US billionaire wealth skyrocketed 55 percent during pandemic, accelerating inequality
Over the last 14 months of the pandemic, millions of Americans have lost their jobs, health and wealth — and almost 600,000 have lost their lives. At the same time, U.S billionaires and the super-rich have seen their wealth surge to democracy-distorting levels
Between March 18, 2020 and April 15, 2021, the combined wealth of U.S. billionaires increased by $1.6 trillion, a 55 percent increase, according to a joint analysis by Americans for Tax Fairness and the Institute for Policy Studies.
The concentration of wealth is staggering. There are now over 700 billionaires in the U.S., with total wealth of $4.56 trillion, up from $2.9 trillion in March 2020. For perspective, the combined wealth of the bottom half of all U.S. households, including 165 million people, is $2.4 trillion in total wealth, according to the Federal Reserve.
One-third of billionaire wealth gains since 1990 have come during the last 14 months of the pandemic. Between 1990 and April 2021, the combined wealth of U.S. billionaires increased 19-fold, from $240 billion in today’s dollars to $4.56 trillion in April 2021.
- Elon Musk’s wealth grew by a staggering $125 billion, from $24.6 billion on March 18, 2020 to $149.2 billion on May 14, 2021, a six-fold increase, boosted by Tesla stock.
- Jeff Bezo’s wealth grew from $113 billion to $183 billion over the same period, an increase of almost 60 percent.
- Mark Zuckerberg’s wealth grew from $54.7 billion to $109 billion, fueled by his ownership of Facebook.
- Dan Gilbert, chairman of Quicken loans, saw his wealth rocket by over 500 percent, from $6.5 billion in March 2020 to $35.8 billion on May 14, 2021.
Such levels of concentrated wealth and power hurt our market economy and threaten our democracy. For example, many of these billionaires control powerful companies with the ability, especially during the pandemic, to consolidate their market share and monopoly power over large sections of the U.S. and global economy. Amazon, Walmart and Target have all benefitted from having their Main Street competition effectively shuttered under the artificial economic conditions of the pandemic.
The wealthy do not always profit during times of economic adversity. In the aftermath of the 2008 Great Recession, U.S. billionaires saw their fortunes decline along with everyone else. It wasn’t until almost four years later, in September 2012, that the total wealth of the Forbes 400 exceeded its 2007 pre-Great Recession levels.
While some increases in billionaire assets mirror the overall rise in stock markets, the largest gains reflect their ownership stakes in powerful companies that have taken advantage of temporary monopoly and home isolation conditions created by the pandemic. Online retail, restaurant and food delivery apps, telemedicine, big pharma, gaming and video-conferencing have all reaped windfalls from the unusual pandemic economy. Of the roughly 56 new billionaires that emerged over 2020, many are associated with IPOs at companies like DoorDash, AirBnB and Snowflake.
These unseemly inequalities are the context for a debate over who should pay for trillion dollar COVID-19 recovery packages and other proposed investments in public infrastructure, green energy investments, health care, affordable housing and poverty reduction.
Around the world, countries are considering wealth taxes on surging billionaire assets as one source. Argentina and Bolivia are both considering expanded or new wealth taxes to help pay for economic recovery. The UK established a commission to explore a wealth tax.
Times of war and crisis in the U.S. has historically led to the institution of more progressive tax systems, including the “conscription of wealth” to pay the cost of war. In 1862, the U.S. established an inheritance tax to help pay for the Civil War — and levies on inheritances and estates appeared during the Spanish American War and First World War, finally being codified in 1916 with permanent federal income and estate taxes.
Pandemic inequalities may explain the popularity of proposals to restore progressive income and wealth taxes on the very wealthy. Polls indicate tremendous popularity for President Biden’s proposals to ensure that global corporations and the wealthy — those with incomes over $400,000 — pay their fair share.
In 2020, 55 profitable Fortune 500 companies paid no taxes, despite making over $40 billion in profits. Biden’s plan would make sure these corporations pay their fair share by raising the corporate tax rate from 21 percent to 28 percent, still well below the 35 percent rate prior to 2017. He would end the tax breaks that provide a perverse incentive to move jobs abroad.
For these proposals to succeed, lawmakers need to shut down the hidden wealth system for the super-wealthy. Biden is proposing to invest $80 billion over the next decade in enforcement to ensure the multi-millionaires and billionaires cannot play shell games with their taxes.
Looking forward, it is likely we will emerge from the pandemic as a more unequal society. Households that were economically precarious going into the pandemic — with zero or little by way of financial reserves — are even more financially insecure. As eviction moratoriums end, our communities will face epidemics of evictions and foreclosures.
We will also likely see further consolidation of major corporations, as the big fish swallow up the small fish — and Main Street businesses are unable to compete against expanded mega-companies. Lawmakers and the president need to be vigilant and encourage anti-trust and anti-monopoly actions to protect competition and discourage mergers and acquisitions.
As we emerge from the pandemic, we need to prioritize efforts to rebuild Main Street commerce and support the most vulnerable workers who have risked their health providing essential services during the pandemic. We need to make bold public investments paid for by taxes on global corporations and the wealthiest households that have reaped pandemic windfalls.
Our shared recovery is as an opportunity to reduce inequality and protect democratic institutions from democracy-distorting concentrations of wealth.
Chuck Collins is the director of the Program on Inequality at the Institute for Policy Studies where he coedits Inequality.org. He is author of the new book, “The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions.”