By Kenny Stancil / Common Dreams
The growing concentration of wealth in fewer hands—including among corporate robber barons’ descendants who continue, after multiple generations, to wield the “financial, political, and philanthropic clout” afforded by enormous inheritances to “advance their dynasty-building agenda”—intensifies working-class suffering in the U.S. and poses a threat to society and democracy.
That’s according to Silver Spoon Oligarchs: How America’s 50 Largest Inherited-Wealth Dynasties Accelerate Inequality, a new report out Wednesday from the Institute for Policy Studies.
Analyzing data from Forbes, IPS tracked the assets of the country’s 50 wealthiest families—”including the Waltons, the Kochs, the Mars family, and many others, some well-known and others relatively unknown”—from 1983 to 2020.
“By 2020, the 50 families had amassed $1.2 trillion in assets,” researchers found. “By comparison, the bottom half of all U.S. households—an estimated 65 million families—shared a combined total wealth of just twice that, at $2.5 trillion.”
The “staggering” fortunes of dynastic families, whose “wealth is becoming increasingly persistent,” increased at “10 times the rate of ordinary families,” IPS pointed out.
“For the 27 families that were on both the Forbes 400 list in 1983 and the Forbes Billion-Dollar Dynasties list in 2020,” wrote the report’s authors, “their combined assets have grown by 1,007% over those 37 years. This is an increase from $80.2 billion to $903.2 billion in inflation-adjusted dollars. In contrast, between 1989 and 2019, the wealth of the typical family in the U.S. increased by just 93 percent in inflation-adjusted dollars.”
Moreover, “those at the very top are blowing away even their closest competition,” the report said. “The five wealthiest dynastic families in the U.S. have seen their wealth increase by a median 2,484% from 1983 to 2020.” According to IPS:
- In 1983, Wal-Mart founder Sam Walton and his children were worth just $2.15 billion (or $5.6 billion in 2020 dollars). By the end of 2020, Walton’s descendants had a combined net worth of over $247 billion, an inflation-adjusted increase of 4,320%.
- The Mars candy dynasty has seen its wealth increase 3,517% over the past 37 years, from $2.6 billion in 1983 (in 2020 dollars) to $94 billion by 2020. The family has also spent large sums on public policy advocacy to change tax laws.
- Cosmetics magnate Estée Lauder and her descendants have seen their wealth grow from just $1.6 billion in 1983 (in 2020 dollars) to $40 billion in 2020. This is a growth rate of 2,465%.
The past 15 months, in particular, have been a boon for dynastic families, who have enjoyed substantial wealth gains amid the COVID-19 pandemic.
“Since the start of the pandemic in March 2020, the top 10 families on the Forbes dynasty list have had a median growth in their net worth of 25%,” researchers found. IPS has consistently highlighted the skyrocketing amount of wealth held by the nation’s 660 billionaires, who have seen their combined fortunes balloon by more than $1.1 trillion amid the COVID-19 pandemic.
“Much of the media’s focus today is on new wealth billionaires like Jeff Bezos, Mark Zuckerberg, or Elon Musk, who have become centi-billionaires in their lifetimes,” noted the progressive think tank.
Chuck Collins, co-author of the report and author of the new book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions, said in a statement that “when we focus on the surging fortunes of first-generation billionaires—and their shocking tax avoidance—we forget 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.”
“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,” Collins added. “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,” he said.
According to the report, the children and grandchildren of some corporate executives—”who may be up to seven generations removed from the original source of their family’s wealth”—tend to “focus less on creating new wealth and more on preserving existing systems that extract ongoing rents from consumers and the real economy.”
“America’s dynastic families, both old and new, are deploying a range of wealth preservation strategies to further concentrate wealth and power—power that is deployed to influence democratic institutions, depress civic imagination, and rig the rules to further entrench inequality,” the authors wrote. “This tax avoidance means less support for the infrastructure we all rely on to preserve our health, safety, and quality of life.”
IPS drew attention to the strategies that inherited-wealth dynasties use to consolidate their vast economic fortunes and fortify their immense political power:
- Dynastically wealthy families wield a great deal of political power, and use it to further their interests. Some dynastic families spend millions lobbying for favorable tax, labor, and trade policies. Several have corporate political action committees which give millions to candidates and campaigns. Many family members give to candidates and PACs; several serve on policy advisory boards; and a few have served in government themselves, including as governors, cabinet members, and even vice president.
- Dynastic families exploit their philanthropic power too, through charities and foundations. The top 50 families have set up more than 248 foundations between them, housing more than $51 billion in assets. While many move much-needed revenue to broader public interest charities, others fund groups working to reduce taxes on the wealthy and roll back regulations that constrain corporate profits. Some funnel millions to donor-advised funds, which can fund dark-money political advocacy. And in a few cases, family members have used them to compensate themselves.
“Members of the Busch, Mars, Koch, and Walton families have together spent more than $120 million over the past 10 years lobbying for taxation, labor, and trade policies favorable to their interests and investments,” according to IPS.
To counter the anti-democratic influences of dynastically wealthy families that “have gained massive and unaccountable financial, political, and philanthropic power… while giving relatively little back to the society that has enabled their fortunes,” IPS called for “a more progressive tax system as well as new efforts to shut down the hidden wealth system.”
Regarding more progressive taxation, IPS endorsed several existing proposals, including:
- Greater oversight and enforcement by the IRS, as outlined in the Stop Cheaters Act introduced in February by Rep. Ro Khanna (D-Calif.);
- An emergency pandemic wealth tax, as Sen. Bernie Sanders (I-Vt.) called forlast July when he introduced the Make Billionaires Pay Act;
- An annual wealth tax, as Sen. Elizabeth Warren (D-Mass.) proposed in the Ultra-Millionaire Tax Act she unveiled in March;
- A millionaire surtax;
- A progressive estate tax, as outlined in the For the 99.5 Percent Act introduced in March by Sanders and Rep. Jimmy Gomez (D-Calif.);
- An inheritance tax on heirs; and
- State-level estate and wealth taxes.
However, “none of these proposals will succeed,” IPS stressed, “unless the U.S. shuts down the tax loopholes, offshore tax havens, and dynasty trusts that enable the very wealthy to hide their wealth at a dizzying pace.”
In order to “shut down the hidden wealth system,” IPS urged Congress and the White House to:
- Establish a federal rule against perpetuities, which would limit the lifespan of trusts;
- Outlaw certain types of trusts; and
- Strengthen administrative actions by the executive branch.
In their conclusion to the report, the authors emphasized that “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,” they added. “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.”