns greater than 1 percent, the impact on those taxed would be negligible. Of course, implementing a progressive wealth tax with even higher rates on the 0.1 percent could yield more revenue still.
Taxing wealth directly strikes at the heart of the problem Piketty describes using his mountain of historical tax data: Capital, left unchecked, will inevitably concentrate at the very top. That's why other solutions won't solve the problem, and why the push for a significant tax on wealth is worth digging into for the long haul.
The seeds of this movement are already beginning to sprout, not least in the surprising success of Bernie Sanders's presidential campaign.
Even if the Vermont senator ultimately comes up short against Hillary Clinton, he's mobilized millions of supporters who view taxing the wealthy as a means to fund programs that could greatly improve their lives--like debt-free college and early child care. Those ideas are popular even among Clinton supporters, and Sanders's overwhelming support from younger voters--GOP consultant Frank Luntz calls millennials "frighteningly liberal"--means they're not going away anytime soon.
There's a tectonic shift underway on the politics of inequality. Even if the wealthy interests that control Congress haven't fallen yet, they're surely starting to feel the rumblings--and, if we start putting more cracks in the political fortress they've built for themselves, we may yet shake history loose in our lifetimes.
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Robin Hood in Reverse: Climate Change Takes from Poor, Gives to Rich
A new study finds that climate change is triggering a massive reallocation of resources to the world's wealthiest countries
Feb 24, 2016
A warming climate is exacerbating global inequality by pushing critical natural resources, such as fish stocks, away from impoverished equatorial regions and making them more exploitable by the wealthy, according to a study released on Wednesday.
While the gap between the rich and poor in the U.S. and worldwide has expanded at a mind-boggling pace in recent decades, the new study, designed by scientists at Princeton, Rutgers, Yale, and Arizona State, shows that the frightening speed with which the globe is warming will only compound the economic trend.
The study looked specifically at fish to better understand the phenomenon.
"We tend to think of climate change as just a problem of physics and biology," Malin Pinsky, professor of ecology and evolution at Rutgers, explained to Rutgers Today. "But people react to climate change as well, and at the moment, we don't understand the impacts of human behavior on natural resources affected by climate change."
To examine those impacts, Pinsky told the newspaper that "[w]hat we find is that natural resources like fish are being pushed around by climate change and that changes who gets access to them."
The study, published in the journal Nature Climate Change, looked at what the authors call "inclusive wealth," or the "sum of a community's capital assets."
Rutgers Today reports that the researchers examined natural resources such as fish and forests, a community's infrastructure—buildings, roads, factories—and its population's education level and health.
The newspaper wrote:
Pinsky reports that the stronger and more conservation-oriented a community's natural resource management, the higher the value it places on its natural resources, whether those resources are increasing or diminishing. If wealthier communities and countries are more likely to have strong resource management, these wealthy groups are more likely to benefit, thus exacerbating inequality.
The study used data collected by Pinsky in his studies of fish migration and applied a mathematical formula created by Yale University economist Eli Fenichel to illustrate the connection between the migration of natural resources and the migration of wealth. The scientists created two fictitious fishery-dependent communities, Northport and Southport, and used Fenichel's formula to examine future interactions between them and their fish stocks.
The findings also echo the changes and depletion reported by commercial and Indigenous fisheries worldwide.
The researchers observed that "a changing climate can reallocate natural capital, change the value of all forms of capital, and lead to mass redistribution of wealth."
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