The wealth of America's three richest families grew by 6,000% since 1982
S E E D E D C O N T E N T
It hardly makes news any more that the US is becoming an extremely unequal country.
Each year new eye-popping statistics juxtapose the reality of decades of stagnant wages for half the country’s workers with today’s extreme concentrations of wealth and power.
The top three wealthiest billionaires in the US – Jeff Bezos, Bill Gates and Warren Buffett – now have as much wealth as the bottom half of the US population combined.
This is possible because the bottom fifth of US households are underwater, with zero or negative net worth. And the next fifth has so few assets to fall back on that they live in fear of destitution.
“We’re developing into a plutocracy,” said the former Federal Reserve chairman Paul Volcker .
One troubling indicator that we are drifting toward a society governed by the wealthy is the expanding fortunes of multi-generational wealth dynasties.
The three wealthiest US families are the Waltons of Walmart, the Mars candy family and the Koch brothers, heirs to the country’s second largest private company, the energy conglomerate Koch Industries. These are all enterprises built by the grandparents and parents of today’s wealthy heirs and heiresses.
These three families own a combined fortune of $348.7bn, which is 4m times the median wealth of a US family.
Since 1982, these three families have seen their wealth increase nearly 6,000%, factoring in inflation. Meanwhile, the median household wealth went down 3% over the same period.
The dynastic wealth of the Walton family grew from $690m in 1982 (or $1.81bn in 2018 dollars) to $169.7bn in 2018, a mind-numbing increase of more than 9,000%.
This isn’t the normal physics of wealth in the US, where we’ve traditionally abhorred the idea of hereditary wealth and power. Since 1900, most grand fortunes have been dispersed by the time the great-grandchildren come around – hence the old adage : “Shirtsleeves to shirtsleeves in three generations.”
Usually wealth diminishes over multiple generations, as money is spent, passed down to heirs, given to charity and paid in taxes. Only when families aggressively intervene to arrest this cycle does wealth continue to expand over multiple generations, even as the number of heirs increases.
Several dynastic families have used their considerable clout to stage just such an intervention, spending millions to save themselves billions.
They’ve lobbied Congress to tip the rules in favor of dynastic wealth, including tax cuts and public policies that will further enrich their enterprises. In the early 2000s, the Mars, Walton and Gallo families actively lobbied to abolish the federal estate tax, a tax paid exclusively by multimillionaires and billionaires. The Koch brothers have since organized their famous donor network to lobby for tax cuts for the rich and to roll back regulations on the energy industry, the source of their wealth.
Others aggressively use dynasty protection techniques to hide wealth and transfer it to heirs. 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.
For example, the casino magnate Sheldon Adelson , number 15 on the Forbes 400 list, has used complicated trust mechanisms to pass on $7.9bn to his children while avoiding $2.8bn in gift and estate taxation. Adelson recently broke spending records on midterm elections, with more than $100m in campaign donations.
Not all the wealthy are focused on hoarding for the next generation. Warren Buffett, the third-wealthiest person on the Forbes list, decided not to give his children his immense wealth. Instead, he pledged his entire fortune to charity and contributing to the public good through paying taxes.
Instead of lobbying for tax cuts, Buffett testified before Congress in favor of expanded estate taxation. “Dynastic wealth, the enemy of a meritocracy, is on the rise,” Buffett told lawmakers years ago . “Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy.”
In the face of weakened tax laws and aggressive wealth hiding, we’re facing the emergence of widespread wealth dynasties. The French economist Thomas Piketty has warned that if we don’t intervene to reverse these dynamics, we’re moving toward a “ patrimonial capitalism ”, where the heirs of today’s billionaires will dominate our politics, culture, philanthropy and economy.
That’s a world none of us will want to be part of.
Chuck Collins is a co-author of the report Billionaire Bonanza 2018: Inherited Wealth Dynasties in the 21st Century United States. He directs the Program on Inequality at the Institute for Policy Studies and co-edits Inequality.org
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The top three wealthiest billionaires in the US – Jeff Bezos, Bill Gates and Warren Buffett – now have as much wealth as the bottom half of the US population combined.
These three families above are pretty wealthy also. Most of the really rich in the US are Democrats and liberals. What should be done about it?
Neither political party is mentioned in the seed. Why do you bring one up?
This isn't "party politics". It is social dynamics. Political policy, from political parties, can only be developed after there is a minimum of consensus about what is going on.
Just trying to fair and balanced. Both sides have rich people. So what?
And what, in you mind, is "going on"? If this is a national problem, what is the remedy?
I'm the Seeder. I presented an article to talk about. My own thoughts may come later, but the seed should take precedence.
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I guess I just learned not to try to defuse a situation.
Lesson learned.
The rich get richer, the poor get poorer.
Yep, And he who holds the gold makes the rules. But ya gotta admit this information is scarry.
another subject I was gonna kick down the road....lol
My problem is not with the rich getting richer. My problem is with the second part of your citation:
My problem is not with the rich getting richer. My problem is with the second part of your citation:
I agree, If my wealth increased nearly 6,000%, Since 1982, along side of the wealthiest I'd be OK with that.
otherwise WE are seriously falling behind by the numbers presented in this seed.
It very well may have. It's not an outrageous rate of return.
It very well may have. It's not an outrageous rate of return.
That was only 30 years ago, I know I did not gain no 6000 % of what I had 30 years ago.
If my math is correct that would turn $100.000.00 into $6,000,000,00 I feel I'm a little short.
I will admit my math kinda sucks so I may be wrong though. If I'm correct like I said I'm a tad short on that 6000 % increase. Maybe a couple of tads even....lol
It's a little more than a 12% return, assuming you're not adding new investment along the way.
There probably 30 mutual funds that have earned that over that period.
That just doesn't sound right.
a $100.000 mortgage @12% for 30 y$ears is only a total repayment of $370,300.53
The interest doesn't work the same way on a loan as it does an investment.
Take the original $100k. Multiply time 1.12 raised to the 36th power. (It's actually been 36 years)
lol
Sorry cant do that.
2x2=4
then nada
lol
Excuse, man we had good drugs at our high school !
Plenty of booze as well. And teachers cars that needed repairs more than students needing an education. I guess they figured if we needed to know math we could go count the corn stalks. They probably still do there. LOL
ya sure?
I found this:
$100,000 Savings Calculator - Future Value of 100,000
and the calculator this:
Sure. Use that calculator thing. Plug in $100k, 12.05% and 36 years. $100k turns into just over $6 million.
Yep we're gettin fucked then. Cause I sure as hell didn't get that kind of a bump in my wealth in the last 30 years. Not even close.
It's been that way since antiquity. Not everyone can be wealthy. The poor will always be with us.
Soon we will be ruled again by the wealthy. The shortsighted do not understand how this will impact our country and future generations.
Fools
It looks like we failed our great experiment.
Mine has grown by a little more than that.
I knew Sam Walton. Sam never imagined each of his kids being about twenty five times richer than The Queen of friggin Engand. The problem is not that people making $250,000 a year pay too little. They do not. They pay through the nose. The problem is that tax code, particullarly US tax code since the dollar predominates, has allowed mere handfuls of people to own pretty much all (99%+) of the wealth in the whole world. We are moving into the realm of trillionaires. Putin and Besos made being mere multibillionaires passe. The greed of The Few is stifling the world's economic potential. As Bill Clinton keeps tring to remind us, "Economics Is Just Math". The current math is not working because 99.9% of the World's total wealth is hoarded in a few accounts with astronomical numbers while hard working tax paying people are systematically fleeced. I know the concept of wealth redistribution has been demonized but it already happened and it all went into The Few's greedy hands.,.
Does punctuation trigger you? Why don't you explain why it is bullshit?
What in hell does that even mean? If you are casting shade instead of explaining yourself then I guess you must be incapable of doing so...
The problem is that the people who care about this think it's a problem with the tax code.
It isn't.
It's a problem with the educational system, which teaches (badly) things like polynomials, or pottery instead of how to manage money. Becoming a millionaire really isn't remotely complicated, but if nobody's ever taught you the steps, it seems like going to Mars.
This isn’t a right/left issue. I don’t know what else to say to you except it’s serious.
Since 1981 our wealth has been systematically transferred to The Few. "FIDELIO"...
Well what have you been doing to accumulate your own wealth during that time?
On a side issue that is related to the article, (Bob may judge it off topic!) Mars is the best chocolate bar on earth. Their success is not surprising.