Extreme Wealth

Firstly, we must define extreme wealth in this context. Extreme wealth will be defined as individuals with total assets valued in the top .1%. This means that individuals with total net worth of hundreds of thousands of 2008 USD would not be included. Though it may seem like common sense, it is important to discern those who are relatively wealthy and those who are ultra wealthy, as this implies a highly varying degree of privilege and burden. This article is not meant to declare that a wealthy class should not exist, only that certain mathematical realities exist that need to be dealt with. Also, these mathematical realities are very simple, and should have been dealt with long ago. Monopoly As a warm up mental exercise, consider the board game Monopoly. Though Monopoly is a terrible economic simulation over all it does a great job of simulating the balance of wealth over a period of time. In this regard, the main difference between real life and Monopoly is that there are way more potential investments that can arise at any time (as well as new players), and in Monopoly there are a small fixed amount of investments and players. However, the model of balance in a laissez-faire scenario is still very realistic. And this is what the original designer intended to show. The lesson of this game is that the larger the financial advantage a party as over others, whether by luck or ethic (or lack thereof), the harder it is for anyone else to compete against them. The reason this is true is because the leading player always has more funds to buy up available investments. The Top Percentiles The most important wealthy classes to look at is the ultra wealthy class, those above the .1% and .01%, though the top 1% should be reviewed as well. All 3 of these perceived classes are quite different from each other. The top .01% possesses unfathomable, and almost infinite wealth (with proper financial management). The top .1% and 1% are very wealthy as well, but do not have such infinite means to execute any plans they may want. These classes will only financially fail in very extreme and rare situations. How the Ultra Wealthy Thrive Beyond Their Means Considering the Monopoly example it is not complicated to see how the wealthy generally become wealthier. The only time this does not happen is when extreme mistakes are made or by a huge historic event that changes the status quo, all these situations are quite rare. There are other tools that the wealthy can use to increase their wealth in exponential ways that other classes are not able to do. Some of these are the stock market and other securities. The ultra wealthy also have much more marketing power to execute their strategies, giving them further exponential advantage. Wealth also usually automatically grants social status, which assists them further. Middle Class and Upper Middle Class Generally in our society the middle class and middle upper class takes much of the hate and blame for the ills of the extremely wealthy. Though these people are generally privileged, they are also generally hard working people that greatly contribute to society, and generally earn their wealth. They are also the demographic that is burdened with a large share of the taxes. It is important to not focus high taxes on these economic classes of people as they are the backbone of civilization. All of these factors put a great strain on this essential part of civilization. Unfortunately, due to the ignorance of the middle class and upper middle class, they often blame the lower classes for their misfortunes, when their expense is actually bestowed to them by the ultra wealthy. Solutions The solutions are simple in theory, but are difficult to implement because of the power that the ultra wealthy wield. Certain members of this class, and their aspiring underlings, form organizations and connections to manipulate societies and economies to their benefit. Higher taxes, incrementally increasing by degree of wealth, is the solution to financially combat this plutocracy and the decadence of the ultra wealthy. However, these high taxes shouldn't be so high as to bring them down to other classes. The main purpose of these taxes should only be to reduce their socioeconomic power to reasonable levels and to prevent them from having a virtually infinite source of wealth. Taxes for the top .01% should be much higher than those for the top .1%. And taxes for the top 1% might not look incredibly different from the taxes of the upper middle classes. It is important to understand that the top .01% of the wealthy are generally the economic vampires of the world. The top 1% to top .1% are generally very productive people with the exception of those born into the wealth. The productivity of those who inherit huge amounts of wealth are greatly varied. Inheritance tax should exist for the ultra wealthy, and should reduce their wealth by a large amount. This amount should not make them of ordinary wealth (middle or upper middle class), but also should not allow them to live a life of pure decadence.