Cross-posted from Robert Reich Blog
Being Rich VS Being Poor
(image by YouTube) DMCA
In a new Pew poll, more than three quarters of self-described conservatives believe "poor people have it easy because they can get government benefits without doing anything."
In reality, most of America's poor work hard, often in two or more jobs.
The real non-workers are the wealthy who inherit their fortunes. And their ranks are growing.
In fact, we're on the cusp of the largest inter-generational wealth transfer in history.
The wealth is coming from those who over the last three decades earned huge amounts on Wall Street, in corporate boardrooms, or as high-tech entrepreneurs.
It's going to their children, who did nothing except be born into the right family.
The "self-made" man or woman, the symbol of American meritocracy, is disappearing. Six of today's 10 wealthiest Americans are heirs to prominent fortunes. Just six Walmart heirs have more wealth than the bottom 42 percent of Americans combined (up from 30 percent in 2007).
The U.S. Trust bank just released a poll of Americans with more than $3 million of investable assets.
Nearly three-quarters of those over age 69, and 61 per cent of boomers (between the ages of 50 and 68), were the first in their generation to accumulate significant wealth.
But the bank found inherited wealth far more common among rich millennials under age 35.
This is the dynastic form of wealth French economist Thomas Piketty warns about. It's been the major source of wealth in Europe for centuries. It's about to become the major source in America -- unless, that is, we do something about it.
As income from work has become more concentrated in America, the super rich have invested in businesses, real estate, art, and other assets. The income from these assets is now concentrating even faster than income from work.
In 1979, the richest 1 percent of households accounted for 17 percent of business income. By 2007 they were getting 43 percent. They were also taking in 75 percent of capital gains. Today, with the stock market significantly higher than where it was before the crash, the top is raking even more from their investments.
Both political parties have encouraged this great wealth transfer, as beneficiaries provide a growing share of campaign contributions.
But Republicans have been even more ardent than Democrats.
For example, family trusts used to be limited to about 90 years. Legal changes implemented under Ronald Reagan extended them in perpetuity. So-called "dynasty trusts" now allow super-rich families to pass on to their heirs money and property largely free from taxes, and to do so for generations.