Trillionaires at the Gates |
I wrote my first post for Inequality.org, "Our First Trillionaire: Only a Matter of Time," over 12 years ago. I hoped, at the time, that the post would age poorly. After all, the presence of a trillionaire on American soil would certify that we had unquestionably reached an oligarchic concentration of our nation’s wealth.
Unfortunately, that post has aged remarkably well. If anything, I now see my forecasting as too timid.
Elon Musk’s personal wealth now sits at about $750 billion. That total represents an annual average increase of 23% over the $60 billion Bill Gates fortune of 2013. At that rate of increase, America will boast its first trillionaire at least a decade before 2039, the year I gave CNBC writer Eric Rosenbaum in 2014 as the date our nation would most likely see its first trillionaire.
Back in 2013, I worried mightily that the absence of a reliable mechanism in America’s tax system to limit the growth rate of extreme fortunes would cause the wealth share of the richest Americans to rise to ever-higher levels. Wealth at America’s economic summit, I noted, was growing at a faster rate than the nation’s aggregate wealth, and that rapid growth was bringing a disturbing arithmetic into play.
America now finds itself in a democracy-destroying downward cycle. Extreme wealth begets a political power that begets policy choices that lead to even more extreme wealth concentration.
“If the wealth of one group within a nation grows at a faster rate than the nation’s aggregate wealth,” I pointed out, “that group’s share of the aggregate wealth must increase over time. That’s a mathematical certainty. And the level of subsequent wealth concentration has no limit.”
Our country’s wealth concentration story has played out exactly that way over the past dozen years, as economist Gabriel Zucman has detailed. The nation’s top .00001%—a mere 19 households—has increased its share of America’s wealth from 0.1% in 1982 to 1.81% in 2024. Of the country’s $148 trillion total wealth in December 2024, those 19 households held $2.6 trillion. In the past year, their wealth total has increased to well over $3 trillion.
That increase has produced a stunning annual increase in the wealth share of that ultra-elite group, nearly 7% per year on average. To achieve that rate of wealth share growth, the wealth of our top .00001%—one ten-millionth of America’s households—has had to grow at an average rate nearly seven percentage points above the average annual growth rate of the country’s wealth.
Over a decade ago, I told CNBC that America’s march to oligarchy would revolve around a considerable increase in the concentration of wealth within the billionaire class. Those 19 households in our top .00001% comprise 5% of America’s top .0002% (380 households, or roughly, the Forbes 400). Their share of the wealth of that larger group of billionaires now stands at about 50% today, a quadrupling since 1982.
What has generated America’s increasingly oligarchic wealth concentration? The worst culprit, I’d argue, continues to be a federal income tax system that not only lacks a reliable mechanism to rein in the growth of massive fortunes but does the exact opposite, exacerbating wealth inequality when we most need it contained.
Specifically, our tax system applies an extremely regressive tax rate to capital gains, the principal form of economic income flowing to our billionaire class. The........