Billionaires Are Now Worth $8 Trillion, and That’s A Problem

The new record, coming amid the government shutdown and a threat to food security for millions, shows how unbalanced our society has become

By William Rice

Eight trillion is a big number. It’s over 500 times more years than the universe has been in existence. It’s more miles than light travels in 12 months. Eight trillion seconds ago humanoids were first developing stone tools and building fires. 

But eight trillion is how many dollars America’s 900 or so billionaires are collectively worth, according to a recent report from Americans for Tax Fairness (ATF). That’s up more than $5 trillion in the less than eight years since enactment of the first Trump-GOP tax law, whose generous provisions for the rich accelerated billionaire wealth growth. 

The piercing of the $8 trillion barrier for billionaires comes as millions of federal workers are missing multiple paychecks because of the Republican government shutdown. Many of those public employees are being forced to continue working despite lack of pay. And President Trump has threatened that even when the government reopens, federal workers may not receive the back pay to which they’re entitled. 

Executive branch civilian payroll is about $360 billion a year. America’s billionaires could meet that annual payroll with less than 5% of their collective net worth. 

Meanwhile, more than 40 million Americans are facing higher grocery bills and potential hunger because the Trump administration is refusing to use all available funds to ensure the Supplemental Nutritional Assistance Program (SNAP) program continues past the end of October. SNAP costs about $100 billion a year; America’s billionaires could keep it fully funded for the next 10 years through the application of just one-eight of their collective fortunes. 

That a handful of individuals could comfortably afford to fund essential public services of a nation of 340 million is an indicator of how dangerously out-of-balance our economy and society have become. In a democracy, private fortunes should not dwarf public resources. 

Of course, billionaires do not generally volunteer to shoulder the responsibility for large public works. They have other things to do with their money, like buying private islands, renting out Venice for a wedding, or launching themselves into space. They also spend their cash on politics as a way of ensuring that nothing threatens their oligarchic power. 

Just this week ATF Action Fund issued a report on the nearly $20 million billionaires have pumped into the New York City mayor’s race in hopes of defeating a candidate who’s proposing modest tax increases on the city’s wealthiest residents and corporations. This report is part of a  multi-year series highlighting the outsized role billionaires play in our elections. Elon Musk, for instance, spent $278 million alone to help Trump win reelection.  

Even when billionaires are not trying to buy elections, their gargantuan presence in our midst disrupts the national community. They can drive up housing prices, make healthcare more expensive and less responsive, and even impact our food supply. 

No doubt about it, we need to reduce billionaires’ power and the best way of doing that is through the tax system. Unfortunately, our current tax code is unequipped to properly tax billionaires. That’s because unlike ordinary people, billionaires don’t live off wages that get taxed all year. Instead of their labor, it’s their money that makes the money, and often in ways the current broken tax system can’t touch. 

Unrealized capital gains–the profits from unsold investments–are the best example of this kind of tax-free income for the super-rich. For small investors, “paper profits” don’t provide any benefit besides pride in our investing acumen–you have to sell the underlying asset to generate the cash, and that cash is taxed (albeit at a discount).

But when you’re a billionaire, you don’t have to sell to benefit. You can secure low-cost loans against your rising fortune and live luxuriously tax-free. (Whatever you pay in interest is a fraction of what you’d owe in taxes if you sold.)

The top Democrat on the tax-writing Senate Finance Committee, Ron Wyden (OR), has a solution. It’s called the Billionaires Income Tax and it would tax those at the very peak of the economic pyramid on the annual gains in their investments, regardless of whether those investments were sold. Even though it would only apply to about a thousand households (in addition to billionaires, those with yearly income consistently topping $100 would owe the tax), the BIT would bring in over half a trillion dollars in federal revenue over 10 years. That’s money we could use to lower costs and increase opportunities for all the hundreds of millions of us who are not billionaires. 

Even though it’s not eight trillion, half a trillion is still a big number. And this time, it’s a number that would be shared by all of us, not hoarded by a lucky handful.