Amer­ica’s ‘wealth dy­nas­ties’ are get­ting big­ger

The Progress-Index - - OPINION -

Most peo­ple work hard to pro­vide for their fam­ily hop­ing to gen­er­ate enough money to af­ford the ba­sics. Their only chance at vast for­tune is a lot­tery ticket. For other fam­i­lies, they need only wait pa­tiently for their for­tunes to come — the re­sult of a ge­netic lot­tery they were lucky enough to win.

No fam­ily is wealth­ier than the Wal­tons of Wal­Mart. Sam Wal­ton opened the first Wal-Mart in 1962 in Arkansas af­ter a 20-year ca­reer man­ag­ing stores. Twenty years later, Wal­ton’s for­tune had grown to $690 mil­lion, ac­cord­ing to the first Forbes 400 list­ing of the wealth­i­est in­di­vid­u­als in the coun­try in 1982. Ad­just­ing for in­fla­tion, that fig­ure rises to $1.81 bil­lion in 2018 dol­lars.

A gen­er­a­tion later, Sam Wal­ton has long since passed, while the Wal­ton fam­ily for­tune has bal­looned. It now boasts not one, but seven mem­bers of the Forbes 400, with a com­bined fam­ily worth of $169.7 bil­lion.

In other words, the Wal­ton fam­ily saw their wealth rise by more than 9,000 per­cent over the course of a gen­er­a­tion. And for the heirs of Sam Wal­ton, their only real con­tri­bu­tion to gen­er­at­ing this for­tune has been hard wait­ing, not hard work­ing.

That was just one find­ing in a new re­port I coau­thored for the In­sti­tute for Pol­icy Stud­ies. We found that wealth dy­nas­ties like the Wal­tons now loom more dra­mat­i­cally over or­di­nary Amer­i­cans than ever. The re­port finds that dy­nas­tic wealth­i­est fam­i­lies with mul­ti­ple mem­bers of the Forbes 400 — the Wal­ton, the Koch and the Mars fam­i­lies — have seen their wealth in­crease nearly 6,000 per­cent since 1982. Mean­while, me­dian house­hold wealth went down by 3 per­cent, af­ter ad­just­ing for in­fla­tion.

These three wealth dy­nas­ties own a com­bined for­tune of $348.7 bil­lion. That’s more than 4 mil­lion times the me­dian wealth of U.S. fam­i­lies, about $80,000.

De­spite mas­sive in­creases in pro­duc­tiv­ity and eco­nomic growth, just gen­er­at­ing enough money to af­ford a house, health care, chil­dren’s ed­u­ca­tion, food and maybe an oc­ca­sional va­ca­tion is no small feat for mid­dle earn­ers in the United States. One in five fam­i­lies has zero or neg­a­tive wealth. Two in five Amer­i­cans couldn’t come up with $400 if they needed it in an emer­gency.

And that’s just the mid­dle. Af­ter a tour of the United States last year, U.N. ex­treme poverty rap­por­teur Philip Al­ston re­ported: “About 40 mil­lion (Amer­i­cans) live in poverty, 18.5 mil­lion in ex­treme poverty, and 5.3 mil­lion live in Third World con­di­tions of ab­so­lute poverty.”

Mean­while, the ul­tra­wealthy break new records year af­ter year. In just the past year, the global wealth of bil­lion­aires jumped 20 per­cent, ac­cord­ing to a new re­port from the Swiss bank UBS.

We can’t sep­a­rate the ever-con­cen­trat­ing wealth of the ul­tra-rich from the de­clin­ing eco­nomic re­al­i­ties of the rest of us. Each year, a greater part of our col­lec­tive trea­sure finds its way into a smaller and smaller num­ber of hands.

This isn’t news to the Wal-Mart em­ploy­ees who strug­gle to get by on wages be­low the cost of liv­ing, which of­ten re­quires them to rely on pub­lic as­sis­tance pro­grams de­spite work­ing full time. It’s also not lost on Ama­zon em­ploy­ees who, even at their re­cently in­creased wage of $15 an hour, would need to toil for 2.5 mil­lion years to make what Ama­zon founder Jeff Be­zos — the rich­est man in the world — made last year alone.

The United State is in des­per­ate need of pub­lic pol­icy to ad­dress the grow­ing cri­sis of wealth in­equal­ity. With a bil­lion­aire in the White House, whose wealth de­pended on a mas­sive fam­ily in­her­i­tance, it’s un­likely such so­lu­tions will come from the top.

How­ever, the poli­cies ex­ist. A smart step for­ward would be in­sti­tut­ing a fed­eral wealth tax. A mod­est 1 per­cent tax on as­sets above $20 mil­lion would raise an es­ti­mated $1.9 tril­lion over 10 years, which could be in­vested in gen­er­at­ing eco­nomic op­por­tu­ni­ties for low-wealth fam­i­lies. An­other good idea is to tax large in­her­i­tances — ge­netic lot­tery win­nings, re­ally — as or­di­nary in­come.

Why should heirs and heiresses like Paris Hil­ton pay less taxes than work­ers? Why shouldn’t we as a coun­try de­mand an end to sky­rock­et­ing in­equal­ity, and take ac­tion to bring about that end?

Josh Hoxie, di­rec­tor Project on Tax­a­tion and Op­por­tu­nity In­sti­tute for Pol­icy Stud­ies Wash­ing­ton, D.C.

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