Pandemic profits: Analysis shows the ultra-rich got ultra-richer as coronavirus hit
While millions are losing their jobs, the country's top billionaires are raking in the cash. | AP

WASHINGTON—Call it pandemic profits: A new report by the Institute for Policy Studies, the latest in its biannual series, shows the ultra-rich got ultra-richer in the months since the coronavirus pandemic hit the U.S. And the richest of them all, Jeff Bezos, profited big time from the ensuing crash.

Not that Bezos needed it. His net worth, as of May 7, is larger than the entire output, in cash, goods, and services—gross domestic product—from everyone in the entire state of Arkansas, combined.

Based on federal data from 1990 through early 2020, plus Forbes magazine’s list of the ultra-rich, their net worth, as opposed to straight income, increased by 1,130% in 2020 dollars. The net worth of the rest of us rose by 5.37% in those same 30 years, Billionaire Bonanza 2020 reports.

“In 1990, 66 U.S. billionaires held a total net worth of $118.8 billion, or $239.56 billion in 2020 dollars. The United States now hosts 614 billionaires with a total net worth of $2.947 trillion,” the report says. The top three of them, Bezos, Warren Buffett, and Bill Gates, have total net worth equal to that of the bottom 40%-50% of U.S. families, depending on that day’s reports from securities markets.

Bezos, who owns Amazon, leads the league. His numbers are so stupendous, though IPS doesn’t use that word, as to boggle the mind. His net worth grew by $25 billion from January 1 through mid-April, including $12 billion from mid-March to April 10 alone—while 20 million U.S. workers lost their jobs in those same weeks.

The latest estimate of Bezos’s net worth was $139.7 billion as of May 7, although his net worth bounces up and down with market gyrations. It was as low as $105 billion when the market plunged in March. That doesn’t count the worth of his ex-wife, Mackenzie. The report calculates it’s all in her share of Amazon, which rose by 10% from January 1-April 10, to $35 billion. She made the top 10, too.

Read the full report from the Institute for Policy Studies: Billionaire Bonanza 2020

To put that in perspective, Bezos’ net worth rose so much since the start of the year that his increase alone exceeded the entire economic output of Honduras, and his current net worth is larger than the gross domestic product of Arkansas ($135 billion, 35th among the states) and just behind Washington, D.C. (34th, $148 billion). There are no figures for net worth by state, because of too many variables.

And with traditional retailers shuttered and collapsing due to the pandemic and shutdown orders in 43 states plus D.C., Amazon, meaning Bezos, will be rolling in even more money, IPS predicts. That’s because Amazon’s become the alternative, even as its workers in its warehouses suffer the evils of low pay, no worker protections—Amazon is aggressively anti-union—for consumers needing basic products.

The report also notes recent million-dollar charitable donations, which garnered plenty of favorable publicity, from some of the ultra-rich to various causes, including combating the pandemic’s impact.

For example, Robert Kraft, owner of football’s New England Patriots, gained $40 million in net worth since the start of 2020—and used some to charter a plane to bring a load of personal protective equipment (PPE) to Massachusetts. GOP President Donald Trump, in retribution against yet another blue state, shorted Massachusetts’s requests for PPE such as face masks and testing kits.

Those million-dollar donations represent, however, a very small fraction of the net worth of the mega-billionaires, the report notes. Instead, their money has gone into politics and to hiring armies of lawyers, lobbyists, and accountants to preserve and enhance their privileges, and cut their taxes while denying net worth to the rest of us.

But the political spending numbers are uncertain, other than mountains of cash that billionaires Michael Bloomberg ($900 million) and Tom Steyer ($300 million) pumped into their losing runs for the 2020 Democratic presidential nomination. Much of the billionaires’ political spending goes into political “dark money”—unaccountable shadowy organizations created to conceal the capitalists’ clout.

Research shows Bezos gave $10.13 million to a shadowy SuperPAC, Open Secrets reported, but only two $2,700 contributions to one candidate, Sen. Maria Cantwell, D-Wash. Gates’ 18 contributions to candidates and political party committees totaled just over $14,000. Buffett’s were just over $1 million, also to candidates and party committees. Sam Walton, founder of Walmart, gave $345,700, all to candidates and some state political party committees.

What isn’t concealed, however, is that the billionaires benefited so much from the 2017 Trump-GOP tax cut that their effective tax rates are much lower than those for the rest of us.

“Between 1980 and 2018, the taxes paid by America’s billionaires, measured as a percentage of their net worth, decreased 79%,” IPS said. “By allowing their tax burden to plummet, policymakers let the nation’s net worth concentrate obscenely at America’s economic summit. Between 2006 and 2018, nearly 7% of America’s real increase in net worth went to just 400 billionaires.

“As we emerge from the pandemic with trillions in additional national debt, substantial tax increases will be inevitable. Our super-rich must bear their fair share of these increases,” IPS declares.

IPS advocated six steps to grab some of that net worth back from the super-rich, including “a Pandemic Profiteering Oversight Committee that goes beyond oversight of stimulus funds” to ride herd on Bezos and other profiteers, and enactment of the “Corporate Transparency Act,” HR2513, to shine light on shadowy offshore financial transactions. The Democratic-run House passed it last October.

IPS would also “levy an emergency 10% Millionaire Income Surtax” and enact a tax stimulus to force charitable giving to real charities, not “foundations” controlled by rich donors themselves. IPS also would increase the federal estate tax and make it more progressive, institute a net worth tax and would “shut down the global hidden net worth system,” which hides $21 trillion-$32 trillion from the federal government in offshore tax havens.

Without those curbs on the net worth of the ultra-billionaires, and the political clout that cash buys, U.S. democracy is in peril, the report warns.


CONTRIBUTOR

Mark Gruenberg
Mark Gruenberg

Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of Press Associates Inc. (PAI), a union news service in Washington, D.C. that he has headed since 1999. Previously, he worked as Washington correspondent for the Ottaway News Service, as Port Jervis bureau chief for the Middletown, NY Times Herald Record, and as a researcher and writer for Congressional Quarterly. Mark obtained his BA in public policy from the University of Chicago and worked as the University of Chicago correspondent for the Chicago Daily News.

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