Entries in Rich (11)


Economist Who Advises Romney: ‘Rich Are Taxed Enough’

David Paul Morris/Bloomberg via Getty Images(NEW YORK) -- “The rich are taxed enough,” argued Columbia Business School Dean Glenn Hubbard.

The man who The New York Times called Mitt Romney’s “go-to economist” and who is considered a leading candidate to be treasury secretary in a Republican administration made his case at a debate in New York Wednesday.

“Raising tax rates on the rich is both counter-productive and unnecessary to fund the government we want,” said Hubbard.

While steering clear of specifics, Hubbard told the audience at the Intelligence Squared Debate that “higher tax rates won’t necessarily produce enhancements in revenue.”

“We can and should achieve fairness and growth without taxing the rich more than they are today,” he said.

Hubbard’s somewhat dry tone was balanced by the passion of one of his debate opponents, former Labor Secretary Robert Reich.  Speaking against the notion “the rich are taxed enough,” Reich called the idea “absurd.”

“The rich have done extraordinarily well but the rest haven’t,” said Reich to audience applause.  “The percentage of total U.S. income of the top 1 percent has doubled in the past 30 years.  Given where we are now, we shouldn’t even have this debate.”

Hubbard opposed raising tax rates for the rich but added, “We need a progressive tax system.”

“The wealthy should pay a disproportionate share of taxes,” he said.

Hubbard and his debate team colleague, Arthur Laffer, spoke out for tax reform that would lower rates but also broaden the tax base.

“We need to think about growth and fairness.  Tax rates should not rise,” said Hubbard.

The United States already has one of the most progressive tax systems in the world, he argued.  Comparing the U.S. economy to a tall building, Hubbard said the “lower floors are flooded” while the people in the penthouse are doing well but “the elevator is broken.”

If the tax base were broadened with lower rates and tax reform, opportunity would be expanded and “we would get more revenues” to pay for the government, he said.

Copyright 2012 ABC News Radio


The Wealthiest People in Each State Revealed

Scott Olson/Getty Images(NEW YORK) -- Wealth managers and other businesses may want to take heed.  Wealth-X, an information research firm of ultra high-net worth individuals worth over $30 million, has compiled a list of the richest person in each state.

The ultra high-net worth population is spread throughout the country, often living close to the companies they founded.

Bill Gates, the country's wealthiest individual and the world's most generous, still resides in the state of Washington, home of Microsoft.

The majority in Wealth-X's list are men and in business.  The oldest person is Anne Cox Chambers, 92, the daughter of James Cox who founded Cox Enterprises.  She has a net worth of $11.2 billion.

David Friedman, president of Wealth-X, said the list of the wealthiest individuals in the U.S. shifts frequently, as economic and business conditions can change net worth drastically.

"Instead of a top down approach, we do a bottom-up report," Friedman said, researching the "granularity" of each person in the list, which can "reinvent the way the ultra-wealthy donate and invest."


Copyright 2012 ABC News Radio


Super-Rich Hide $21 Trillion in Secret Tax Havens, Says Tax Justice Network

Adam Gault/Thinkstock(NEW YORK) -- The super-rich are hiding at least $21 trillion in accounts outside their home countries, according to a report by an activist group called the Tax Justice Network.

The wealth hidden in these tax shelters is the equivalent of the United States and Japanese economies combined, according to the report titled “The Price of Offshore Revisited.”

“The hidden offshore sector is large enough to make a significant difference to all or conventional measures of inequality, ” wrote the lead author, James S. Henry, a former McKinsey & Co. chief economist.

“Since most of the missing financial wealth belongs to a tiny elite, the impact is staggering. For most countries, global financial inequality is not only much greater than we suspected, but it has been growing much faster,” he said.

Daniel N. Shaviro, a professor of taxation at New York University, told ABC News a lot of what’s happening is tax fraud.  He said the report highlights that there are wealthy people who don’t want to pay taxes -- and their home countries don’t have enforcement mechanisms in place, so they can get away with it.

In a list of the top 20 countries experiencing “global flight wealth,” China ranks as number one with $1.19 trillion. It is followed by Russia, Korea, Brazil, and Kuwait.

“Often these countries in general have not been rich for as long as the U.S. or England so they may not have both the rule of law and their enforcements may not be as well developed,” said Shaviro.

Using data from the World Bank, the IMF, the United Nations, central banks, the Bank for International Settlements and other sources,  the report said 100,000 people worldwide were responsible for $9.8 trillion in wealth held offshore.

And who managed the money?

According to the study, UBS, Credit Suisse and Goldman Sachs are the top three private banks handling offshore accounts for the super-rich.

“It turns out that this offshore sector -- which specializes in tax dodging -- is basically designed and operated, not by shady no-name banks located in sultry islands, but by the world’s largest private banks, law firms, accounting firms, headquartered in First World capitals like London, New York and Geneva,” wrote Henry.

Copyright 2012 ABC News Radio


Nation's '1 Percent' Turn to Pawn Shops for Quick Cash

iStockphoto/Thinkstock(BEVERLY HILLS, Calif.) -- A pawn shop next to the likes of Hermes, Tiffany’s and Chanel on Rodeo Drive would have, just a few years ago, been an unheard of sight.

But the classic pawn shop, where you sell or get a loan for your jewelry to pay back later, is making waves in the most unlikely of places -- Beverly Hills.

The recession has proven that even the richest of the rich fall on hard economic times and, now, when they need fast cash, more and more of the nation’s “1 percent” are electing to trade in their jewels.

Yossi Dina is the owner of South Beverly Wilshire Jewelry and Loan, an exclusive pawn shop that caters to the rich.  Clients stream into his Beverly Hills store offering valuable merchandise in exchange for cash, fast.

One such client is Vanessa Kalcheim, a Beverly Hills hairdresser going through a divorce.  She brought in a Harry Winston diamond necklace with a $600,000 retail price tag for Dina to appraise.

“Nobody will give me a loan,” Kalcheim told ABC News.  “The jewelry doesn’t work for a bank so my best option was to go to a pawn shop and try to sell it.”

Kalcheim said she hopes the necklace will bring her quick cash to hold her over until she receives her settlement from her divorce.

“I need to pay for them [her children],” she said.  “The clothes, the food, if I want to go to Disneyland.  Children cost money.”

Dina estimates Kalcheim’s necklace will sell for around $300,000 to $400,000.  He offers to give her $150,000 to $200,00 for a loan on the necklace and then pay her the difference if the necklace sells.  It’s a deal Kalcheim accepts immediately.

“First I am going to look for a new place to live and pay the down payment with this money,” she says.  “And start over.”

The transaction shows that a new breed of pawn shops are no longer seedy places with barred windows.  They’re now hot spots for buying and selling used goods, and even the focus of reality TV show fame.  In short, business at pawn shops is booming because the economy isn’t.

“We are in a bad time and it’s getting worse, but rich people buy,” Dina said.  “People come here at the worst time, and they leave feeling great.”

“The difference between me and the bank is with the bank you have to wait 60 to 90 days,” he said.  “With me, it’s immediate.”

Copyright 2012 ABC News Radio


Poll: Americans Need $150K Income to Feel Rich

Comstock/Thinkstock(WASHINGTON) -- How much do you need to consider yourself “rich?” Americans say they would need an annual income of $150,000, according to a Gallup poll this week.

Gallup asked, “Just thinking about your own situation, how much money per year would you need to make in order to consider yourself rich?”

The median income figure of the telephone responses was $150,000. However, 30 percent said less than $100,000 would be enough. Only four percent said earning $1 million or more would make them feel rich.

Americans’ perceptions of the income needed to be rich were a bit higher than in 2003, when Gallup last asked the question. Eight years ago, $120,000 was the median Americans said they would need.

In a separate question asking how much in net worth, or savings in cash, stocks, real estate and other investments, they would need to consider themselves rich, the median figure was $1 million, the same as in Gallup’s 2003 poll on the same issue.

Gallup published the survey amid discussion over tax cuts and Occupy Wall Street’s criticism of the richest one percent of Americans.  Gallup said the results suggest Americans would need “quite a bit less” than what the wealthiest “1 percent” of Americans earn to consider themselves rich.

The survey showed a noticeable difference in answers by respondents’ gender, age, education and of course, income.

The median annual household income in the country is around $50,000 per year, according to the Census Bureau.

Gallup surveyed 1,012 adults who were 18 years or older from Nov. 28 to Dec. 1.

Incomes Needed for Survey Respondents to Feel Rich

  • Less than $60,000:  18 percent
  • $60,000 to $99,999:  12 percent
  • $100,000 to $150,000:  23 percent
  • $150,001 to $299,999:  18 percent
  • $300,000 to $999,999:  14 percent
  • $1 million:  11 percent
  • More than $1 million: 4 percent
  • Median: $150,000

Copyright 2011 ABC News Radio


Wells Fargo Announces New Business for Super Rich

Scott Eells/Bloomberg via Getty Images(SAN FRANCISCO) -- Banks across the country are trying to attract wealthy clients as economic and regulatory factors weaken traditional banking businesses and the wealth gap increases.

Wells Fargo is one of many companies beefing up its wealth management business, announcing the launch of a new company serving individuals and families with $50 million or more in assets.

Sandy Deem, spokeswoman for Wells Fargo, said the new business is a "natural next step" in combining Wells Fargo with Wachovia, which it acquired in 2008.

Headquartered in San Francisco, Wells Fargo announced last week that the combined company will have a staff of about 300 and $27.5 billion in client assets.  Named Abbot Downing, the boutique will be a combination of its private asset management firm, Lowry Hill, and Wells Fargo Family Wealth.

Deem said Wells Fargo announced within the company last January the intent to combine the two businesses, and the latest announcement is not related to its cancellation of its debit card pilot program.

Large banks, such as Bank of America and Chase, announced in recent weeks they will not charge customers for using their debit card as a result of the Durbin amendment of the Dodd-Frank Act.  The amendment caps fees banks charge merchants when customers make debit card purchases to about 21 cents.  Before the amendment was implemented on Oct. 1, the average fee banks charged merchants was 44 cents per transaction.

On Oct. 28, Wells Fargo announced it is canceling its test program of $3 monthly debit card fees in five states, which began on Oct. 14.

Abbot Downing will serve wealthy clients nationwide through offices in San Francisco, Los Angeles, Scottsdale, Ariz., Denver, Houston, Minneapolis, Chicago, Philadelphia, Charlotte, N.C., Winston-Salem, N.C., Raleigh, N.C., Naples, Fla., Jacksonville, Fla., Washington, D.C., and Palm Beach, Fla..

Copyright 2011 ABC News Radio


Poll: Six in 10 Support Policies Addressing Income Inequality

Adam Gault/Thinkstock(NEW YORK) -- Six in 10 Americans say the federal government should pursue policies to reduce the gap between the wealthy and less-well-off Americans, although fewer express support for the Occupy Wall Street movement that’s been protesting U.S. income inequality.

Sixty-one percent of respondents in the latest ABC News/Washington Post poll think the wealth gap is larger than it’s been historically.  And despite longstanding public concerns about activist government, six in 10 also say the federal government should seek to reduce that differential.

The public’s concern is buttressed by a recent Congressional Budget Office estimate that the wealthiest 1 percent of Americans have nearly tripled their incomes since 1979, while the bottom 80 percent of earners have seen their share of the nation’s total income slightly decline.

The poll, produced for ABC by Langer Research Associates, finds that 37 percent perceive the wealth gap as “much larger” than it’s been; just 5 percent think it’s smaller.  And 43 percent feel “strongly” that the government should pursue policies to address it, versus 24 percent who are strongly opposed.

Overall support for such policies is linked to perceptions of a widening wealth gap.  Among those who think the gap is much larger than it’s been historically, 84 percent say the government should pursue policies to address it.  That declines to 54 percent among people who think the gap is just somewhat larger than in the past, and 41 percent of those who think it’s about the same.

But while 60 percent support polices to address wealth distribution, substantially fewer -- 44 percent -- identify themselves as supporters of the Occupy Wall Street movement, and just 18 percent strongly so.  About as many, 41 percent, say they oppose the movement.

Copyright 2011 ABC News Radio


Top 1 Percent's Income Soared Since '79

John Foxx/Stockbyte(WASHINGTON) -- The income of the richest 1 percent in the U.S. soared 275 percent from 1979 to 2007, but the bottom 20 percent grew by just 18 percent, new government data shows.

The Congressional Budget Office (CBO) released a study this week that compared real after-tax household income between 1979 and 2007, which were both after recessions and had similar overall economic activity.

While the income of the richest 1 percent nearly tripled, increases were smaller down the economic ladder. After the 1 percent, income for the next highest 20 percent grew by 65 percent, much faster than it did for the remaining 80 percent of the population but still lagging well behind the top percentile.

The changes illustrate how the better off have captured the bulk of income gains over the past three decades. The top quintile has seen its share of income rise while the other four quintiles have suffered declines in their shares, according to John Bowler, director of country risk service with the Economist Intelligence Unit.

The report states that without the growth of the top percentile, income inequality still would have increased, "but not by nearly as much." The study was prepared at the request of Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa.

The CBO said the reasons for the rapid growth at the top are "not well understood," though some possibilities include technical innovations that have changed the labor market for superstars, "such as actors, athletes, and musicians," changes in executive compensation, and increasing scale of financial-sector activities.  

Copyright 2011 ABC News Radio


'Tax the Rich' Aspect of Jobs Bill Punted to Super Committee

Kevin Lamarque-Pool/Getty Images(WASHINGTON) -- President Obama wants to pay for his $447 billion American Jobs Act with a mix of so-called revenue enhancers, mostly by taxing the wealthy.

The president said Monday he hopes the special Congressional super committee already charged with making $1.5 trillion in cuts to reduce the deficit by Nov. 23 will "overachieve" and consider his proposals to pay for the plan, which is intended to stimulate job creation.  Republican reception was cool, with the party's top leaders saying tax increases are unacceptable and job-killing.

Steven Leslie, lead analyst for financial services at the Economist Intelligence Unit, part of the Economist Group, said the measures announced Monday had already been debated before August's deficit reduction plan.

"These are almost exactly like the ones Obama proposed a month ago: shift the tax burden to the wealthy people and close some of these loopholes on corporate airplanes," Leslie said.

The plan includes new limits on deductions for income over $250,000 which the White House says could raise $400 billion over 10 years, oil and gas tax measures which would raise $40 billion, and limiting tax deductions for corporate jets which could raise $3 billion.

Office of Management and Budget Chair Jack Lew on Monday also described changes to the taxation of carried interest, raising $18 billion from the income of hedge fund and private equity managers. 

Billionaire Warren Buffett previously criticized the current policy which he said allows his secretary to pay more in taxes than he does.

The committee, which met for the first time on Sept. 8, holds its first hearing Tuesday.  At the hearing, Congressional Budget office director Doug Elmendorf will testify on "The History and Drivers of Our Nation's Debt and Its Threats."

Cato Institute economist Dan Mitchell said the measures were "repackaged" from previous White House proposals, like Dr. Seuss' Green Eggs and Ham.  He said he doubts the measures will effectively stimulate the economy.

"As they say in the children's book, 'I do not like them in a house.  I do not like them with a mouse.  I do not like them here or there.  I do not like them anywhere,'" Mitchell said.

Mitchell said the most newsworthy announcement on Monday was that the president was targeting itemized deductions, as opposed to increasing the marginal tax rate.  He said most economists across an ideological spectrum agree doing the latter would create the most damage per dollar raised because it affects the incentive to earn additional income.

Copyright 2011 ABC News Radio


More Wealthy People in Asia Than Europe, Says New Report

Comstock/Thinkstock(WASHINGTON) -- Asia can now claim more millionaires than all of Europe combined, and the rapidly climbing number wealthy people in places like China is closing the gap with North America's number of millionaires and billionaires, according to the latest annual Merrill Lynch-Capgemini World Wealth Report.

Altogether, the number of millionaires and billionaires in the world was up 8.3 percent from 2009 to a total wealth of $42.7 trillion in the hands of the richest people in the world in 2010.

Although the average yearly income in many Asian economies is still very low -- in China it is still only $3,600 -- the number of high net worth individuals (HNWI) in the Asia-Pacific region expanded 9.7 percent to 3.3 million.

In Europe, there are 3.1 million HWNI's. North America still leads the pack of millionaires and billionaires with 3.4 million, but our growth rate is significantly lower than Asia's.

Along with those rising numbers of wealthy people comes a rising number of millionaires spending those millions.

"China's rich people have become what they are now only in the past 10 to 15 years," Chinese demolition tycoon and philanthropist Chen Guangiao, told ABC News last year.

"The thing that's unusual is that 30 years ago, there really weren't people of great wealth, so what you have is first-generation fortunes," billionaire Bill Gates said at a news conference in Shanghai last September.

One of the ultimate symbols of success is a private executive jet. Not surprisingly, sales are taking off in Asia, especially in China.

A $1.4 billion yacht port is currently under production in the Chinese city of Tianjin. The port, to become the largest in China at its completion, will hold 750 berths to accommodate luxury yachts up to 295 feet long.

However, the United States remains the world's largest yacht market with 17 million privately owned recreational boats, but that may change in the current trends in the movement of the world's wealth continue.

Copyright 2011 ABC News Radio

ABC News Radio