Sears: "While the economy is still sour for the vast majority of Americans, and for most of the rest of the world as well, the world's billionaires appear to be doing quite nicely. Forbes published is 24th annual list of the world's richest people today. And, though the stock market crash caused a sharp drop in the number of billionaires from 1,125 in 2008 to just 793 last year, like an endangered species in an ideal environment, their numbers are close to being fully restored.
There are now 1,011 citizens of the world with wealth topping seven figures, and the 10 richest--3 of them are Americans--all saw their wealth increase by a total of $342 billion. So if the rest of us are still struggling to get by, why are those who don't need to struggle at all doing so well? Mike Lapham, Director of the Responsible Wealth project at United for a Fair Economy says for the American billionaires, at least, the answer is a combination of several factors."
Lapham: "We have a society that, in general, disproportionately values certain types of work over others. We also give a lot of tax advantages to investment over earned income. For example, the wealthiest folks are getting a huge portion of their income in capital gains. Starting back in 1997, we cut the capital gains rate from 28 percent to 20 percent. We cut it even further under George Bush down to 15 percent.
So if you're one of the top 400 taxpayers, you probably have about two-thirds of your income in capital gains and you're getting taxed a much lower rate than you're getting taxed on other things. That's one of the simplest ways that wealthy folks are amassing more and more wealth. But, if you're in one of the bottom quintiles in our society, you're paying almost all of your income on basic necessities...so you're not gaining much year over year.
The folks at the very top have figured out how to invest in things that are sheltered. They can invest in things that give them tax credits. They can take advantage of loopholes with the amount of money that they have that the average person just doesn't have. [...]"