No real opinions here, none held strongly, just some observations I recently made about the scale of some of the numbers I was interested in, with some quick thoughts added. I couldn’t find this data easily, so I had to compile it from the list here.
US Billionaires 2018
Total Count: 585
Avg Age: 68
Median Age: 68
Avg Net Worth: $5.29B
Median Net Worth: $2.80B
Total Combined Net Worth: $3.096T
US Federal Budget
FY17 Revenue: $3.316T
FY17 Spending: $3.982T
To simply put this in perspective, if the all the present billionaires in the US liquidated and gave away their entire wealth, it would:
1) Fund the US Federal spend of 2017 for 9 months
2) Fund the US Federal deficit for 4.6 years
Other things to observe
Most of the increase in wealth of the wealthy comes from investments and capital returns, and these are not subject to income tax. They are subject to capital gains tax, which after 1 yr of holding assets are limited to 20%.
As an example, if you had enough cash lying around that you could bet on cryptocurrencies when they were just a fad, you could’ve made 1000+% return on your investment in 2-3 yrs, yet paid only 20% tax on it. In fact, the average return on a class of crypto investments made in 2017 was a whopping 136,000 percent. Yes, those are 3 zeroes. Yet, you’d only owe 20% capital gains tax on that, regardless of your income level or net worth.
On less volatile assets, if you had $1bn invested in the S&P 500 in 2013, by the end of that year, it would’ve grown to $1.3bn. So you’d have earned $300M in one year, just with the capital you had lying around. And regardless of your total net worth or your income level, you’d just pay a capital gains tax of $20% on it.
These are some ways how the rich keep getting disproportionately richer.