America’s Wealth Inequality Has Reached Staggering New Levels

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Jeff Bezos recently became the richest person on earth.

Bezos, head of the online retail behemoth Amazon, saw his wealth jump by $ 10 billion in just the past month to now more than $ 90 billion. That’s a stunning leap. But what’s truly stunning is that Bezos and the next two wealthiest Americans, Bill Gates and Warren Buffett, together now own more wealth than the entire bottom half of the American population combined.

The rich are getting richer.

We tracked the rise of today’s uber-wealthy in a new report, “Billionaire Bonanza 2017: The Forbes 400 and the Rest of Us,” published by the Institute for Policy Studies. We compared those at the top to the rest of the nation, whose economic condition isn’t plastered on the glossy pages of Forbes magazine, but instead buried in a study the Federal Reserve releases every three years.

We looked specifically at wealth — the money left over after totaling a family’s assets and subtracting their debt. Wealth is where the past meets the present. It’s a more accurate depiction of economic status than income, which just shows how much money one makes in a given year.

When Forbes first started compiling their famous list of the 400 wealthiest Americans in 1982, just $ 75 million would get you ranked. Even after accounting for inflation, that’s still less than $ 200 million in today’s dollars.

These days, the price of admission is a record $ 2 billion — more than 10 times higher.

This group of just 400 multi-billionaires owns a combined $ 2.68 trillion. That’s trillion with a T. And it’s more wealth than the bottom 64 percent of the U.S. population, an estimated 204 million people. That’s more people than the populations of Canada and Mexico combined.

On the other side of the economic spectrum, where the rest of the country resides, economic conditions are largely stagnant. The median family owns about $ 80,000 in wealth, excluding durable consumer goods like cars and appliances. This figure is essentially unchanged from 1983, when the Federal Reserve first started tracking household assets using a uniform survey.

In other words, despite 30 years of economic growth, the typical American family has barely seen a budge in their economic standing.

Today, about one in five households lives in “underwater nation,” with either zero or negative wealth. That figure is even higher for black and Latino households, the result of decades of discrimination.

We are witnessing the rising concentration and consolidation of our nation’s wealth into fewer and fewer hands. Most concerning is the potential for these wealth hoarders to use their outsized bank accounts to buy outsized power over our government.

A surefire way to make today’s economic inequality greater is to offer a massive tax break to the very wealthy, as President Trump’s “tax reform” plan would do. In fact, major tax breaks for the already wealthy is a big part of what’s created the inequality we see today.

When three people own more than half the country, and when a fifth of us have nothing, that’s the exact opposite of what we need to be doing.

The post America’s Wealth Inequality Has Reached Staggering New Levels appeared first on Institute for Policy Studies.

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America’s Staggering Racial Wealth Gap Is Getting Worse, Not Better

(Image: Flickr / Johnny Silvercloud)

(Image: Flickr / Johnny Silvercloud)

Two years ago this month, Michael Brown was shot by a white police officer in Ferguson, Missouri, sparking months of sustained protests and helping to ignite the Black Lives Matter movement. While police violence and inequities in our criminal justice system have dominated the discussion of our racial divide since then, there’s a lot more to the story.

Less covered — but just as startling — is the stark racial economic divide in this country.

In a new report called “The Ever-Growing Gap,” my co-authors and I examine 30 years’ worth of data on the wealth divide between white, black and Latino families. Even we were shocked at just how wide the chasm has become — and how much wider it’s going to get if we don’t do something about it.

Read the full article on Inside Sources’s website.

The post America’s Staggering Racial Wealth Gap Is Getting Worse, Not Better appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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The Leaders of 1776 Philadelphia Would Be Appalled at Today’s Staggering Inequality

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(Photo: Flickr / fretur)

Later this summer, just a few weeks after this year’s Fourth of July celebrations, Democrats will be gathering in Philadelphia to make some presidential nomination history.

Democrats — small-d variety — gathered in Philadelphia soon after the original Fourth of July to make history, too.  In September 1776, they would go on to adopt their new nation’s most egalitarian state constitution.

Before the Revolution, only men of property in Pennsylvania could vote and hold office. The new state constitution, notes historian Clement Fatovic in his recently published America’s Founding and the Struggle over Economic Inequality, totally removed property qualifications for voting and office-holding.

In the new and free Pennsylvania, declared teacher and mathematician James Cannon, “over-grown rich Men will be improper to be trusted.”

Many citizens of the new Pennsylvanian “commonwealth” wanted this sort of egalitarian sensibility expressly written into their new constitution.

“An enormous Proportion of Property vested in a few Individuals is dangerous to the Rights, and destructive to the Common Happiness of Mankind,” read one proposed passage for the new constitution, “and therefore every State hath a Right by its Laws to discourage the Possession of such Property.”

The final constitution adopted didn’t carry that exact language. But Pennsylvania’s new state government did move quickly to discourage grand fortune. Before the end of 1776, the state had a progressive tax code that placed a new levy on the speculative holdings of rich Pennsylvanians.

After the Revolution, lawmakers in the Pennsylvania Assembly carried that same spirit into the debate over a newly created state bank that many saw as concentrating the state’s wealth in the hands of a few.

“The accumulation of enormous wealth,” the official Assembly committee statement against the powerful bankers ran, “will necessarily produce a degree of influence and power, which cannot be intrusted in the hands of any set of men whatsoever, without endangering public safety.”

A year later, the controversial state bank would see its charter revoked.

The Pennsylvania crackdown on concentrating wealth reflected a widespread agreement throughout the former 13 colonies that their new nation needed to become a much more equal place.

Large landowners, merchants, and affluent lawyers had dominated the political life of the British colonies. These powers-that-be expected farmers, artisans, and other laborers to know their place.

But the struggle for independence upset this “politics of deference.” The colonial elites, explains historian Clement Fatovic, found it “more and more difficult” to reconcile “great disparities of wealth with the animating principles of the Revolution.”

In this new political environment, relates Fatovic, economic inequality become a pervasive topic in political, religious, and everyday conversations.

Basic rights like a free press and trial by jury, proclaimed Noah Webster of later dictionary fame, cannot contribute nearly as much to freedom as “a general distribution of real property among every class of people.” To avoid the fate of failed ancient republics, the new American nation had to overcome economic inequality.

Of course, not everyone in the new American republic shared that distaste for grand fortune. But even many of America’s early rich tended to see extreme inequality as a danger to the new American project — and tended to support progressive taxation and other moves that would discourage great wealth disparities.

Even wealthy merchant Gouverneur Morris said “taxes should be raised from individuals in proportion to their wealth.”

Should any of this matter to us today? The generation of 1776, after all, did its thinking more than a couple centuries ago. Outside the Fourth of July, how much attention should we pay to our Founders?

A great deal, contemporary defenders of privilege seem to think. Conservatives today claim to represent the spirit of 1776. The most in-your-face of them even call themselves the “Tea Party” to evoke that spirit.

Attacking grand fortune amounts to an attack on liberty, these Tea Party types — and their billionaire backers — pronounce. Only “limited government” can save us. And if limiting government means letting billionaires accumulate as many billions as they can grab, they assert, no harm done.

The actual leading figures in the generation of 1776 essentially believed just the opposite. They took “great pride in the relative economic equality they believed distinguished their country from those in Europe.” Fatovic notes.

These attitudes should matter to us today. The founders, Fatovic’s book explains, were undertaking “an experiment in self-government” and “the recognition that this experiment could fail made them highly sensitive to the conditions necessary for its success.”

And no condition, many of those founders felt, would be more important than avoiding the staggering inequality so then common in Europe.

The developed world’s most staggering inequality has now shifted over to the United States. The generation of 1776 would not be pleased.

The post The Leaders of 1776 Philadelphia Would Be Appalled at Today’s Staggering Inequality appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.

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