The world’s richest families are teaching their children to hoard their wealth to maintain “dynasties” of billionaires, a new report has found.
The Silver Spoon Oligarchs: How America’s 50 Largest Inherited-Wealth Dynasties Accelerate Inequality report was released last week, and named and shamed one rich-lister family as the worst hoarders of all.
The Walton family benefited enormously during the Covid-19 pandemic, making more than US$1 billion (NZ$1.4b) every week in 2020.
Their name might sound familiar; they’ve been topping the global rich list for years ever since their grandfather and great-uncle, Sam and Bud Walton, founded Walmart.
According to the report, families like the Waltons jealously guard their vast fortune; only four of the top 20 wealth dynasties are new to the 2020 rich list since 1983.
The coronavirus pandemic in March 2020 helped the top 10 families on the Forbes rich list experience a median growth in their net worth of 25 per cent.
Those families have been taking advantage of the tax system to share as little of that treasure trove as possible with the rest of the world.
It’s worth noting a Walmart worker’s starting wage is US$11 per hour.
In 2019, it was widely reported the Walton family had a net worth of US$191 billion. By the end of 2020, that number had risen to US$247b, according to Forbes.
That means they made US$56b last year – a little over US$1b a week.
That fortune is carved up between the Walton family:Jim, Rob and Alice Walton, the children of Sam Walton, and then Ann Walton Kroenke and Nancy Walton Laurie, daughters of Bud Walton.
Christy Walton, who is the widow of one of Sam’s sons, and 10 grandchildren also get their cut of the dynastic money pie.
Since 1983, the top five families on the Forbes rich list have increased their wealth to a staggering extent.
The Walton family led the pack with an increase of 4320 per cent, while the Mars candy family saw its wealth increase 3517 per cent in the past 37 years.
Since 1983, the Waltons increased their family fortune from US$5.5b (based off inflation-adjusted 2020 dollars) to US$247b.
Number two on the 2020 rich list, the Koch family, who run an oil company, went from US$3.8b in 1983 to US$100b in 2020.
The Mars clan (rich off their Mars Bars business) shot up from US$2.5b to US$94b as of last year.
The Cargill-MacMillans (who are behind a global food corporation) grew their wealth from US$1.8b to US$47b, while the Lauder family (who founded the cosmetics giant Estee Lauder) had US$1.5b in 1983 and now have US$40b.
How did these families get so wealthy?
It’s not so much a matter of getting wealthy, but keeping it that way.
According to the report, kids of billionaires are coached on how to keep their money through different tax methods.
“Inherited-wealth dynasties have benefited from a wealth-hiding system facilitated by a powerful wealth defence industry that enables the wealthy to move their money around the world and escape accountability,” the report’s authors wrote.
Rich families try to nip any attempt to raise taxes on the wealthy in the bud, using their power and influence to stop policy changes, according to the report.
They also don’t give away too much to charity, but still use their “philanthropic powers” to “exploit” charities as ways to house wealth.
The ultra-rich often also set up family offices to funnel their money and avoid being hit with extra taxes.
Researchers examined more than 248 foundations set up by the top 50 families, housing more than US$51b in assets.
A day after the report surfaced, the millionaire descendant of Walt Disney, Abigail Disney, wrote a scathing opinion piece in The Atlantic about rich people.
She has long been an opponent of wealth hoarding and is a member of the Patriotic Millionaires, which is an organisation calling for wealthy Americans to pay more in taxes.
“As time has passed, I have realised that the dynamics of wealth are similar to the dynamics of addiction. The more you have, the more you need,” she admitted in the piece.
“Having money — a lot of money — is very, very nice. It’s damn hard to resist the seductions of what money buys you.”
She went on to explain how many of the barely legal tax reductions described in the report had previously been suggested to her, and she’s even used some of them.
Another piece of advice she was given was to never spend the corpus – the original fortune she inherited.
Instead, she should live off the dividends of her wealth and work to grow the family fortune, so a larger inheritance could be passed down to her children.
However, she has pointedly ignored that advice. According to Business Insider, she has given away about US$70 million in her lifetime.
Abigail Disney, 61, has a net worth of US$120m.
She is the granddaughter of Roy Disney, who co-founded the Walt Disney Company. At the age of 21, she inherited a large portion of money.
The report comes after non-profit journalism organisation ProPublica revealed earlier this month that Jeff Bezos, founder of Amazon and worth an estimated US$195b, had avoided paying tax for three years.
Billionaires who broke the mould
What about the families no longer on that list?
There were 15 billionaires on the Forbes list in 1983. Of those, six are no longer billionaires.
These include members of the Getty family, energy barons George Mitchell, Marvin Davis, and Philip Anschutz, and early computer billionaires David Packard and Sy Wang.
Some gave away significant portions of their wealth to charities and sometimes even the communities that made their wealth possible.
Others deliberately took steps to prevent their descendants from inheriting their fortunes.
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