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VIDEOWhere Have All the Billionaires Gone?
By
Scott Reeves Mar 12, 2009 10:40 am
Less wealth for the wealthiest means less wealth for all.
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Such reports miss an obvious point: Without the super-rich, who would Uncle Sam and other governments tax through the nose?
In the US, the top 1% of earners pay about 40% of all income taxes, and the top 5% pay about 60% of all taxes.
Then there’s the matter of spending in an economy where about 66% of the US Gross Domestic Product represents consumer spending. When top earners spend on houses, cars, yachts, clothes, watches and fancy restaurants, everyone benefits; wealth trickles down. Come to think of it, when those at the top of the income pyramid start spending again, the economy will begin to rebound.
Forbes reports there are 332 fewer billionaires today than a year ago. This year, the average net worth of the world’s billionaires is estimated at $3 billion, down 23% in 12 months.
New York Newsday sneers, “Just as heartbreaking: The world’s richest people aren’t as rich as they were a year ago.”
Let’s hear it for class warfare!
Many of those who cheer the declining wealth of top earners generally assume that higher tax rates don’t change behavior. What if talented people stop knocking themselves out to earn that next buck, and tax revenue plunges? Here’s betting the spendthrifts in Congress would be forced to tax the bejabbers out of schlubs like us, because government spending only moves in one direction - up.
For the record, Microsoft (MSFT) founder Bill Gates has regained his perch as the world’s richest man. Forbes estimates his wealth at $40 billion, down $18 billion from last year.
Investment guru Warren Buffett fell to second place after taking a $25 billion bath, due to the declining value of Berkshire Hathaway (BRK-A) stock. He’s still worth about $37 billion.
Carlos Slim Helu, Mexico’s richest man -- who recently became a major shareholder and lender to the New York Times Company (NYT) -- is the world’s third ranking billionaire. Not a bad outcome for a man who lost $25 billion last year. Relax - he’s still got $35 billion to play with.
Larry Ellison, the University of Illinois dropout and purported megalomaniac who launched Oracle (ORCL) software, is the world’s fourth ranking billionaire, with $22.5 billion in his pocket.
Ingvar Kamprad, the confirmed eccentric who launched Ikea, is the worth’s fifth-richest man, with $22 billion.
New York’s mayor, Michael Bloomberg, is ranked number 17. The founder of the financial-news service bearing his name saw his net wealth rise to $16 billion from $11.5 billion last year.
Overall, Americans account for 44% of the wealth at the top and 45% of those on the Forbes list, up 7 and 3 percentage points from last year.
In F. Scott Fitzgerald’s The Great Gatsby, Nick Carraway muses, “The rich are different from you and me.”
Yup. Turns out they’ve lost more money in the sour worldwide economy and still have more left over than most mere mortals combined. Life is unfair.
No positions in stocks mentioned.
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