The Fed’s wealth distribution data divide the US population into four groups by wealth: The “Top 1%,” the “Next 9%” (2% to 10%),” the “next 40%,” and the “bottom 50%.” My Wealth Effect Monitor divides this data by the number of households in each category to obtain the average wealth per household in each category.
Note the immense increase in the wealth for the 1% households after the Fed’s money-printing scheme and interest rate repression started in March 2020. See this in the chart below and learn more here.
As you can see from the steep curve of the red line, the “Top 1%” households were the primary beneficiaries of the Fed’s policies since March 2020. These policies were designed to inflate asset prices, and only asset holders benefited from that. The more assets they held, the more they benefited.
Today, the 10 richest people in the world control $1.3 trillion in wealth. This scale of wealth is equal to approximately 1.4% of the world economy. The top 10 richest have doubled their wealth from just two years ago ($663 billion). As billionaire wealth accumulates at a remarkable speed, the below chart features a snapshot of the world’s richest in 2022, based on data from the Forbes Real-Time Billionaires List. Learn more here.
Never fear the Democrats are coming to the rescue. The Biden administration is proposing a new “Billionaire Minimum Tax.” But, it is deceptive from the start – learn more here.
- First, it doesn’t just affect billionaires; it applies directly to households with more than $100 million in assets putting a 20% mandatory tax on income and unrealized capital gains.
- Secondly, it will adversely affect the stock market and hurt a multitude of regular folks with retirement accounts and mutual funds. This proposal will attack significant players in the market who hold millions of shares of stock in major companies by forcing them to pay capital gains on investments (stocks and homes) they have not yet sold.
The clear answer is not to distort the free market with endless radical Fed money printing policies and endless government spending and taxing policies. Rather return to sound momentary policies and government balanced budget. If we would do this, wealth inequality would largely disappear.
Unfortunately, the radical Fed and our current Leftist government are just one more policy to achieve economic utopia … 😉
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