A new report from analysts at the Institute for Policy Studies finds that the collective financial gain of 660 billionaires during the COVID crisis could pay for all of the working family relief in President Joe Biden’s coronavirus response plan.
Here are some excerpts:
The combined fortune of the nation’s 660 billionaires as of Monday, January 18, 2021 was $4.1 trillion, up 38.6% from their collective net worth of just under $3 trillion on March 18, 2020, the rough start of the pandemic, based on Forbes data compiled in this report by the Institute for Policy Studies (IPS) and Americans for Tax Fairness (ATF). There have been 46 newly minted billionaires since the beginning of the pandemic, when there were 614.
The $1.1 trillion wealth gain by 660 U.S. billionaires since March 2020 could pay for:
- All of the relief for working families contained in President Biden’s proposed $1.9 trillion pandemic rescue package, which includes $1,400 in direct payments to individuals, $400-a-week supplements to unemployment benefits, and an expanded child tax credit.
- A stimulus check of more than $3,400 for every one of the roughly 331 million people in the United States. A family of four would receive over $13,000. Republicans in Congress resisted sending families stimulus checks most of last year, claiming we couldn’t afford them.
Meanwhile, the report notes, “ordinary Americans have not fared as well as billionaires during the pandemic.” As it points out:
- Over 25 million have fallen ill with the virus and more than 420,000 have died from it. [Johns Hopkins Coronavirus Resource Center]
- Collective work income of rank-and-file private-sector employees—all hours worked times the hourly wages of the entire bottom 82% of the workforce—declined by 1% in real terms from mid-March to mid-December, according to Bureau of Labor Statistics data.
- Over 73 million lost work between Mar. 21 and Dec. 26, 2020. [U.S. Department of Labor]
- 16 million were collecting unemployment on Jan. 2, 2021. [U.S. Department of Labor]
- Nearly 100,000 businesses have permanently closed. [Yelp/CNBC]
- 12 million workers have likely lost employer-sponsored health insurance during the pandemic as of August 26, 2020. [Economic Policy Institute]
- Some 29 million adults reported between Dec. 9-21 that their household had not had enough food in the past week. From Nov. 25-Dec. 7, between 8 and 12 million children lived in a household where kids did not eat enough because the household could not afford to fully feed them. [Center on Budget & Policy Priorities (CBPP)]
- 14 million adults—1 in 5 renters—reported in December being behind in their rent. [CBPP]
After exploring the stunning gains of individuals like Jeff Bezos, Elon Musk, Bill Gates and Mark Zuckerberg, the report offers an obvious partial solution:
Tax reform that ensures the wealthy pay their fair share—the principle the Biden tax plan is built on—would transform a good chunk of those huge billionaire gains into public revenue to help heal a hurting nation. But getting at that big boost in billionaire fortunes is not as simple as raising tax rates: tax rules let the rich delay, diminish and even ultimately avoid any tax on the growth in their wealth. What’s needed is structural change to how wealth is taxed.
The most direct approach is an annual wealth tax on the biggest fortunes, proposed by Senators Elizabeth Warren and Bernie Sanders, among others. Another option is the annual taxation of investment gains on stocks and other tradable assets, an idea advanced by the new Senate Finance Committee chair, Ron Wyden. Even under the current discounted tax rates for investment income, if Wyden’s plan had been in effect in 2020, America’s billionaires would be paying hundreds of billions of dollars in extra taxes this spring thanks to their gargantuan pandemic profits last year.
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