CREDIT: AP Photo/Richard Drew
Billionaires will finally have someone to envy by 2040. The world will mint its first trillionaire within 25 years as the wealthiest people’s investment gains push global inequality wider and wider, according to economic forecasters.
The frontrunner for world’s first trillionaire is Microsoft founder Bill Gates, who is currently worth $120 billion. “If the US national wealth carries on growing at its current rate and the richest few continue to increase their share of it in an increasingly polarised economy, Mr Gates will claim the title of world’s first trillionaire in his old age,” according to the Sydney Morning Herald.
If the prediction comes true, it will mean no real change in practical terms for everyone else. The wealth gap in the U.S. is already wider than it has been since the Gilded Age of the early 20th century. Inequality in annual income has earned a lot of attention in recent years, but the separate disparity in total wealth is similarly extreme and poses similar threats to the future stability of markets and society as a whole. At present, the richest 0.1 percent of Americans hold well over 20 percent of all American wealth.
At the same time that wealth has become so concentrated in the hands of the elite few, everyone else’s ability to rise through the economic ranks has been undermined. Economic mobility — the central premise of the American Dream that hard work will be rewarded with ever greater rewards for one’s family and descendants — has stagnated for 20 years. The odds that a child born into poverty will rise into the wealthiest fifth of the income distribution did not improve from the early 1970s to the early 1990s. Factors that determine a person’s chances of rising up the economic ladder include race and education level. Conversely, those born rich are still almost certain to die rich too.
This is in part because of the many ways in which the wealthiest Americans are able to entrench their success. They evade estate taxes through complex but legal accounting schemes that shield their children’s inheritances from the tax man. They find Congress far more responsive to their concerns than to those of poor and middle-income families. And they are better positioned to capture the gains from stock market booms and withstand the losses from downturns.
Meanwhile, the middle class — the key economic cohort for maintaining mobility both within a person’s lifetime and over generations — is disappearing.