George Rebane

[This post appeared (here) in the op-ed pages of the 4jun25 Union.]

On average, all of us in America are millionaires.  In 2022 the average household net worth – assets minus debts – hit $1.06 million.  But that hopeful number is skewed by the ultra-wealthy.  The more accurate net worth of $192,900 is provided by the median where half of households have more than that, and the other half less. (more here)

Unfortunately, many households are also living close to their paychecks because most of their net worth is unspendable – locked up in assets like their homes, 401Ks, cars, etc.  The further problem is that while wage growth is real – up 4.8% last year with inflation at 2.7% during the same period – the prices of things from real estate, appliances, vehicles, and other stuff also increased enough to pretty much eat up real wage growth.

The problem with all this is still government at all levels with its taxes, fees, laws, regulations, …, not counting its ongoing waste, fraud, and abuse, that continue to slow our economy’s growth and impede our makers from producing things at costs that people can more easily afford.  And the ONLY way out of this financial morass is to promote vigorous economic growth that raises all boats – taxing our way to wealth has never worked and is not a reasonable option.

The road to vigorous economic growth is not a secret.  Non-socialist economists have taught and demonstrated for years that nations’ sustainable growth is based on maximizing free market capitalism and minimizing governments’ role in their economies.  Most students of economics know that any program is unsustainable which continues to consume an increasing fraction of the GDP of a nation, state, or local jurisdiction.  Our governments at all levels are riddled with unsustainable spending which is ‘solved’ by ever greater borrowing.

And wealth redistribution is not the answer.  First, because the rich don’t have enough of it, and second, because wealth is mobile – it escapes to where it is not confiscated.  A current example of this in America is the mass movement of the makers from high to low tax states; these not only by the rich, but also from the middle class (enough to cause some avaricious states to lose congressional representation) .  A more serious problem arises when a nation’s makers emigrate to distant lands, leaving behind countries with growing fractions of takers.  Recent examples of this can be drawn from the mostly socialist Europe.

We are now witnessing ‘London’s Great Wealth Exodus’.  After Moscow, the biggest loss of millionaires are those leaving the UK, which amount to 30,000+ over the last ten years, with 11,000 of these emigrating in the last year.  For generations London has been one of the best places in the world for the rich – not any more.  Due to its restrictive financial landscape it has not recovered from the 2008 recession and continues to maintain a risky environment for financial and commercial growth through ever increasing taxes piled on by both Conservative and Labour governments.  New financial centers in Asia and the Middle East are now the new favorite places for the world’s rich. (more here)

All is not yet lost in the US.  Here a new resurgence of hope has enabled all levels of our economy to grow, and that includes the number of millionaires which increased by 12%, albeit at one of the world's lowest rates.  In the last years we’ve shown ourselves to be very inviting for millions of the world’s financially impoverished. But we also continue to be the land of opportunity for the makers, both homegrown and imported who are investing new billions in our country on the promise of economic security and profits.  These are people who will grow the pie for all of us, and hopefully put to shame those who, according to their lights, only seek to forcibly redistribute the current pie more ‘equitably’.