Friday, December 9, 2011

Wow - The 6 Wal-Mart Heirs Are As Rich As the Poorest 90 Million Americans

Holy Enormous Wealth Inequality, Batman!

From Berkley, via ThinkProgress, we learn that the 6 Wal-Mart heirs have the same amount of wealth as the poorest 90 million Americans (30% of the US population):
The triennial Survey of Consumer Finances (SCF) is one of the best sources for data on wealth in the U.S. And, of course the Forbes 400 estimates the worth of the wealthiest amongst us—all 400 wouldn’t be captured in the SCF. If we look at both the SCF and the Forbes 400 we can glean some interesting insights.
In 2007 (the most recent SCF) the cumulative wealth of the Forbes 400 was $1.54 trillion or roughly the same amount of wealth held by the entire bottom fifty percent of American families. This is a stunning statistic to be sure.
Upon closer inspection, the Forbes list reveals that six Waltons—all children (one daughter-in-law) of Sam or James “Bud” Walton the founders of Wal-Mart—were on the list. The combined worth of the Walton six was $69.7 billion in 2007—which equated to the total wealth of the entire bottom thirty percent!
For those of you out there who learn better visually:

Don't worry, all you nay-sayers out there - I'm sure these 6 fabulously wealthy people worked really hard for all their riches, and that their obscene wealth has nothing to do with the fact that they were lucky enough to be born into the top 0.00000002%.

But seriously, which outcome would be more beneficial for both society and the economy - for these 6 people to control that much wealth, or for the net worth of the poorest 30% of Americans to double? The fat cats themselves admit that things would be better off if there wasn't so much wealth inequality in the US. The wealth inequality in this country is so preposterous, I can't wrap my brain around it.

Sigh ... I now understand why Andrew Carnegie (yes, THAT robber baron Andrew Carnegie) advocated for extremely high estate taxes:
While more suspicious of government intervention than Paine, Andrew Carnegie heartily endorsed estate taxes. The greater part of this steel magnate’s little magnum opus, The Gospel of Wealth, is devoted to a discussion of the three possible ways to dispose of wealth: (1) leave it to the families of decedents, (2) bequeath it for public purposes, and (3) administer it during one’s life. Carnegie abhorred the first, tolerated the second, and encouraged the third.

He asks his reader: “Why should men leave great fortunes to their children?” If it is from affection, then it is a misguided affection because “great sums bequeathed often work more for the injury than the good of the recipients.” The instances of public servants that live off their wealth in order to devote themselves to community service are rare. “It is not the welfare of the children, but family pride, which inspires these legacies.”

Carnegie sharply distinguishes between the intended consequence of the inheritance tax (to create funds for public purposes) and its unintended consequence (private philanthropy). The unintended effect of the tax is “to induce the rich man to attend to the administration of wealth during his life.” Wealth is a trust fund for the community that helps the rich “dignify their own lives.”

According to Carnegie, philanthropy in a capitalist economy solves the problem of rich and poor alike. “The laws of accumulation will be left free, the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee for the poor.” Carnegie concludes his famous tract with the words: “The man who dies rich dies disgraced.”

Carnegie practiced what he preached and gave away more than 90 percent of his estate before his death, leaving a modest trust fund for his family. He included a trust fund for Theodore Roosevelt’s widow because the government at the time made no provision for the wives of former presidents.
I guess Sam and Bud Walton died horribly disgraced.

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