The total wealth gain of America’s billionaires has surpassed the $1 trillion mark, a 34 Percent rise since mid-March, the approximate start of the COVID-19 pandemic, according to new analysis by the Institute for Policy Studies (IPS).
With the close of the markets on November 24, 2020, US billionaires had seen their combined wealth equal $1.008 trillion. The total wealth of U.S. billionaires is now almost $4 trillion ($3.956 trillion). These 650 billionaires now have twice as much wealth as the bottom 50 percent of all U.S. households.
The stock market surge has led to the emergence of the fifth “centibillionaire” in the world. French luxury titan Bernard Arnault joined Jeff Bezos, Bill Gates, Mark Zuckerberg, and Elon Musk, in holding over $100 billion in wealth. Two years ago, there was only one centi-billionaire. Three years ago, there were none.
“The increases in billionaire wealth continue to defy gravity in the real economy where millions have lost their jobs, health and livelihoods,” said Chuck Collins, co-author of a recent report with published by IPS, Bargaining for the Common Good, and United for Respect, “Billionaire Wealth vs. Community Health.” He also co-authored IPS’ April report, Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers.
This inequality in response to economic distress is not normal or predetermined. According to IPS analysis, U.S. billionaires saw their fortunes decline in the years after the 2008 Great Recession along with everyone else. It wasn’t until almost four years later, in September 2012, that the total wealth of the Forbes 400 exceeded its 2008 pre-Great Recession levels.
Billionaire wealth increases tend to track stock market gains, which have been mostly shielded from the catastrophic losses in the real economy during the pandemic. But some billionaires have seen extraordinary wealth surges because their wealth is linked to companies that are well-positioned to extract enormous gains during the pandemic. These pandemic profiteers include:
- Elon Musk’s wealth grew over $100 billion since the start of the pandemic, from $24.6 billion on March 18 to $126 billion on November 24, an increase of 413%, boosted by his Tesla stock. His wealth now surpasses Bill Gates of Microsoft
- Jeff Bezos’s wealth grew almost $70 billion from $113 billion on March 18 to $182.4 billion.
- Dan Gilbert, chairman of Quicken Loans, saw his wealth rocket by over $37 billion, from $6.5 billion in March to $43.9 billion on November 24, 2020, an increase of 575 percent.
IPS recently published the report “Billionaire Wealth vs. Community Health” with Bargaining for the Common Good and United for Respect. It studied the plight of essential workers in billionaire-controlled companies. Essential workers, lauded as heroes during the pandemic, find themselves underpaid and required to put their health at risk by companies, including some owned or operated by billionaires. The report focused on the “Delinquent Dozen” companies that should do more to protect and support their workers while they reaped billions.
To address pandemic profiteering, IPS supports a pandemic profiteering tax, such as the “Make Billionaires Pay Act” introduced in Congress in August. The bill proposes a one-time, 60 percent tax exclusively on billionaires’ gains between March 18 and the end of this year.
Based on past estimates of billionaire wealth gains, the tax would generate between $450 billion and $550 billion that could be channeled to pandemic response, including paid sick leave, hazard pay for essential workers, and emergency unemployment assistance. Funds could also be directed to state governments for public services, for maintaining weekly $600-per-week expanded unemployment payments, or paying out another round of $1,200 stimulus checks, all of which the House-passed Heroes Act would do, according to Americans for Tax Fairness.
According to IPS analysis, even with the new tax, U.S. billionaires would still have over an estimated $450 billion in gains during the worst economic downturn since the Great Depression.
IPS published additional recommendations in its April report, Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes and Pandemic Profiteers:
- Establish a Pandemic Profiteering Oversight Committee that goes beyond oversight of stimulus funds.
- Discourage wealth hiding through passage of the Corporate Transparency Act.
- Levy an emergency 10 percent Millionaire Income Surtax.
- Unleash an Emergency Charity Stimulus to mandate payouts of 10 percent payouts for donor-advised funds (DAFs) and private foundations for three years.
- Make the federal estate tax more progressive and institute a wealth tax.
- Shut down the global hidden wealth system.