How rich have America’s richest become? These days, we like to think we know the answer. After all, we get from investigators at ‘Forbes’ every fall a detailed annual list of the fortunes of America’s richest 400. And ‘Forbes’ also publishes an annual list of the world’s billionaires – a scorecard Americans dominate – as well as a ‘real-time’ list of billionaire fortunes based on daily stock trading.
Our wealth stats don’t end there. Business reporters at Bloomberg publish a competing ‘Billionaires Index’, with figures proudly “updated at the close of every trading day in New York.” Eight of the ten richest billionaires on Bloomberg’s list carry US passports. The combined fortune, at last look, of these eight: $1.22 trillion.
The combined fortune of the entire ‘Forbes’ 400? ‘Forbes’ put that total last fall at a sleek $4.5 trillion. Let’s pause here a moment to reflect on that “trillion” piece. The typical American, the journalists at ProPublica point out, would have to labor for 25,000 years to make a mere $1 billion.
Those ProPublica journalists last year came upon what they describe as “a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people.” America’s wealthiest, ProPublica’s initial analysis of that trove found, are paying in federal income taxes “only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.”
ProPublica has just released a second analytical bite at that IRS data-trove apple, a much deeper dive into who among our most affluent are pulling down the biggest bucks – and paying Uncle Sam the fewest bucks at tax time. The new ProPublica analysis has plenty to offer on both these fronts.
From 2013 through 2018, the span the ProPublica data cover, tech billionaires pocketed 10 of the nation’s 15 highest incomes. About a fifth of the highest 400 incomes belonged to hedge fund managers. None of the top 400 averaged less than $110 million a year, and, together, the 400 paid an average 22 percent of their incomes in federal income tax.
At the same time, Americans who were averaging far less in income – between $2 million and $5 million – were paying an average 29 percent of their incomes in federal income tax. In the United States today, the closer you get to the rarefied air of the nation’s richest, the smaller the tax bite on your income.
“In theory, our tax system is designed to tax the rich at higher rates than everyone else. That’s not the way it works at the loftiest incomes,” as ProPublica puts it. “The US tax system is making inequality worse.”
What could ease that inequality, of course, would be a national commitment to seriously tax the wealth of our wealthiest. And such a commitment, the latest ProPublica numbers suggest, could raise substantially more revenue than tax-the-rich advocates have so far been calculating. Why? The standard media wealth scorecards may significantly underestimate the wealth at America’s economic summit.
Excerpted: ‘How Rich Are the Richest Americans? Much Richer Than We Thought’.
Courtesy: Counterpunch.org