Wealth in corporate equities and mutual funds among the wealthiest top 1 per cent increased by more than $6.5 trillion over the course of the coronavirus pandemic, according to the network’s review of Federal Reserve data.
The bottom 90 per cent of stockholders added a combined $1.2 trillion, underscoring the stock market’s role as both the largest source of wealth creation and biggest driver of wealth inequality among Americans.
While the market is broadly owned, its gains are not equitably administered, with critics arguing that its performance should not be seen as a short-hand indicator for people’s economic health or wellbeing.
The share of corporate equities and mutual funds owned by the top 10 per cent reached a record high in the second quarter of 2021, but the bottom 90 per cent held roughly 11 per cent of individually held stock, down a percentage point from before the onset of the public health crisis, the report found.
Total wealth held among the top 1 per cent now tops a record-high 32 per cent, with roughly 70 per cent of their wealth gains from the past 18 months coming from the stock market, according to the report.
The growing concentration of wealth among the nation’s wealthiest people has also seen the erosion of financial security and assets among middle-class earning households, which hold a smaller share of US wealth than the top 1 per cent.
Those 77 million households in the middle 60 per cent have seen their combined assets sink to 26.6 per cent of total wealth, according to Federal Reserve data analysed by Bloomberg.
The pace of the nation’s ultra-rich has accelerated during the Covid-19 crisis, which produced more than 100 new billionaires.
There were 614 people in the US with 10-figure bank accounts as of March 2020, according to a report from the Institute for Policy Studies and Americans for Tax Fairness. Now there are 745.
US billionaires got more than $2 trillion richer during the pandemic, with their collective fortunes now reaching more than $5 trillion, from just short of $3 trillion in March 2020 to $5 trillion by 15 October.
A recent investigation from ProPublica revealed that more than two dozen people paid a “true tax rate” of less than 4 per cent on a combined $400bn increase in their wealth between 2014 and 2018, while the median American household earned roughly $70,000 annually and paid 14 per cent in federal taxes.
A group of civil rights and labour organisations has urged Congress to include a Billionaires Income Tax as part of President Joe Biden’s Build Back Better legislation, a critical piece of his domestic agenda.
Senator Ron Wyden has proposed a tax on assets like stock for those whose wealth exceeds $1bn in an effort to target wealth that has largely escaped taxation. In a statement last month, Senator Wyden said the tax “would go a long way toward creating one fair tax code, rather than one that’s mandatory for working people and another that’s optional for the fortunate few.”