Billionaires in the US have grown $2.1 trillion (£1.5 trillion) richer during the pandemic. Their collective wealth surged by 70 percent while many ordinary people faced pay cuts, job losses and poverty.
Analysis by Americans for Tax Fairness (ATF) and the Institute for Policy Studies Program on Inequality also found the numbers of US billionaires grew.
In March of last year, there were 614 with ten-figure bank accounts. This October, there are 745.
The $5 trillion (£3.62 trillion) in wealth now held by 745 billionaires is two-thirds more than the wealth held by the bottom 50 percent of all US households.
The analysis says the “fortune of these billionaires over the past 19 months is all the more stark when contrasted with the devastating impact of coronavirus on working people”. “Almost 89 million Americans have lost jobs, over 44.9 million have been sickened by the virus, and over 724,000 have died from it,” it says.
It explains that most US billionaires’ income comes from “the increased value of their investments such as stocks, a business or real estate”. And “they don’t have to pay taxes on that increased wealth unless they sell the assets”.
But the ultra-rich don’t need to sell assets. Instead, because of the size of their fortunes, they can borrow money at low rates from banks and “live lavishly tax free”.
And then when they sell their assets they pay a top capital gains tax rate of 20 percent. This is far below the current 37 percent top rate they would pay on an equivalent salary.
None of these super-wealthy parasites has anything to fear from president Joe Biden’s tax proposals in his Build Back Better plan.
Most of these huge billionaires’ gains will go untaxed under current rules and will disappear entirely for tax purposes when they are passed onto the next generation.
“This growth of billionaire wealth is unfathomable, immoral, and indefensible in good times let alone during a pandemic,” said Frank Clemente, executive director of ATF.
“For practical and moral reasons, Congress must start effectively taxing the outsized gains of billionaires. Many of the proposals under discussion to tax the rich would exempt billionaires because of the way they make their money.”
Elon Musk, chief executive of Tesla and SpaceX, grabbed the biggest gains. His wealth grew by a soaraway 751 percent during the pandemic, from £17.8 billion to £151 billion. Musk’s wealth pulled ahead of Amazon CEO Jeff Bezos, who trousered “only” a 70 percent increase over the 19-month period.
It is the same pattern in Britain. In May the Sunday Times rich list revealed that Britain’s billionaires have increased their wealth by £106 billion during the pandemic—that’s £290 million per day.
On Wednesday next week, Tory chancellor Rishi Sunak will deliver his budget. The Financial Times newspaper says he is poised to cut taxes for banks to protect them from a scheduled rise in corporation tax.
He will not reverse the cuts in Universal Credit, the setting aside of the pension triple lock or the increase in workers’ national insurance contributions.
Whether it’s the US or Britain—or anywhere else—the pandemic has been a boon for the rich and a terrifying burden for working class people.
It’s right to demand wealth taxes on the billionaires—but the system that produces them also has to go.
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