The rich are getting richer

The societies are becoming more marginalized. In democracies the proportionately growing elderly will increasingly determine politics. The trend is therefore conservative. It should remain as it was. And when the super rich, who can influence politics, are getting older, the younger people have a bad chance of setting the course for their benefit and for the future.

According to Bloomberg [1], 6 of the richest 25 Americans are over 80 years old, including Carl Icahn, Charles Koch, George Soros and Warren Buffett. Although the US over-80s represent only 3.7 per cent of the total population, according to the Internal Revenue Service (IRS), they control more than all US citizens under the age of 50. Really rich are the ancients. This has always been the case, and now young people can become rich. One example is Mark Zuckerberg, the fifth-largest man in the world, who is only 33 years old.

The wealth of the super rich can only be appreciated by the tax authority. The richer one is, the better he can afford to be a consultant to cover up his assets and thus reduce his tax burden. The estimation is based on inheritance taxes, which had to be paid by the descendants of the deceased rich. Also there can be a lot of screwing. Real wealth can therefore be much greater than that which the government has grasped, especially if donations are already made before death, in order to circumvent taxation.

The latest IRS data comes from 2013. Thereafter, 584,000 US citizens have assets of 6.9 trillion US dollars. These super rich are just 0.2 percent of the population. People over the age of 80 alone have 1.2 trillion US dollars, all people under the age of 50, including Zuckerberg, have only 1 trillion, but represent 43 percent of the population. And the eighty-year-old rich also have only half the debt that people under 60 have.

This is a remarkable gap, as the demographic changes, ie the political overweight of the elderly, are once again drastically strengthened. The super rich have not only economic influence, but also political. They are well networked with the powerful in society. They do not pursue the same interests as can be seen, for example, in George Soros, the Koch brothers or Warren Buffet, but with their financial and economic power, they are negligible for no decision makers.

The IRS data do not show that the proportion of the super rich in the total range has grown. This suggests that, despite increasing wealth, there are many loophole for inheritance tax. However, many studies show that the share of the richest 1 per cent has risen in the last decades – not only in the USA (the richest 1 per cent in the US, the remaining 99 per cent is still falling in Germany one third of total assets [3]).

In a study published last year [4] on equilibrium in the US, Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley stated that the share of the wealth of the wealthiest 0.1 percent of the total assets from 7 percent in 1978 to 22 percent in 2012 has risen, similar to 1929. But according to this investigation, the richest are younger than 1960 and have a higher share of income. The assets of the “lower” 90 percent have risen to the middle of the 1980s and have been steadily declining since then. The increase in inequality over the past decades, according to the two researchers, is due to the rise in top income in combination with an increase in the inequality of reserves. If you earn less, you will also be able to save less money and save money for old age.

Saez and Zucman suggest that an additional trend will result in the inheritance tax remaining the same. With the growing gap between rich and poor, the distance between the life expectancy between the rich and the poor grew. Because the rich live significantly longer than the poor, the increase in the wealth of the rich could possibly have not yet been covered by the inheritance tax. In addition, the Superreichen become older.

In the 1980s the stereotypes between the poor and the rich were not so far apart. People from the richest between 65 and 79 years also had a 12 per cent lower risk of dying in one of the years than the average of Americans. Now the risk is already 40 percent lower. In addition, the rich live longer, but the average life expectancy stagnates. The richest 0.1 percent lives longer than the richest 1 percent, which in turn lives longer than the richest tenth, etc.

The bottom line, drawn in the Bloomberg article

by alfons

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