Global super-rich stash: Now $25 trillion

mocking ows

WASHINGTON - Still another financial firm has tallied how much net worth is sloshing in the pockets of the world's most spectacularly wealthy. So when will the time finally come to stop the counting - and start the taxing?

In today's astoundingly unequal global economy, banks can go either of two routes - or both - to bag ever-larger returns. They can squeeze the 99 percent with nuisance fees and penalties. Or they can cater to the richest of the rich.

But both routes have bumps. The 99 percent can squeeze back, as they did earlier this month when Americans by the tens of thousands shut down their Bank of America accounts to protest the bank's $5 debit card greed grab.

As for the richest of the rich? To cater to these fortunates, you first must find them; that can be difficult.

Fortunately, financial industry consulting firms have stepped up to help. These firms have started publishing annual global wealth surveys that pinpoint where banks - and luxury retailers and anyone else who wants in on top one percent action - can find "high" and "ultra-high" net-worth individuals.

Last week, a new global firm, the Singapore-based Wealth-X, entered the global wealth survey fray, joining a crowded field that already includes Capgemini and Merrill Lynch, the Boston Consulting Group, Credit Suisse, and Deloitte LLP.

Each of these firms has tried to carve out a unique market niche. The Wealth-X specialty? The world of the ultra rich, those individuals who can claim at least $30 million in net worth. And the researchers at Wealth-X haven't just counted these ultras in their first annual global wealth census. They've tiered them.

For the entire world - and major nations - Wealth-X teases out subsets of the super rich, from the $30 million-to-$50 million set to the $1 billion and up.

For the first time, thanks to Wealth-X, one can compare the barely ultra with the comfortably ultra and those super ultras who can make the comfortables seem pinched.

"Our report maps exactly where the biggest money is located," Wealth-X CEO Mykolas Rambus boasted at a Geneva news conference last week, "and just how much there is."

The Wealth-X research answers "how many" as well. The firm counts 185,795 individuals worldwide with at least $30 million net worth. These ultra-high net-worth individuals - UHNWs - hold $25 trillion in combined wealth.

The global economy may be tottering, as the new Wealth-X World Ultra Wealth Report 2011 goes on to inform, but the "lifestyle habits of UHNW individuals have not been severely impacted."

"Simply put," the Wealth-X analyst team gushes, "the world's wealthy elite are in a class of their own."

In that class, Americans pack a bunch of the rows. Of the near 186,000 global ultra rich, 57,860 - 30 percent - carry U.S. passports. These American ultras hold a combined net worth of $7.6 trillion, an average of $131.4 million each.

That average masks a huge concentration of wealth at America's summit.  The 455 deep-pocketed Americans worth at least $1 billion hold half a trillion more in wealth than the 29,415 Americans in the Wealth-X $30 million-to-$50 million tier.

These numbers need a bit more context to have any real meaning, and we can take a stab at providing that context by glancing over at the "super committee" deficit-reduction deliberations now underway in Washington, D.C.

The 12 lawmakers on this congressional super committee - six Republicans and six Democrats - are trying to trim $1.2 trillion off federal red ink over the next ten years. On their chopping block: Medicare, Social Security, and assorted other programs essential to the wellbeing of America's other 99 percent.

The super committee reporting-out deadline comes Nov. 23. No one knows how much budget-cutting pain the panel will be recommending. But panel members could actually avoid all that pain - and raise over $1 trillion in new money for investing in America - simply by subjecting all U.S. individual net worth over $30 million to a modest wealth tax.

Our U.S. ultra-wealthy, Wealth-X calculates, together hold almost $5.9 trillion over this $30 million threshold. An annual five percent wealth tax on this overage would raise over $293 billion a year, or $2.9 trillion over the next decade - more than double the $1.2 trillion the super committee is so desperately looking to find.

The most amazing part of this? America's ultra-rich could easily pay this five percent annual wealth tax for the next ten years and remain as rich as ever.

That's because wealth begets wealth. All those trillions of dollars America's ultras currently hold don't sit under some mattress. The ultra-wealthy have those trillions invested in assets that generate short-and long-term returns.

If America's ultras averaged returns on those investments not that far above five percent over the next ten years, they could pay the wealth tax and still end the decade with higher personal net worths than when the decade began.

Back in the 1990s, a public-spirited financial industry superstar, multimillionaire San Francisco money manager Claude Rosenberg, spent a sizeable chunk of his personal fortune campaigning to get a similar message across about the enormous wealth of the wealthy.

Rosenberg's particular point: America's fabulously rich could hike their annual contributions to charity by tenfold and still end up with higher personal fortunes. Rosenberg started a research group dedicated to sharing this message and the analysis behind it. He wrote a book and peppered the periodicals that rich people read with op-eds that detailed his group's number crunching.

In the year 2000, Rosenberg's researchers would document, households with $1 million or more in income could have given $128 billion more to charity than they actually did in fact give, without losing any net worth over the course of the year.

Claude Rosenberg died three years ago at age 80, with his message to the super-rich essentially totally ignored. The vast increase in charitable giving by the rich he had hoped to inspire never materialized.

So what is the message to the rest of us from Rosenberg's noble effort?

The excess wealth our ultra wealthy hold, if put to the public good, could change the trajectory of America's future. The ultra-wealthy don't seem to be willing to do that on their own. But with a few tweaks of our tax code, we could do that for them.

Photo: Screen shot from YouTube video "Wall Street Mocks Protesters By Drinking Champagne."

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  • I'm hungry. Nothing left to eat but the rich. Let's have open season on these long pigs.

    Posted by Robert Anderson, 12/06/2011 2:20pm (3 years ago)

  • First I think the Rob George comment is worthy of the wall and could serve as a catalyst for a new party devoid of the self-serving Political Caste now in Washington.
    I would hope within the think tanks that follow the money the world will be exposed to those Financial Groups who control money through the Federal Reserve System. One has to assume these groups determine who gets money,how much and when leaving the rest of us out.
    Don't forget how much insider trading is going on in Washington with Corporatism and Cronycapitalism feeding the policy makers.

    Posted by SwampFox2U, 11/23/2011 12:25pm (3 years ago)

  • Go, Sam, Go!

    Those Wall Streeters will eventually learn what a healthy human high feels like.

    The global #Occupy Movement does indeed protest against the very unnatural and harmful aspects of essentially all economic systems of essentially all countries on this multi-dimensionally polluted and unconscionably raped Planet Earth.

    More importantly, they have successfully sketched (in very limited space) why it must be stopped, by any means necessary, even if that includes the most painful of methods, i.e., rational and comprehensive thought. Or, as John Kenneth Galbraith laconically put it, “The conventional view serves to protect us from the painful job of thinking.”

    The dramatic display of rising consciousness and courage evinced by #Occupy is confusing to a few and terrifying to a few others. This is certainly predictable and simply emphasizes the essential nature of the necessary endeavor. The present unquestionably imperfect stage of the evolving #Occupy process is taking place on a very imperfect planet, which seems to escape the “But, but, but…” Crowd, who evidently can only seize the moment to publicly demonstrate their personal confusions and conflicts. We must be intolerant of the devastation but tolerant of the devastators.

    We therefore wish to congratulate, encourage and support all fellow humans contributing to the success of the essential global #OWS Transformation of Planet Earth. With regard to the, shall we reservedly say, “shortcomings” and “unnatural aspects” of the planet’s sick economic systems, our primary suggestion for this necessary endeavor is the adoption of Socioeconomic Democracy as a peaceful, just and democratic resolution of the myriad problems confronting humanity.

    Most certainly, numerous other fundamental changes are required, with some encompassing the many problems created by contemporary "money" and "banking" definitions and arrangements. The implementation of Socioeconomic Democracy will significantly help facilitate these and other necessary transformations.

    Socioeconomic Democracy is a theoretically consistent and practically implementable socioeconomic system wherein there exist both some form and amount of locally appropriate Universally Guaranteed Personal Income and some form and amount of locally appropriate Maximum Allowable Personal Wealth, with both the lower bound on personal material poverty and the upper bound on personal material wealth set and adjusted democratically by all participants of a democratic society.

    As has been demonstrated elsewhere, Socioeconomic Democracy can eliminate or significantly reduce a multitude of serious-to-deadly, but utterly unnecessary, intimately intertwined societal problems including (but by no means limited to) those familiar ones associated with: automation, computerization and robotization; budget deficits and national debts; bureaucracy; maltreatment of children; crime and punishment; development, sustainable or otherwise; ecology, environment, resources and pollution; education; the elderly; farcical "free-market" fantasies; the feminine majority; inflation; international conflict; intranational conflict; involuntary employment; involuntary unemployment; labor strife and strikes; sick medical and health care; military metamorphosis; natural disasters; pay justice; planned obsolescence; political participation; poverty; racism; sexism; so-called "Offshoring" of both jobs and personal/corporate profits; unconscionable Empires; unconscious politicians; untamed technologies; and the General Welfare.

    A few, of many, relevant links:

    "A Democratic Socioeconomic Platform in search of a Democratic Political Party"
    http://www.centersds.com/dsep.html

    Socioeconomic Democracy: An Advanced Socioeconomic System (Praeger Studies on the 21st Century, 2002)
    http://www.centersds.com/thebook.htm

    "Bibliography of Socioeconomic Democracy"
    http://www.centersds.com/biblio.htm

    "Socioeconomic Democracy: A Nonkilling, Life-Affirming and Enhancing Psycho-Politico-Socio-Economic System"
    http://www.pelicanweb.org/solisustv06n10page2robleygeorge.html

    We welcome and encourage feedback to this outreach, and look forward to working with all-but-only those seriously interested in further peaceful development and implementation of these and other necessary changes aimed at the betterment of all humanity and the total planet.

    Rob George

    Director, Center for the Study of Democratic Societies
    http://www.CenterSDS.com

    Coordinador, Nonkilling Economics and Business Research Committee
    http://www.nonkilling.org/node/7

    Posted by Rob George, 11/18/2011 4:43pm (3 years ago)

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