President Joe Biden claimed that U.S. billionaires had their net worth increase by some $1 trillion during the pandemic — but the truth is a bit more complicated.
During his first address to a joint session of Congress, Biden trashed the 2017 tax cuts and touted a plan to raise the corporate tax rate in order to pay for his $2.3 trillion infrastructure spending package. He said that while 20 million working- and middle-class people lost jobs during the pandemic, the richest 650 people in the United States saw their wealth explode.
The president was referencing a report by Americans for Tax Fairness and the Institute for Policy Studies, two left-leaning groups. The claim is that as of February, the country’s 664 billionaires now have a collective net worth of $4.3 trillion, up from just under $3 trillion on March 18 of last year.
While March 18 was early on in the pandemic in terms of time frame (states were not yet locking down), the Dow Jones Industrial Average was at its lowest point around late March, dropping to nearly 19,000 points by March 20.
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Net value is largely derived from the value of stocks, meaning that if measured from the lowest trough, the stock market’s subsequent multi-month increase would obviously cause a dramatic increase in the net worth of the country’s billionaires.
By late November, the Dow had grown by a whopping 10,000 points. If the study had pegged the start of its measurement earlier, and not just at the stock market’s lowest point, the $1.3 trillion figure would undoubtedly be much lower.
Biden used his first joint address to unveil his American Families Plan, which is a $1.8 trillion plan aimed at helping families and includes $1 trillion in social welfare investments over a decade and some $800 billion in tax benefits. He intends to pay for it by hiking the top individual income tax rate to the pre-2017 level of 39.6% and taxing capital gains for households making more than $1 million as ordinary income.
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Biden also touched on his $1.9 trillion COVID-19 relief package and his infrastructure package, which he wants to be paid for by raising the corporate interest rate and changing other aspects of the corporate tax code.
