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The Billionaire class continues to grow during the COVID-19 pandemic, even in Grand Rapids

May 20, 2020

A new report from the Institute for Policy Studies (IPS) shows that the wealth gap in the US continues to grow, with more billionaires, many of which have been profiting from the COVID-19 crisis.

The report, entitled, Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers, demonstrates that the economic system of capitalism benefits a very small percentage of people, people who use their wealth and power to exploit everyone else and to make sure that their wealth will continue to expand with their ability to purchase public policy. 

Here are just 2 key indicators from the report about the Billionaire class:

  • Between 1990 and 2020, U.S. billionaire wealth soared 1,130 percent in 2020 dollars, an increase more than 200 times greater than the 5.37 percent growth of U.S. median wealth over this same period.
  • Between 1980 and 2018, the tax obligations of America’s billionaires, measured as a percentage of their wealth, decreased 79 percent.

The analysis of the report also provides us with critical information that tells us who really runs this country. The first critical analysis point has to do with how the billionaire class buys policy, which benefits their interests.

In their 2018 study, Billionaires and Stealth Politics, political scientists Benjamin Page, Jason Seawright, and Matthew Lacombe found that billionaires overwhelmingly favor cutting their own taxes and reducing social safety net benefits. Their political contributions, whether they go to Democrats or Republicans, reflect these preferences. Billionaire dollars, in short, 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.

Billionaires are paying millions to dodge billions in taxes, a dynamic that leaves far fewer resources available to support programs that help ordinary people. 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. With trillions in otherwise taxable income stashed overseas, middle- and working-class taxpayers who lack access to these tax-dodging mechanisms are left covering a larger share of the U.S. tax burden.

A second major point in the reports analysis contrasts the increase in the number of billionaires in the US, along with the amount of wealth they now control and then contrasts that with average US families.

In 1990, there were 66 billionaires in the US, but in 2020 there are 614. The report states:

Between 1990 and 2020, the U.S. billionaire class has seen its net worth increase over 1,130 percent. Meanwhile, U.S. median household net worth between 1989 and 2016 grew by a mere 5.37 percent. Billionaire wealth has grown 210 times faster than median wealth.

When you contrast the wealth of the billionaire class with everyone else, it is rather astounding.

The concentration of wealth at the top contrasts starkly with the number of households living on the edge. Even before the current economic crisis, a growing number of U.S. households had zero or negative net worth (meaning they owed more than they owned). These “underwater” households increased as a share of the U.S. total from 15.5 percent in 1983 to 21.2 percent in 2016. For people of color, the trend has been even more disturbing. Over 32 percent of Latino families and 37 percent of black families have zero or negative wealth.

A third major point in the IPS report makes it clear that there are several of the members of the billionaire class that have been profiting from the COVID-19 pandemic. From the report:

This year’s Forbes report examines billionaire wealth as of March 18, 2020, a bit later than the February dates fixed upon in the magazine’s previous 33 annual reports. By April 5, two-plus weeks after March 18, U.S. billionaires had seen their collective wealth rise back to $3.017 trillion, and by April 10 their wealth had surged to $3.229 trillion, surpassing the 2019 level. Between March 18 — the near bottom point of the pandemic financial swoon — and April 10, 2020, U.S. billionaire wealth rebounded by $282 billion.

The Jeff Bezos Wealth Surge is an unprecedented dynamic in the history of modern markets. Tracking Bezos’ wealth requires a real-time hour-by-hour tracker. As of the publication of this report, Bezos’ wealth has increased over $25 billion since January 1, 2020 and $12 billion since February 21st, 2020, the beginning of the Covid-19 pandemic.

According to a recent piece on CommonDreams.org, despite Bezos $30 billion increase in wealth since January 1st, 2020, his company Amazon will stop paying workers the $2 an hour wage on June 1st, that the workers won on March 16th at the beginning of the pandemic. 

In addition to Jeff Bezos, other billionaires that have profited from the COVID-19 pandemic are Elon Musk (Tesla CEO), Eric Yuan (ZOOM CEO), Steve Ballmer (former Microsoft CEO) and John Albert Sobrato (Silicon Valley real estate mogul).

Grand Rapids Billionaires: DeVos and Meijer

The DeVos and Meijer families are not the only billionaires in Grand Rapids, but they are the wealthiest and the families that have tremendous political influence.

According to the 2017 Forbes 400 list, the combined wealth of these two families was $12.6 Billion – Doug & Hank Meijer were worth $7.2 Billion in 2018 and Richard DeVos was worth $5.4 Billion in 2018, the same year he died. Now, this doesn’t include the wealth of the other DeVos family members, which would easily put the total over $15 Billion between these two families.

What the combined wealth of the Meijer and DeVos family could translate into, is that NO ONE in Grand Rapids would have to worry about not working during the COVID-19 crisis, EVERYONE would have access to testing, proper health care, food, housing and any other basic needs. The JW Marriott just announced that they were closing, which means there are hundreds of empty bed that could be used by individuals and families who are facing a housing crisis right now. The wealth of the Meijer and DeVos families could translate into our ability in Kent County to truly flatten the curve and minimize the number of deaths from COVID-19.

Unfortunately, we know that the Meijer and DeVos families will not give up significant amounts of their combined $15 Billion in order to save lives in Kent County. These two families have demonstrated for decades that they are more interested in maintaining and expanding their wealth than they are in the well being of all residents of Kent County.

Yes, it is true that the DeVos family has contributed a few million to the Kent County Relief Fund, but that is like you and I donating $10. 

People reading this might be saying, “well, it’s their money, they can do what they want with it.” First, this completely ignores the fact that these two families made their wealth off the labor of others. Secondly, and more to the current crisis, the Meijer and DeVos families do not have the right to maintain their disgusting amounts of wealth, while countless numbers of people in Grand Rapids die from the COVID-19 virus. Their failure to act in the midst of this pandemic would be their real legacy.

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