Accounting
American ‘oligarchy’ decried by Biden gained $1.5T
The very richest Americans are among the biggest winners from President Joe Biden’s time in office, despite his farewell address warning of an “oligarchy” and a “tech industrial complex” that threaten U.S. democracy.
The 100 wealthiest Americans got more than $1.5 trillion richer over the last four years, with tech tycoons including Elon Musk, Larry Ellison and Mark Zuckerberg leading the way, according to the Bloomberg Billionaires Index. The top 0.1% gained more than $6 trillion, Federal Reserve estimates through September show.
Biden warned of “a dangerous concentration of power in the hands of a very few ultra wealthy people,” in his
During his term, the super-rich grabbed a bigger share of a growing pie. Stock and housing markets boomed during a post-pandemic rebound that outpaced U.S. peers. It left all the income and wealth groups
Measured in straight dollars, that increase was slightly bigger than the one recorded under Biden’s predecessor and soon-to-be successor, Donald Trump. But inflation complicates the picture. The spike in prices over the last few years means that wealth rose faster during Trump’s term in real, purchasing-power terms, as did the median household income.
Under both presidents, the top U.S. billionaires did far better than almost everyone else.
The richest 100 Americans saw their collective net worth surge 63% under Biden, according to an analysis that covers the four years between his 2020 win and Trump’s re-election last November, and excludes another 8% jump since then.
The 100 largest fortunes combined now exceed $4 trillion — more than the collective net worth of the poorest half of Americans, spread over 66.5 million households. The share of U.S. wealth owned by the top 0.1%, at nearly 14%, is now at its highest point in Fed estimates dating back to the 1980s.
“Those at the top of the income distribution often do well during periods of strong economic growth,” Kimberly Clausing, a University of California at Los Angeles law professor and economist who served in Biden’s Treasury Department, said in an email. “Recent U.S. innovation and productivity growth have helped fuel these high returns.”
The U.S. stock market has nearly tripled over the last eight years, with several huge technology stocks leading the way, a trend that exacerbates inequality. The Fed estimates that almost nine-tenths of stock and mutual fund holdings are in the hands of America’s top 10%.
In his speech Wednesday, Biden warned of a “tech industrial complex that could pose real dangers to our country.”
Under Trump, technology billionaires on Bloomberg’s index doubled their net worth. Four years later their collective fortunes had nearly doubled again, to more than $2 trillion.
‘Almost a parody’
Among them is Musk, one of Trump’s most enthusiastic supporters, and also the biggest individual winner by far of Biden’s time in office.
Now holding an estimated fortune of $450 billion, Musk was worth barely $100 billion on election day 2020. Then his wealth surged, doubling in a couple of months to make him the world’s richest person by the time Biden was inaugurated. It’s since more than doubled again — including a $186 billion increase since Trump’s victory, which has left the owner of Tesla and X close to the levers of power.
Musk, who donated at least
“With wealth comes large amounts of power,” says Boston College law professor Ray Madoff. “With Elon Musk, it’s almost a parody.”
Three in five Americans believe rich people have too much political influence, according to a Pew Research Center
It’s one that has “dogged the country for about 125 years, since the first industrial revolution,” according to Madoff. One key difference from earlier periods, she says, is that the tax system is “no longer serving as a counterbalance to the growing wealth inequality.”
Biden ran for office promising to boost taxes on the wealthy and close loopholes.
In his first State of the Union address, the president said he disagreed with some fellow Democrats who had questioned whether billionaires should exist at all. “I think you should be able to become a billionaire and a millionaire, but pay your fair share,” he said, adding his goal was to “grow the economy from the bottom and the middle out” and to “reward work, not just wealth.”
Most Biden administration tax proposals weren’t adopted by Congress, however, including an
UCLA’s Clausing said several Biden policies did reduce wealth and income disparities, including the temporary expansion of the child tax credit, a new levy on stock buybacks and a corporate alternative minimum tax.
‘What goes up…’
A key source of gains for Americans lower down the ladder is housing — the other main driver of U.S. wealth, along with financial assets, and one that’s much more evenly distributed across households.
Fed data show the bottom 90% of Americans own 56% of real estate holdings, compared with less than one-third of total wealth. The value of those working- and middle-class properties is up 47% since Biden took office, more than twice the rate of inflation.
Left behind during both Trump and Biden’s terms are the least educated Americans. The share of national wealth held by people without college degrees slipped under both presidents, and now is at the lowest level on record.
That trend could be exacerbated by the adoption of artificial intelligence, with the potential to kill jobs while boosting corporate profits, according to Patrick Artus, a senior advisor at asset manager Ossiam. The future course of inequality “very much depends on your assumptions about the effects of AI,” he said.
John Cochrane, a senior fellow at the Hoover Institution, doesn’t see any harm to the economy or political system from billionaires with “paper wealth left invested in valuable companies that employ Americans and provide great products.”
Anyway, he says, these gains won’t necessarily last. “What goes up can come down.”
The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
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