Tax on America’s wealthiest households could erase half of country’s out-of-pocket health costs, report finds

The combined wealth of American billionaires increased by $2 trillion over the course of the Covid-19 pandemic, when the collective fortunes of the nation’s wealthiest households topped more than $5 trillion.

A report from the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and Patriotic Millionaires found that 3.6 million global households worth more than $5m have a combined wealth of more than $75 trillion.

An annual wealth tax applied to the world’s wealthiest people would raise $2.52 trillion a year – or more than $3.6 trillion a year with a more progressive tax structure – on household wealth over $5m, according to the report.

In the US, an annual wealth tax – with rates at 2 per cent over $5m, 3 per cent over $50m and 5 per cent over $1bn – would raise more than $928bn, the report found. A more progressive annual wealth tax at 10 per cent on wealth over $1bn would raise more than $1.3 trillion.

Such revenue “could raise the government’s health budget by a third or it could eliminate half of US households’ out-of-pocket health costs,” according to the report.

A progressive tax rate on the world’s wealthiest people “would be enough to lift 2.3 billion people out of poverty, make enough vaccines for the whole world, and deliver universal health care and social protection for all the citizens of low and lower middle-income countries,” impacting 3.6 billion people, according to the report.

“Wealth inequality has been supercharged by the pandemic, creating an unprecedented global concentration of wealth and power,” report co-author Chuck Collins with the Institute for Policy Studies and co-author of the report.

“Taxing the world’s wealthiest one-tenth of 1 per cent would raise substantial revenue for public investments in health and social protection and for a greater global response to the most urgent crises of our time,” he said. “During 2021, we witnessed the epidemic of Covid-19 and wealth-hiding, and it’s time to reverse course.”

Nearly half of US adults say it is difficult to afford out-of-pocket health costs not covered by their insurance providers, according to the Kaiser Family Foundation.

Half of all US adults report delaying, skipping or putting off entirely some form of treatment – including regular checkups, dental and vision care, or going to the hospital – because of the cost, and nearly 30 per cent have not taken their medicine within the last year because of the price of prescription drugs, the report found.

In the US, there are nearly 1.5 million people with a net worth of $5m or more, with a total combined wealth of $28 trillion.

US billionaires own half a billion more in wealth than the bottom 60 per cent of the country, the report found.

Topping the list is Tesla and SpaceX CEO Elon Musk, whose wealth climbed from $24.6bn in 2020 to $294.2bn in November 2021.

Amazon founder Jeff Bezos, who moved to an “executive chairman” role at the retail giant last year, saw his pre-pandemic wealth surge from $113bn to $192 by mid-October.

Microsoft’s Bill Gates grew his wealth by $34.4bn, from $98bn to $132.4bn.

An annual billionaires list compiled by Forbes in 2021 found that the world’s wealthiest people have amassed more than $13 trillion combined, growing by 30 per cent from the previous year.

A vast majority of the hundreds of people on the Forbes list are wealthier today than they were two years ago, at the onset of the global health emergency and an economic fallout that left millions of people jobless in the months that followed and magnified issues of wealth inequality.

In a report published on Monday, Oxfam found that the 10 richest men in the world doubled their fortunes during the pandemic – with their wealth increasing from $700bn to $1.5 trillion between March 2020 and November 2021.

Meanwhile, the incomes of approximately 99 per cent of people around the globe fell during that same time, and more than 160 million people have been forced into poverty, according to Oxfam.

Legislative attempts to raise taxes on the wealthiest American households have languished as Congress mulls Joe Biden’s social spending packages.

One proposal from US Senator Ron Wyden would impact taxpayers with more than $1bn in assets or more than $100m in income for three consecutive years to raise $557m over 10 years.

A majority of Americans believe the nation’s billionaires should pay a wealth tax, according to polling from The Hill-Harris X.