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Billionaires in Paradise

Secret offshore tax havens, the Forbes 400, and the Rest of Us

It used to be relatively easy to make it into the Forbes 400.

In 1982, you just needed to be worth $75 million. But that’s couch-cushion money compared to 2017: today, you need to be worth at least $2 billion.

And to be on the top, you need even more. The top three billionaires on the list – Amazon’s Jeff Bezos, Microsoft founder Bill Gates, and super-investor Warren Buffett — have more wealth between them than the bottom half of all U.S. households combined. That’s three men with more wealth than 160 million people; three men who own more than 63 million households put together.

But the most shocking thing about this list might be this: the combined wealth of the Forbes 400 is $2.68 trillion, more than the entire GDP of Great Britain, the fifth-largest economy in the world.

If this all sounds a little more extreme than the last time you checked, it’s because of how fast the gap between rich and poor is growing. The numbers are all from a new report I co-authored with Josh Hoxie, Billionaire Bonanza 2017.

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Part of the reason these incredible juxtapositions are possible is because roughly one in five U.S. households had zero or negative wealth. Millions more have very little savings to fall back on and fewer assets than ever, with home ownership rates still on a downwards slide that began in 2005.

And so as the bottom half of the country gets poorer, the top 400 people get richer, as the private jet class rigs the rules of the economy to bleed the rest of us dry. It’s easy with friends in high places: just look at Congress’s latest unprecedented money grab in the guise of tax reform.

What’s worse is that these figures almost certainly are underestimating the amount of wealth these people have, probably by tens of millions of dollars. We can’t know, because an increasing amount of it is hidden in offshore tax havens and legal trusts. Mark “Radical Transparency” Zuckerberg (#4 on the Forbes list) is in good company there.

Of course, with the leak of the the “Paradise Papers,” radical transparency may be coming to Mr. Zuckerberg and friends whether they like it or not. The 13.4 million documents that make up the Paradise Papers were leaked from a Bermuda law firm that specializes in helping the world’s rich use the offshore system and legal trusts to hide wealth and dodge taxes. With all this hidden cash, the real levels of wealth inequality are probably even greater; already we’ve seen names that range from the mundane (Commerce Secretary Wilbur Ross) to the surprising (et tu, Queen Elizabeth?). And that’s just in the first few days.

We have a billionaire problem. Such levels of concentrated power and wealth are positively plutocratic, and plutocracies have never, ever ended well. As the French economist Thomas Piketty warned, the US is moving toward becoming a “hereditary aristocracy of wealth and power,” where the sons and daughters the billionaires of today will dominate our future politics, economy, culture and philanthropy tomorrow.

You thought things were bad now. If we remain on this trajectory, the oligarchs will soon hold all the keys and the key ring too.

The good news is that an “other 98 percent” movement is growing. Fewer than 30 percent of the US population believe that the Republican tax plan is a good idea. By solid majorities, the US public believe the rich should pay more taxes, and global corporations should step up and pay more too — or at least pay what they actually owe.

To put the brakes on this limousine hurtling toward plutocracy, we have to demand Congress close down the offshore tax shelters and trusts that enable the very wealthy and global corporations to avoid, at minimum, over $166 billion a year in US taxes.

But this tax bill seems intent not only on letting companies maintain the status quo, but actually rewarding companies like Apple, Nike, and General Electric who have been shirking their tax obligations for decades. Apple alone has already shifted $252 billion in profits offshore in order to avoid $75.5 billion in US taxes; they don’t need more tax breaks to boot.

Staying on top of our elected officials, and refusing to give in and accept this as natural, is crucial. And we can take the fight to the corporations too. We can show up at their retail stores, crash their annual meetings, hound them on social media, call for boycotts, whatever it takes to protest their tax dodging and the toll it takes on our society.

The private jet class depends on you being too busy or too tired or too frustrated to care what they do, as long as you keep buying their products and keeping their cronies in office. Don’t give them the satisfaction.

Written by Chuck Collins

Chuck Collins

Chuck Collins is a senior scholar at the Institute for Policy Studies and co-editor of Inequality.org.  He is the author of Born on Third Base.

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