America's billionaires are worth a record $6T. Where does that leave the rest of us?

America’s billionaires are worth a record $6T. Where does that leave the rest of us?

Posted by author July 19, 2024 Jobs

America’s billionaires are worth a record T. Where does that leave the rest of us?

America’s billionaires are now collectively worth a record $6 trillion. Their wealth has more than doubled since the passage of the landmark Tax Cuts and Jobs Act in 2017.

Is that good news, or bad? It depends on whom you ask.

The analysis comes from Americans for Tax Fairness, a left-leaning nonprofit that advocates for wealthy Americans to pay their fair share.

Progressive tax groups contend Donald Trump’s 2017 tax cuts will cost the nation $1.9 trillion in lost revenue over 10 years, citing research by the Congressional Budget Office. They say extending the cuts, as Trump proposes, would cost another $400 billion a year starting in 2027.

“When you have just a handful of people with this much money, I think it distorts our democracy,” said David Kass, executive director of Americans for Tax Fairness.

Advocates for the Trump tax cuts say lower taxes boost the economy, create jobs and put more dollars in everyone’s pockets.

According to the federal Survey of Consumer Finances, even the poorest one-fifth of Americans are wealthier now than in 2017. That group, measured by income, saw median net worth double from $8,000 to $17,000 between 2016 and 2022.

The billionaire’s report presumes “that the growth in the wealth of the very richest comes at the expense of everyone else. And that’s not how the economy really works,” said Kyle Pomerleau, a senior fellow at the right-leaning American Enterprise Institute.

800 billionaires hold more wealth than half of the nation

Progressives counter that wealth is increasingly concentrated among the wealthy. The nation’s roughly 800 billionaires now hold 3.8% of U.S. wealth, according to Americans for Tax Fairness, while the bottom half of American families control only 2.5%.

“Wealth inequality in our country is staggering and just growing worse,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. “To me, that wealth inequality creates a lot of social problems. Those who have can call the shots, and those who don’t have to struggle to get by.”

The group’s report, titled The Billionaire Century and released on July 11, draws from an analysis of Forbes data on billionaires.

Trump tax cuts in 2017 delivered big savings to the wealthy

Trump enacted sweeping tax cuts in 2017. Billed as the largest tax overhaul in three decades, the Tax Cuts and Jobs Act lowered taxes across the board. Some of the cuts delivered big savings to the wealthy:

◾ The top individual tax rate, for the highest earners, dropped from 39.6% to 37%.

◾ The wealth threshold for paying estate taxes doubled from $5.5 million to $11.2 million.

◾ The corporate tax rate dropped from 35% to 21%.

◾ A new deduction reduced taxes by up to 20% for pass-through businesses, such as partnerships and sole proprietorships.

The wealthiest Americans benefit from other tax breaks that predate the Trump presidency.

For example, when well-heeled investors sell a long-held asset, such as a property or stock shares, they typically pay a maximum capital gains tax of 20%, which is far below the 37% top tax rate on personal income. The capital gains tax rate has been comparatively low for decades.

Trump, Biden walk different paths on tax cuts

Trump has vowed to double down on his tax cuts, which largely expire in 2025 if he wins the election in November. President Joe Biden has pledged to extend some of the cuts but to raise taxes on wealthy individuals and corporations.

Biden would hike the corporate income tax rate from 21% to 28% and would raise the top individual income-tax rate back to 39.6%. He would boost capital gains taxes for high earners.

All told, Biden’s 2025 budget would raise tax revenue by at least $3.4 trillion over 10 years, according to an analysis by the nonprofit Tax Foundation.

In his first term as president, Biden has trod carefully on taxation, pledging a crackdown on wealthy tax cheats and tax-evading corporations while promising not to raise taxes on anyone earning less than $400,000 a year.

Earlier this month, the Biden administration announced it had recovered $1 billion in past-due taxes from high-wealth Americans. The effort focused on taxpayers with more than $1 million in income and more than $250,000 in documented tax debt.

Economists across the ideological spectrum have faulted both parties for their aversion to raising taxes. The nation faces a $1.27 trillion budget deficit in fiscal year 2024, a yawning gap between spending and revenues.

“There’s this kind of myth out there that there’s disagreement between the parties over tax increases,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, in a May interview with USA TODAY. “The reality is that one party, the Republicans, don’t want to raise taxes on anybody, and the other party, the Democrats, don’t want to raise taxes on 98% of the people, and that’s just a terrible situation to be in.”

More: A strong economy means more Americans are earning $400K. What’s it mean for their taxes?

Celebrity billionaires have amassed eye-popping wealth

Celebrity billionaires have amassed eye-popping wealth over the last eight years, doubling their collective net worth from $2.9 trillion in 2017 to $6 trillion in 2024, according to the Americans for Tax Fairness analysis.

The typical billionaire near the top of the list is “not merely somebody who’s well-off. It’s somebody who has the resources of a small nation,” said Joe Hughes, a senior policy analyst at the left-leaning Institute on Taxation and Economic Policy.

Here’s a roundup of the Top 10:

Elon Musk (Tesla): Net worth rose from $20 billion in 2017 to $258 billion in 2024
Jeff Bezos (Amazon): Net worth rose from $83 billion to $216 billion
Mark Zuckerberg (Facebook): Net worth rose from $72 billion to $187 billion
Larry Ellison (Oracle): Net worth rose from $61 billion to $177 billion
Larry Page (Google): Net worth rose from $46 billion to $157 billion
Sergey Brin (Google): Net worth rose from $45 billion to $151 billion
Bill Gates (Microsoft): Net worth rose from $90 billion to $136 billion
Steve Ballmer (Microsoft): Net worth rose from $35 billion to $135 billion
Warren Buffett (Berkshire Hathaway): Net worth rose from $81 billion to $131 billion
Jensen Huang (NVIDIA): Net worth rose from $5 billion to $118 billion