Until the River Runs Dry
Every year, wealthy donors divert more money into intermediaries, drying up the river of donations meant for working charities. We can change that.
A new IPS/Inequality.org report finds that the U.S. continues to suffer from the extreme and growing wealth and power of inherited-wealth family dynasties – and the growth of their extreme wealth accelerated during the pandemic.
The report, “Silver Spoon Oligarchs: How America’s 50 Largest Inherited-Wealth Dynasties Accelerate Inequality,” tracks the 50 wealthiest families from 1983 to 2020 using data from Forbes.
IPS researchers found that by 2020, the 50 families had amassed $1.2 trillion in assets. For the 27 families on the Forbes 400 list in 1983, their combined wealth had grown by 1,007 percent, from $80.2 billion to $903.2 billion in inflation-adjusted dollars, and for the five wealthiest dynastic families, their wealth increased by a median 2,484 percent during 37 years. The Walton family led the pack with an increase of 4,320 percent, while the Mars candy family saw its wealth increase 3,517 percent.
While media attention focuses on first-generation billionaires – and their shocking tax avoidance as chronicled by ProPublica – we neglect to look at the troubling growth of dynastic families and the changes in tax policies that will enable the children of today’s billionaires to become tomorrow’s oligarchs.
As the report argues, in a healthy democratic society with a functioning tax system, wealth disperses over decades as people have children, pay their taxes, and give to charity. But with a weak tax system on wealth – as confirmed by the recent leak showing low billionaire taxes – we are now seeing wealth accelerate over generations, leading to consolidated wealth and power.
The “Silver Spoon Oligarch” report finds that inherited wealth dynasties are growing not only due to an inadequate tax system, but also excessive hiding of wealth in dynasty trusts, and low charitable giving by multi-generational wealth dynasties. It also finds that members of the inherited wealth generation are using their wealth and power to rig the rules to get more wealth and power. Some are even using their charitable donations and political giving to press for lower taxes.
Other key findings from the report include:
The report profiles all of the 50 families, including the Waltons, the Kochs, the Mars family, and many others, some well-known and some relatively unknown. A section of the report entitled, “The Six Habits of Highly-Entrenched Dynasties,” details how family dynasties hoard and protect their fortunes from taxes. These include tax avoidance, low-charitable giving, formation of dynasty trusts, and lobbying for tax breaks.
The report includes a number of recommendations, including greater oversight of taxation, wealth taxation and abolition of certain kinds of trusts.
The report concludes:
These trends are alarming for the health of a republic that aspires to widely held prosperity and opportunity. If we stay on our current trajectory, families of inherited wealth will exert ever more control over public policy and the public pocketbook. But we can choose to move in a new direction: to enact economic policies that strengthen society as a whole, ensuring equal opportunity and dignity for all, not just the very few.
The report co-authors are Chuck Collins, Joe Fitzgerald, Helen Flannery, Omar Ocampo, Sophia Paslaski and Kalena Thomhave.
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