June 6, 2020; Washington Post
COVID-19 threw the economy into a tailspin. For 42 million Americans, the spread of the coronavirus meant the loss of a job and the need to fall back on unemployment insurance benefits while they waited to see whether their jobs would return as the pandemic eased. For many small business owners and nonprofit leaders, it has been a time to scramble for Paycheck Protection Program forgivable loans (i.e., grants) or other ways to stay afloat until times get better. Frayed safety net programs are stretched even farther, and there’s growing pressure on governments at all levels to find the resources. Fear and uncertainty have touched all of us.
Except for the billionaires. Even in these trying times, the rich have gotten richer and still further insulated from the challenges most Americans face. Their share of the economic pie has grown.
Billionaire Bonanza 2020, a study published this spring by Americans for Tax Fairness and Inequality.org—a project of the Institute for Policy Studies—found that billionaire wealth continued to grow even amid the pandemic. “Between March 18, the near bottom point of the pandemic financial swoon,” the report says, “and April 10, 2020, US billionaire wealth rebounded by $282 billion.” According to Forbes, by May 19, they had fared even better, as “the total net worth of the 600-plus US billionaires jumped by $434 billion, or 15 percent.”
This short-term bump in wealth concentration exacerbates a situation that has reshaped the economy and made building a fair and equitable society increasingly difficult.
While the economy may be recovering, wage earners and small business owners are likely to see progress at a slow, ragged pace. According to the Washington Post, “As millions of Americans return to work…they’re unexpectedly discovering their old positions are far more burdensome than they used to be. Their hours have been cut, their pay has been slashed and their responsibilities are now magnitudes greater. And their job security—despite President Trump’s recent proclamations about an economy on the mend—remains anything but guaranteed.”
With tax revenues hit hard, a new threat to jobs may come from state and local governments as they need to balance their budgets: “Last month alone, governments cut more than half a million jobs from their payrolls, according to the new federal data released Friday. The figure does not include those who have seen their hours and wages dramatically cut, putting their financial futures at risk.”
Wealth buys more than fancy homes and cars; it buys power and can prove corrosive to democratic values. The authors of Billionaire Bonanza have put forward a series of policy recommendations they believe can help even the scales. Among their recommendations are the following:
- Establish a Pandemic Profiteering Oversight Committee that goes beyond oversight of stimulus funds.
- Discourage wealth hiding through passage of the Corporate Transparency Act.
- Levy an emergency 10 percent Millionaire Income Surtax.
- Unleash a Charity Stimulus to mandate payouts of donor-advised funds and emergency 10 percent payout for private foundations for three years.
- Make the federal estate tax more progressive and institute a wealth tax,
- Shut down the global hidden wealth system.
As we seek to recover from COVID-19 and tackle the urgent need to redress the centuries-long legacy of racism, the need to address our nation’s growing wealth gap has never been greater—Martin Levine