“U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties” – Gabriel Zucman, economics professor at the University of California, Berkeley.
Now that Americans have filed their taxes, many have noticed that they received a smaller amount than expected, given the tax plan Congress recently approved. In fact, people and households earning over $1 million per year, received a cumulative total of $17.4 billion and can expect to save another $30 billion by 2024, because of the “pass-through” tax deduction. Wow, that’s a lot of money for already wealthy people!
The wealthy own the lion’s share of assets like stocks and bonds, which the Federal Reserve has inflated since the Great Recession. For this reason, the rich were the biggest beneficiaries from the ‘burst’ of the housing bubble, and the poor and middle class are still struggling to regain the ground they lost in 2008.
Since the tax cuts have gone into effect, almost $700 billion has been returned to investors, while wages for the American worker continue to drop. It’s easy to see that company shareholders won from passing the new tax plan. Workers and consumers are left out of the record breaking corporate race to buyback stock. Buybacks temporarily boost executive pay, since they tend to be paid in company stock. In addition to buybacks, dividends have skyrocketed, which puts even more money into the pockets of already wealthy individuals, typically at the expense of average company workers.
One major difference between the 1920s America and 2020 America, is that we now have Regulation Crowdfunding which opens the door for everyday people to invest and receive equity.