As billionaires’ numbers rise, their political power grows. This trend must be halted.

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** Economy Remix: What Can Be Done to Restrain Billionaire Wealth?
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Welcome to the Remix, as we take our latest spin around the economy. This Remix column ([link removed]) examines the growth of billionaire wealth, some factors behind that growth, and some of the consequences. It is a big topic, and one column cannot hope to cover every aspect of it. But the implications are profound. Back in 1980, there were 13 billionaires in the United States. Today, there are over 700. Yes, inflation is one factor in this increase, but it’s not the most important one. Rather, wealth has been becoming ever more concentrated. Even worse, the effects of wealth are corrosive and grow over time—affecting democracy, the nonprofit sector, and more.

One trend is the consolidation of “dynastic wealth.” The 2023 Billionaire Ambitions report by UBS, a global wealth management firm that serves billionaire clients, highlights the trend. According to UBS, 2023 was the first year more new billionaires' wealth was generated through inheritance ($150.8 billion) than through business earnings ($140.7 billion). The UBS report authors note that the numbers will fluctuate year by year, but the trend is in favor of inherited wealth becoming more important over time. Worldwide, 1,023 of the world’s billionaires are over 70 years old; they have over $5.2 trillion in assets. If most of them, as expected, pass on their wealth to their children, the consolidation of wealth in dynastic families would surely result. Worse, as the UBS authors document, the second (and third, fourth) generations of dynastic families are far less likely to donate their wealth than the first generation. In short, once dynastic wealth is consolidated, it is very difficult to
dislodge.

How did this occur? There are multiple paths. Here I look specifically at a couple of reports from the Institute of Policy Studies—one that focuses on how corporate CEOs use stock buybacks to boost their pay—and the other on how the wealthy manipulate charitable contribution laws (particularly by donating stock and other capital assets to donor-advised funds) to maximize their tax write-offs while minimizing constraints. These two phenomena may seem unrelated, except that: 1) they involve many of the same people, and 2) they both use tax law manipulation to maximize wealth.

One sign of what is at stake: US corporate income tax collection is down to 1.6 percent of GDP—about half of the current Canadian level. Current corporate income tax revenues are $425 billion, so double that would be a considerable chunk of change.

In reading this article ([link removed]) , I encourage you to consider how movements today might mobilize to restore a modicum of democratic control over the economy and politics.

Until the next Remix column, I remain

Your Remix Man:

Steve Dubb
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