It seems that large wealth is immune to the economic crisis triggered by COVID-19. According to Forbes Magazine, there are 607 billionaires in the United States, defined as people whose wealth exceeds $1 billion. Far from undermining their wealth, the economic crisis brought on by the pandemic is actually driving it. According to a report from the Institute for Policy Studies, a progressive organization based in Washington, D.C., U.S. billionaires increased their wealth by $282 billion in only 23 days between March 18 and April 10.
This isn’t any old set of data. It’s related to the first noticeable COVID-19 outbreak in the country. President Donald Trump declared a national emergency on March 13 and the daily infection rates skyrocketed until reaching their first peak in the first week of April. During these 23 days between March 18 and April 10, America’s richest added several zeros to their fortunes while the number of cases and deaths multiplied and 22 million people lost their jobs – nearly a million a day.
One who stands out among them is the founder of Amazon, Jeff Bezos. According to the report highlights, he increased his wealth by $10 billion between Jan. 1 and April 10. The closure of hundreds of thousands of small businesses gave Amazon the opportunity to augment its market share.
“The Jeff Bezos wealth surge is unprecedented in modern financial history and varies greatly day by day,” the report claims. “As of April 15, Jeff Bezos’s fortune had increased by an estimated $25 billion since January 1, 2020.”
But how can this be happening in the middle of a financial crisis and while economic activity is paralyzed? The report is emphatic: “The closure of hundreds of thousands of small businesses is giving Amazon the opportunity to increase its market share, strengthen its place in the supply chain, and gain more pricing power over consumers.”
The document charges that, “Despite Amazon’s e-commerce dominance, Bezos has been unable to protect his workforce from Covid-19: Workers in 10 different Amazon warehouses tested positive for the disease in late March.” This has drawn complaints from trade unions and other organizations.
In second place is Elon Musk, co-founder of PayPal and Tesla (to name a few), with an increase of $5 billion to his fortune. After Musk is MacKenzie Bezos, ex-wife of Amazon’s founder, up $3.5 billion, Eric Yuan, of Zoom, up $2.58 billion, Steve Ballmer, of Microsoft, up $2.2 billion, John Albert Sobrato, owner of the Sobrato real estate firm, who amassed $2.07 billion, Joshua Harris, of the Apollo Global Management investment firm, up $1.72 billion; and Rocco Commisso, of the cable television company Mediacom, up $1.09 billion.
In total, these eight billionaires increased their wealth by $28 billion dollars in the first 101 days of the year.
“Billionaire wealth, as these numbers show, tends to rebound from market meltdowns,” the report points out. “In the immediate aftermath of the global economic crisis of 2008, the Forbes 400 saw their combined wealth decline $300 billion from $1.57 trillion in 2008 to $1.27 trillion in 2009. Within 30 months of the September 2008 crash, most of these fortunes recovered. By 2012, billionaire wealth had reached $1.7 trillion, exceeding pre-2008 levels. Between 2010 and 2020, the combined wealth of the U.S. billionaire class surged by a staggering 80.6 percent, from $1.631 trillion to $2.947 trillion in 2020 dollars.”
The Institute for Policy Studies report warns of the war billionaires have waged against taxation. The thousands of millions of dollars they evade, the authors add, “are fraying our social safety net. To add to the insult, working class Americans now pay, after the billionaire-backed GOP tax cuts, a higher percentage of their income in taxes than billionaires.”
“Multimillionaires and billionaires are bankrolling an entire “wealth defense industry” of professionals — tax lawyers, accountants, wealth managers — who help hide mega fortunes in offshore tax havens and dynasty trusts.”
Because of this, the study’s authors recommend that a few ways the Trump administration can combat this is to establish a commission to supervise the pandemic profiteering and to impose a 10% tax on this large wealth, among other things. With regard to the first step, the report suggests following the model of the “Truman Commission during World War II, to both monitor the stimulus package and root out corruption and profiteering in society as a whole.”
As far as the tax on large wealth is concerned, the document highlights, “though only affecting the richest 0.2 percent of Americans, a millionaires surtax would raise an estimated $635 billion over 10 years and hit the very wealthy who garner substantial revenue from capital gains.”
Chuck Collins, one of the study’s authors and director of the Program on Inequality and the Common Good at the Institute for Policy Studies, warns that with the pandemic, “we run the risk of increasing existing social inequalities, unless the government intervenes with drastic taxation measures for billionaires. If they continue to act as they are now, economic polarization will only be emphasized.”