F. Scott Fitzgerald famously said that the rich are not like you and me.
Tyler Durden writes for ZeroHedge, Feb. 15, 2013, that 1% of Americans control over 40% of the United States’ wealth. But those making $10 million or more a year pay an average income tax rate of only 19%, which is a much smaller percentage than my husband and I pay!
Despite all of Obama’s and the Dems’ tax-increase talk, those increases will not affect the super-rich. The truth is many members of Congress are among the super-rich — Nancy Pelosi, John Kerry, Diane Feinstein come to mind — and the super-rich are protected by both major political parties.
I’ve often wondered how the super-rich shield their wealth from taxes. Here’s how:
Writing in The Atlantic in 2011, Chrystia Freeland reiterated what the late and brilliant Christopher Lasch had first observed more than 17 years ago in his book, The Revolt of the Elites and the Betrayal of Democracy: There is a new global super-rich elite that is transnational and anational. Having more in common and identifying with each other, their concerns are global instead of national. Put in a different way, this new global super-rich are internationalists, not nationalists. Among them are the American super-rich.
Freeland writes:
[... the rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.
The rise of the new plutocracy is inextricably connected to two phenomena: the revolution in information technology and the liberalization of global trade. [...]
As with the aristocracies of bygone days, such vast wealth has created a gulf between the plutocrats and other people, one reinforced by their withdrawal into gated estates, exclusive academies, and private planes. We are mesmerized by such extravagances as Microsoft co-founder Paul Allen’s 414-foot yacht, the Octopus, which is home to two helicopters, a submarine, and a swimming pool.
[...] another defining characteristic of today’s plutocrats: they are forming a global community, and their ties to one another are increasingly closer than their ties to hoi polloi back home. As Glenn Hutchins, co-founder of the private-equity firm Silver Lake, puts it, “A person in Africa who runs a big African bank and went to Harvard might have more in common with me than he does with his neighbors, and I could well share more overlapping concerns and experiences with him than with my neighbors.” The circles we move in, Hutchins explains, are defined by “interests” and “activities” rather than “geography”: “Beijing has a lot in common with New York, London, or Mumbai. You see the same people, you eat in the same restaurants, you stay in the same hotels. But most important, we are engaged as global citizens in crosscutting commercial, political, and social matters of common concern. We are much less place-based than we used to be.”
[This...] helps explain why many of America’s other business elites appear so removed from the continuing travails of the U.S. workforce and economy: the global “nation” in which they increasingly live and work is doing fine—indeed, it’s thriving.
Read the rest of the article, here.
~Eowyn
