It’s been a full decade now since I first predicted or, really, warned, that America would have its first trillionaire before 2040.
I stand by that warning today. Unfortunately, everything I said ten years ago has aged well. Too well, in my opinion. I explained how tax policy was supercharging the accumulation of obscene fortunes in America. Policy makers, I noted, had lifted the lid on wealth accumulation by the super rich by decreasing taxes on income from capital and inheritance taxes. Not only did that policy failure continue, it became substantially worse with the passage of the Tax Cuts and Jobs Act in 2017.
It didn’t take long for others to see this ominous trend as well. Just one year later, several experts interviewed by CNBC recognized the distinct possibility the world would have its first trillionaire by 2039, the year CNBC would turn 50.
Those experts offered various explanations how it would happen, with a common prediction being that it would “take several Bill Gates-like successes from one individual to reach the trillion-dollar mark.” I saw it differently, telling CNBC: “It might take the founder of five of today’s Microsofts to reach a trillion, but we’re going to see larger and larger Microsofts.”
More recently, the idea that a larger Microsoft would deliver our first billionaire has gained traction. Three years ago, USA Today reported on predictions that Amazon would raise Jeff Bezos’ wealth to trillionaire level as early as 2026.
Although those predictions likely were a bit aggressive – Bezos’ wealth climb leveled off since then – they may have been beneficial in an odd way. Historically, far too many Americans have looked at billionaire wealth the way they look at sports, as I noted in 2014:
The super-rich are setting new records, $10 billion, $50 billion, and soon enough $100 billion. Rather than objecting, our nation celebrates the increasingly obscene fortunes of the super-rich as we do athletes breaking sports records.
Reaching $1 trillion will be what hitting 73 home runs was before we knew Barry Bonds cheated to get there.
Will our first trillion-dollar fortune also be tainted by misdeeds of the achiever? Could that be what finally wakes us from our slumber?
In 2020, when Americans were dying in large numbers from the pandemic, Bezos was to billionaire wealth hoarding what Barry Bonds was to home run records. As noted by the USA Today, the reporting on Bezos becoming the first trillionaire occurred when Amazon workers were publicly protesting over safety issues.
Which caused the appropriate response to his predicted trillionaire status – anger – at least on Twitter. One tweet disdainfully noted: “Jeff Bezos will some time in the near future have more money than the Netherlands. Totally normal. Nothing out of order here.” Another considered a headline announcing Bezos’ impending trillionaire status the most “disgusting and disturbing” he’d seen.
The reaction to trillionaire talk three years ago, unfortunately, may have been an anomaly, not the turning point I hoped it would be.
Recently, the Motley Fool, a financial and investing advice company, has promoted investment in a corporation it suggests could be as large as 17 Amazons, with a market capitalization of $17 trillion, which would create the world’s first trillionaire. The promotional material doesn’t give the name of the corporation. To find it, you’d at least need to provide an email address, which would mean lots of unwanted promotional emails. Apparently, this corporation has technology that could supercharge artificial intelligence, or AI.
But the identity of the corporation or the founder who stands to become the first trillionaire isn’t the point here. After all, absent significant reform of America’s tax policy, we will see our first trillionaire, probably not much more than a decade from now.
Worse, too many folks may think that’s a good thing. In its promotional ad, Motley Fool notes how excited investors and billionaire class members are about the prospect of a $17 trillion corporation headed by a trillionaire. If you believe the material, the super rich are excited and anxious to invest, as if the super rich becoming richer is a good thing.
Most troubling, though, is that the prospect of someone achieving a net worth over $1 trillion is used as a selling point by Motley Fool. What makes this sort of advertising work is that there are millions of investors out there who emulate the billionaire class.
Which brings us back to tax policy. Halting, then reversing, the obscene concentration of wealth in America will require Americans in overwhelming numbers to demand real tax reform. That’s what will be required to overcome the political power of the billionaire class. Without that tax reform, the concentration of wealth will worsen and, before we know it, we’ll see the arrival of our first trillionaire.
And as our concentration of wealth worsens, the political power of billionaires will continue to increase.
The challenge here is that we’ll never have the collective mentality, as a nation, to take on the ultra-rich if millions of Americans identify with them and see the chase to become the first trillionaire the same way they do a football team’s pursuit of an undefeated season. We see this identification in the response of everyday Americans to estate tax reform. In large numbers, they oppose the estate tax because they think it will apply to them one day.
To be sure, many Americans do understand the perils of concentrated wealth. But to make real progress on tax reform, it won’t be enough to have a bare majority of Americans oppose extreme wealth concentration and support higher taxation of the rich. We need to reach the point where for every average American citizen who sees billionaires as role models, another ten see them as the wealth hoarders they are.
Which means that the prospect of an American trillionaire should be feared, not cheered.