Two years ago this week, shortly after President Donald Trump issued a proclamation declaring “A National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” under 45,000 Americans were infected. The pandemic death toll was still below 500. But the economic ramifications were already being felt, as fears about the rapid spread of the disease were leading to mass layoffs, stock-market turbulence, and genuine concern about whether Americans would be able to put food on the table and pay the rent.
But it was a different story for the very rich. They were about to experience a redistribution of wealth that would see their fortunes skyrocket at an astronomical rate. While the pandemic has been hard on the vast majority of Americans, it’s been nothing but good times for the billionaire class.
Elon Musk was worth $24.6 billion when Trump issued his pandemic proclamation in mid-March of 2020. Today, he is worth $234 billion—an 851 percent spike that adds up to roughly $209.4 billion. During the same period, Google cofounders Larry Page and Sergey Brin doubled their wealth, to nearly $114 billion and $109 billion, respectively. Amazon’s Jeff Bezos enjoyed a more modest increase in his fortunes, gaining a mere $52.1 billion during the period. But Bezos still finished this remarkable run for the billionaire class as the second-wealthiest man in America, with a net worth of $165.1 billion, according to Forbes magazine’s latest study of “The World’s Real-Time Billionaires, Today’s Winners and Losers.”
Indeed, Musk and Bezos have over the course of the past 24 months grown so rich that they can casually rocket into space in a Billionaire Boys Club game of atmospheric oneupmanship.
While almost a million Americans have died from Covid-19 over the span of two traumatic years, and while tens of millions of Americans have experienced financial hardship and uncertainty as a result of the economic troubles that extended from the pandemic, America’s billionaires have experienced an unprecedented run.
Americans for Tax Fairness’s latest assessment of the condition argues that “U.S. billionaires’ wealth continues to soar above the misery.” ATF explained:
[As] of March 10, their collective wealth has shot up by $1.7 trillion, or 57 percent, since the pandemic emergency was proclaimed in mid-March 2020. Their total wealth reached $4.6 trillion, up from $2.95 trillion on March 18, 2020…. The number of U.S. billionaires increased by 15%, from 614 to 704.
Globally, during the course of the pandemic, Oxfam estimates that “[a] new billionaire has been minted every 26 hours, as inequality contributes to the death of one person every four seconds.” The growth has been particularly pronounced in the United States, where ATF has argued that the $4.6 trillion in assets controlled by this country’s 704 billionaires is “one-third more than the collective $3.4 trillion net worth of the entire bottom half of American society, or some 65 million households.”
Those are some astounding numbers.
Now, consider this fact: “Under current law, none of that wealth gain—essentially income—will likely ever be taxed,” noted ATF.
ProPublica found after an assessment of IRS data that in a number of recent years, Musk, Bezos, and many of their fellow billionaires paid zero federal income taxes even as their fortunes soared. Those billionaires who actually pay taxes do so at a dramatically lower rate than working Americans do.
“Working families pay what they owe in taxes each paycheck. Billionaires generally pay little or nothing in taxes on these extraordinary gains in wealth,” said Frank Clemente, executive director of ATF, who wants Congress and the Biden administration to start taxing wealth gains as income each year, so that billionaires will start paying their fair share of taxes. “Such a reform is not yet part of President Biden’s investment and tax legislation now being revised by Congress, but it should be.”
That idea has gained traction in Congress. Last fall, Senate Finance Committee chair Ron Wyden, an Oregon Democrat who has long advocated for raising taxes on billionaires, released a new version of his proposed Billionaires Income Tax, which is designed to force billionaires to start paying taxes on a regular basis. Wyden said at the time:
There are two tax codes in America. The first is mandatory for workers who pay taxes out of every pay check. The second is voluntary for billionaires who defer paying taxes for years, if not indefinitely. Two tax codes allow billionaires to use largely untaxed income from wealth to build more wealth, while working families struggle to balance the mortgage against groceries, and utilities against saving for the future. That’s why it’s time for a Billionaires Income Tax. The Billionaires Income Tax would ensure billionaires pay tax every year, just like working Americans. No working person in America thinks it’s right that they pay their taxes and billionaires don’t. We have a historic opportunity with the Billionaires Income Tax to restore fairness to our tax code, and fund critical investments in American families.
Under the Wyden plan—which would only apply to taxpayers with more than $1 billion in assets or more than $100 million in income for three consecutive years—tradable assets, such as stocks, would be marked to market every year. Billionaires would pay tax on gains like those they experienced during the pandemic. If enacted, the plan could raise roughly $550 billion over a decade from just 704 very wealthy taxpayers.
Another plan, the “Make Billionaires Pay Act,” was proposed by Senate Banking Committee chair Bernie Sanders (I-Vt.) in the last Congress. That measure, presented in response to initial reports of spikes in billionaire wealth during the pandemic, sought to impose a one-time 60 percent tax on wealth gains made by billionaires between March 18, 2020, and January 1, 2021. Sanders proposed to “tax the obscene wealth gains billionaires have made during this extraordinary crisis to guarantee healthcare as a right to all for an entire year.”
No matter which approach Congress takes to tax the rich, there is no question that it needs to happen. “It is shameful that billionaires profit off the suffering of working families as the pandemic ravages the economy and kills thousands of Americans every day,” said Representative Ilhan Omar, the Minnesota Democrat who has been a leading advocate for taxing the rich in order to fund services for those in need.
“For far too long, the richest 0.001% of America, have avoided paying their fair share in taxes,” said Omar, who favors legislation that will tax the billionaire class with an eye toward “addressing our nation’s massive wealth inequality and finally guaranteeing healthcare as a human right.”
Unless the government acts, the expansion of billionaire wealth and economic inequality will continue. The next two years could see an even greater redistribution of wealth upward.
As Sanders argued in the first year of the pandemic, “At a time of enormous economic pain and suffering, we have a fundamental choice to make. We can continue to allow the very rich to get much richer while everyone else gets poorer and poorer. Or we can tax the winnings a handful of billionaires made during the pandemic to improve the health and well-being of tens of millions of Americans.”
The pandemic is not over. But the era of pandemic profiteering by the billionaire class can, and should, be finished.