The world's wealthiest families exposed, teaching children to hoard wealth in order to create a billionaire 'ynasty.
Billionaires are teaching their children how to game the tax system in order to hoard family wealth and establish an enduring "dynasty" of wealthy individuals.
According to a new report, the world's wealthiest families are teaching their children to hoard their wealth in order to perpetuate a "dynasty" of billionaires.
The Silver Spoon Oligarchs: How America's 50 Wealthiest Families Accelerate Inequality report was released last week, and it singled out and shamed one wealthy family as the worst hoarder of all.
The Walton family reaped enormous benefits from the Covid-19 pandemic, earning slightly more than US$1 billion (A$1.3 billion) each week in 2020.
Their names may sound familiar; they have topped the global rich list for years, dating all the way back to their grandfather and great-uncle Sam and Bud Walton's founding of Walmart.
According to the report, wealthy families such as the Waltons jealously guard their enormous fortunes, with only four of the top 20 wealth dynasties joining the 2020 rich list since 1983.
The coronavirus pandemic in March 2020 resulted in a median increase in net worth of 25% for the top ten families on Forbes' rich list.
Those families have been abusing the tax system in order to share as little of that treasure trove with the rest of the world as possible.
It's worth noting that the starting wage for a Walmart employee is $11 per hour.
The Walton family was widely reported to have a net worth of US$191 billion (A$251.4 billion) in 2019.
According to Forbes, by the end of 2020, that figure would have risen to $247 billion.
That equates to $56 billion in revenue last year – slightly more than $1 billion per week.
This fortune is divided between the Walton family members – Jim, Rob, and Alice Walton, who are the children of Sam Walton; and Ann Walton Kroenke and Nancy Walton Laurie, who are the daughters of Bud Walton.
Christy Walton, the widow of one of Sam's sons, and ten grandchildren share in the dynastic wealth as well.
Since 1983, the top five families on Forbes' rich list have amassed staggering wealth.
The Walton family led the pack with a 4320 percent increase in wealth, while the Mars candy family saw a 3517 percent increase in wealth over the last 37 years.
Since 1983, the Waltons have grown their family fortune from US$5.5 billion to US$247 billion (inflation-adjusted 2020 dollars).
The Koch family, who own an oil company and are ranked second on the 2020 rich list, increased their fortune from $3.8 billion in 1983 to $100 billion in 2020.
The Mars family fortune (made famous by their Mars Bars business) soared from $2.5 billion to $94 billion last year.
The Cargill-MacMillans (founders of a global food corporation) increased their wealth from $1.8 billion to $47 billion, while the Lauder family (founders of cosmetics giant Estée Lauder) increased their wealth from $1.5 billion to $40 billion in 1983.
How did these families become so prosperous?
It's not so much a matter of attaining wealth as it is of retaining it.
According to the report, billionaires' children are taught how to keep their money through various tax strategies.
“Dynasties of inherited wealth have benefited from a wealth-hiding system facilitated by a powerful wealth defense industry that enables the wealthy to move their money around the world and avoid accountability,” the report's authors wrote.
According to the report, wealthy families attempt to stymie any attempt to raise taxes on the wealthy by leveraging their power and influence to prevent policy changes.
They also do not give excessively to charity, but they do use their "philanthropic powers" to "exploit" charities as means of storing wealth.
Additionally, these ultra-wealthy frequently establish family offices to channel their money and avoid paying additional taxes.
The researchers examined over 248 foundations established by the top 50 families, which collectively hold over $51 billion in assets.
A day after the report was published, Abigail Disney, a millionaire descendant of Walt Disney, wrote a scathing opinion piece about the rich in The Atlantic.
She has long been a critic of wealth hoarding and is a member of the Patriotic Millionaires, a group that advocates for wealthy Americans to pay a higher tax rate.
“As time passed, I realized that the dynamics of wealth are analogous to those of addiction. The more you possess, the more you require,” she admitted in the essay.
“Having money — a lot of money — is a very nice thing to have.
It's incredibly difficult to resist the seductions of what money can buy.”
She continued by stating that many of the report's barely-legal tax reductions had previously been suggested to her, and she had even used some of them.
Additionally, she was advised to never spend the corpus – the initial sum of money she inherited.
Rather than that, she should live off the dividends of her wealth and work to expand the family fortune in order to leave her children with a larger inheritance.
She has, however, defiantly disregarded that advice.
According to Business Insider, she has donated roughly $70 million over the course of her lifetime.
Ms Disney, 61, is worth $120 million (A$158 million) in the United States.
She is the granddaughter of Roy Disney, the Walt Disney Company's co-founder.
She inherited a sizable sum of money when she was 21 years old.
It comes after non-profit journalism organization ProPublica revealed earlier this month that Jeff Bezos, founder of Amazon and estimated net worth of $US195 billion, evaded taxes for three years.
What about the families that have been removed from that list?
In 1983, Forbes listed 15 billionaires.
Six of those, however, are no longer billionaires.
Among them are Getty family members, energy magnates George Mitchell, Marvin Davis, and Philip Anschutz, as well as early computer billionaires David Packard and Sy Wang.
Some gave away a sizable portion of their wealth to charities and occasionally even to the communities that enabled their wealth.
Others took deliberate steps to keep their descendants from inheriting their vast fortune.