By Peter Chow
Let’s say you were alive when Jesus Christ lived, and were bestowed not only immortality, but $100,000 a day, every day, every year, indefinitely. After the past 2,020 years, you would still have less money than Bill Gates has now. $200,000 a day? You would still have less money than Jeff Bezos.
If you were able to save 1 million dollars a year, every year, it would take you 182,000 years to reach Jeff Bezos.
Even to become ‘just’ a billionaire, you would need to save $1 million a year for 1,000 years.
Business Insider calculated that Bezos has earned $6.54 billion a month, more than $1.5 billion a week, and more than $215 million a day in the last 12 months.
Bezos’ wealth increases by $149,353 every minute, almost $3,000 per second. Per hour, he earns $8,961,187 million – roughly 315 times what the average Amazon worker earns in a year ($28,466).
As of this year, Forbes counted 2,095 billionaires. At no time in history has there ever been as many Canadian billionaires as there are now – 45 to be exact. The US leads with 614. China is second with 389.
Jeff Bezos is the world’s wealthiest person for the third year in a row, despite giving $36 billion worth of his Amazon stock to his ex-wife MacKenzie Bezos as part of their divorce settlement last summer. He’s worth over $182 billion. Elon Musk, at $128 billion, just moved ahead of Bill Gates. Alice Walton, an heir to the Walmart fortune, is the richest woman, ranked No. 9 at $54.4 billion. Altogether 241 women made the list.
Trump’s net worth is now listed by Forbes at $2.1 billion, down a billion due to the pandemic. He ranks number 1,001 world-wide on the list.
The richest 26 billionaires in the world own as much combined wealth as the bottom 50% of the human race, 3.8 billion people.
In fact, some of those ultra-wealthy billionaires are now on track, if their incomes continue to rise, to become the world’s first trillionaires.
With these obscene levels of income and wealth inequality, that inequality is becoming much worse.
Wealth and income inequality will rise inexorably over time because returns on wealth normally exceed the overall growth of income. Those with very large fortunes benefit more because rates of return on large fortunes typically far exceed the average on wealth overall.
Incredibly, thanks to Trump’s tax giveaway to the rich, billionaires in America now pay a lower effective tax rate than teachers, nurses, firefighters, or truck drivers.
At a time when so many of people are struggling economically during this pandemic, it is morally obscene that a tiny handful of billionaires – the top 0.0001% – are using a global pandemic as an opportunity to make outrageous profits.
Some more enlightened billionaires have arrived at the realization that such vast concentrations of wealth are not only bad news for society; they are bad for the wealthy. Warren Buffett and Bill Gates are both advocates of higher taxes on the rich, but the rates they consider fair are nowhere near enough to bridge the inequality chasm that has emerged, to rebuild our tattered social safety nets, to lift the world’s poorest out of poverty and to heal the environmental and climate devastation caused by the hoarding of such extremes of wealth.
What we need are not half-baked efforts to make being a billionaire undesirable – we should make becoming a billionaire, let alone a trillionaire, impossible. This would require a collective, global effort to introduce “equanomics”.
This could be achieved through a variety of mechanisms, from a coordinated taxation system so progressive that there remains no incentive or possibility to build up such vast fortunes, to enacting an actual cap on wealth and incomes. Maybe, after an individual reaches $100 million, we should just award him a gold medal for being a champion capitalist.
Although inheritance taxes are still quite commonly levied on large fortunes being passed from one generation to another, the tax “burden” in Canada, as in most advanced economies, has shifted from taxation of capital and the affluent to taxes on labour and ordinary working families over the past three decades.
Annual wealth taxes were generally eliminated in the 1980’s as part of a general trend across OECD countries towards lower taxation of income from capital, which included cuts to effective corporate tax rates and tax breaks for personal income from capital gains and dividends. Decades later, it has become clear that this shift in the tax system has greatly exacerbated the sharp rise in economic inequality.
The top 87 Canadian family fortunes totalled $259 billion in 2016, the same amount of wealth shared among 12 million Canadians at the lower end of the ladder. More shocking is the rate of growth – those top-level fortunes have risen by a stunning 37% from 2012, which is more than double the average increase in wealth generally in Canada during that period.
Another recent study finds that there are 10,840 “ultra-high net worth” fortunes of $30 million or more in Canada and that the total wealth of this group is over one trillion dollars.
Statistics Canada data shows that wealth inequality has been rising, but understates its true extent since household surveys are unlikely to find billionaires at home, and billionaires do not like to fully and willingly disclose their assets.
The share of all wealth of the top 1% in Canada may be as high as 20%, in line with the OECD estimated average.
Effective tax rates on the very rich are low and falling due a number of factors: the lowering of top tax rates under the personal income tax; increasingly preferential treatment of capital income such as capital gains and dividends; low effective corporate tax rates; and, many corporate tax loopholes.
While these tax breaks could and should be reformed, wealth is a major source of economic inequality in its own right, and is a better indicator of overall ability to pay than income. Our tax code focuses on taxing income, but a family’s wealth is just as important a measure of how much it has benefited from the economy and its ability to pay taxes. And judged against wealth, our tax system asks the rich to pay a lot less than everyone else.
Progressives and social democrats have recently proposed a much bolder tax fairness agenda. The NDP and the Green Party have similarly called for an annual wealth tax, levied at a low rate of 1% on net wealth of more than $20 million.
The major goal of a wealth tax is to counter the extreme concentration of wealth and to throw light on the concentration of wealth. It should complement other progressive taxes such as a steeply progressive personal income tax and high, effective corporate income tax rates. The goal is to stop the indefinite increase of inequality of wealth.
November 16 was an indictment of Canadian politics. The Liberal Party, Conservative Party, and Bloc Québécois united to oppose the New Democratic Party motion (supported by the Green Party) which would have created a one percent tax on an individual’s wealth over $20 million. It would have also provided for an excess profits tax aimed at those who have enriched themselves while millions of Canadians suffer during the COVID-19 pandemic. These three parties all opposed this common-sense motion even though the vast majority of Canadians, 76%, support taxing billionaires and multi-millionaires on their obscene wealth.
If anything, the NDP’s wealth and excess tax proposals are too modest. In the wealth tax proposed by Senators Bernie Sanders and Elizabeth Warren in the United States, all wealth above $1 billion would be taxed at a minimum of five percent. Sanders, along with Senators Ed Markey and Kirsten Gillibrand, also released a 60 percent excess profits proposal that is more detailed than the one tabled by the NDP.
The point here is that the NDP plan was already a compromise designed to work with the neoliberal Conservative and Liberal parties on a basis that would have ironclad support from the voters of those parties. And they still rejected it.
Canadians like to pride themselves on having a government that is progressive and responsive to their needs. But as long as 90% of Parliament votes against policies supported by 76% of Canadians, that can’t be the case.