Yesterday, I talked about the reality of rising Federal budget deficits. Politicians are going to be looking for additional sources of revenue to keep the government running. They will notice that more than a quarter (27%) of all the wealth in America is held by Americans over age seventy.
Over the next quarter century, there will be at least $84 trillion transferred. About $11 trillion will go to philanthropic endeavors. The remaining more than $70 trillion will be transferred to heirs.
Most of this wealth has been earned, and the Americans who earned it should be able to decide what happens to it. But a government starved for revenue will also see this as another source of government income. All politicians would need to do is raise estate taxes and raise capital gains taxes so more money will flow into the federal government.
The trick will be to convince Americans that these policy changes will only affect the rich. It is a variation of the “tax the rich” slogan we talked about yesterday. But here is the catch. Most of that $84 trillion is not in the hands of the super-rich.
In her recent book, Carol Roth has a chapter on “The Upcoming Wealth Heist.” She runs the numbers on the top eleven wealthiest individuals in America (like Elon Musk, Jeff Bezos, and Bill Gates), whose collective estimated wealth is about $1.2 trillion.
That is a significant amount of wealth. But it’s merely a fraction of the trillions that will be transferred by upper-class and middle-class Americans. We are talking about many Americans who don’t even think of themselves as wealthy who will be transferring stocks, bonds, farms, businesses, and other assets to their children and grandchildren.