Over the past few months, Bernie Sanders has repeatedly declared that the top one-tenth of 1 percent of U.S. earners own nearly as much wealth as the bottom 90 percent. That claim has drawn the skeptical scrutiny of PolitiFact, which attributed it to a study by Emmanuel Saez and Gabriel Zucman late last year. PolitiFact's verdict: Mostly True.
But a new study released Wednesday by the Institute for Policy Studies shows that Sanders is spot on-and that he may even be underestimating the nation's yawning wealth gap. Not only do the top one-tenth of 1 percent of Americans own more than most Americans put together, but the nation's top 20 richest people own as much wealth as the entire bottom half of U.S. earners. That's a sliver about 15,000 times smaller than the already superrich one-tenth of 1 percent.
Put another way, the 20 individuals who possess more wealth between them than 152 million Americans can fit together comfortably inside one Gulfstream G650 luxury jet. And just who are these 20? Not surprisingly, the list includes the likes of Microsoft co-founder Bill Gates; billionaire industrialists Charles and David Koch; casino magnate Sheldon Adelson, and Berkshire Hathaway CEO Warren Buffett.
Konstantin von Wedelstaedt/Public Domain
"It's a stunner," says the study's coauthor Chuck Collins, a senior scholar at the Institute for Policy Studies, a progressive think tank. "I think people haven't fully connected the dots until now."
While previous studies, like the Saez-Zucman paper that bolsters Sanders' claims, have used Federal Reserve data on household wealth to explore stratification, Wednesday's report for the first time compares those figures with a much smaller group, namely the Fortune 400 annual list of the wealthiest Americans. That group has a combined net worth of $2.34 trillion, the study found, more than a full 62 percent of Americans-more also than the nation's entire black population.
But staggering as they are, these figures still don't paint the full picture, says Collins. That's because they only represent taxable wealth that is not held in offshore accounts or siphoned through complex tax loopholes. According to a separate study published earlier this year by the Boston Consulting Group, offshore tax havens represent as much as $10 trillion globally, with as much as one quarter of that held by individual Americans. That pool of secret wealth accounts for $200 billion in lost tax revenue every year, while another $100 billion is lost through such complex loopholes as the Grantor Retained Annuity Trust, a financial instrument that allows wealthy families to avoid gift taxes on large estates.
"It may be that we're only seeing half the wealth," says Collins. Moreover, he adds, publicly disclosed wealth is shrinking while undisclosed offshore assets expand: "Going forward, more of this wealth is going to vanish into these tax havens and trusts beyond the reach of any kind of reporting."
Part of the study's purpose, says Collins, is to put the debate over wealth inequality into a larger context. While such issues as the minimum wage and student debt tend to dominate the debate, other more arcane forces that concentrate wealth, such as tax avoidance and antitrust policies, draw less notice.
"It's harder for the media to talk about those issues," says Collins. "Part of our motivation for this study is to say we can raise the floor but we have to tackle these concentrations of wealth or they will continue to distort the democratic process."
