As treasure troves of the super-elite’s untold trillions glisten in offshore tax havens, Main Street is sinking in an underwater economy. Drowning in debt, clinging to the tatters of the welfare state, the gulf between the richest few and the rest of us could now widen even further with a new GOP tax bill loaded with another corporate bounty of loopholes, more tax “incentives,” and more trickle-up economics designed to concentrate as much wealth in as few hands as possible.
According to a report on the country’s widening wealth gap, published by the Program on Inequality at the Institute for Policy Studies (IPS), the elites at the helm of this upside-down economy would fit in a cozy lifeboat:
The three wealthiest people in the United States—Bill Gates, Jeff Bezos, and Warren Buffett—now own more wealth than the entire bottom half of the American population combined, a total of 160 million people or 63 million households.
More than half of US wealth is controlled by 25 billionaires. And multinational corporations shield an estimated 10 percent of global GDP from taxation through avoidance and evasion in obscure, unregulated financial enclaves.
The Paradise Papers—the massive trove of financial records exposing tech giants, Russian oligarchs, and White House officials alike—offer a glimpse of the hidden riches that remain untouchable by Uncle Sam, and the structural regulatory failures that feed global corporate impunity.
But, while the papers largely focus on corporate malfeasance, it’s vital to also look at the social injustices produced by this wealth imbalance, and the crisis of democracy that abets this global theft. According to recent estimates, “households in the top 0.01 percent, with wealth over $45 million, evade 25 to 30 percent of personal income and wealth taxes.”
Chuck Collins, director of the Program on Inequality, says via e-mail, “[T]hese concentrations of wealth understate the actual levels of inequality, due to hidden wealth systems. We believe that closing these systems of hidden wealth are critical to reducing extreme concentrations of wealth.”
The nationwide wealth gap represents how the neoliberal economic system operates as a zero-sum game based on disempowering the poor.
It’s no secret that wealthy individuals and corporations channel their enormous financial assets into tax havens. Yet for the most part the piracy of the gilded class is perfectly legal, even encouraged, under existing tax codes. The everyday struggle to stay housed, get an education, or pay for medicine, on the other hand, often traps working-class households in virtual debtor’s prisons. Today the bottom 1 percent of households are collectively $196 billion in the hole, while the top 1 percent sit on $33.4 trillion of combined net worth. A fifth of American households, and about a third of black and Latino families, are stuck with zero or negative net wealth. And while wealth divides deepen racial segregation, concentration of accumulated assets across society aggravates long-term economic insecurity within communities of color and across gender lines. Overall, the increasingly polarized economic structure has hollowed the middle class, eroded public services, and driven years of stagnant wages.