What is (extreme) wealth inequality and why is it bad?
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Wealth inequality is when somebody doesn’t have exactly the same amount of money/assets as everyone else.
Extreme wealth inequality begins to occur when a small number of people in a society have immensely more money/assets than the other members of their society.
While that individual vs individual level of inequality can be problematic, it becomes particularly unbalancing to a society when it happens at an individual vs collective level. In that more egregious form of extreme wealth inequality, each of that small number of people has immensely more money/assets than the combined wealth of large numbers of their society (if not all the other members of their society).
That’s the situation we’re finding ourselves in, yet again. A small number of people have immensely more individual wealth than the combined wealth of most or all of us. It’s happening on a country-basis as well as on a global-basis. Any one of these ultrarich people has enough money to buy influence, power, and/or control. If none of them did, it might not be as bad. Unfortunately, however, more than one of them did and do use their extreme wealth in ways that are often contrary to what we and the rest of our society needs or wants.
If the ultrarich didn’t have so very much more wealth than the rest of us regular folks combined, then they wouldn’t have such unchecked power.
How did they get so rich?
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In short, the ultrarich are able to become and stay extremely wealthy because all the systems are rigged heavily in their favor.
As Oxfam writes in their report Takers, Not Makers, it’s a two-tier world in which the ultrarich still benefit greatly from colonialism. Sixty percent of billionaire wealth is inherited, benefits from cronyism and/or corruption, or grows from monopoly power.
Historically, only a third of billionaires inherited their wealth. Since 2023, however, all of the world’s billionaires younger than 30 inherited theirs. Generational transfers of extreme wealth like these have been and currently remain largely untaxed.
Crony connections between billionaires, and between billionaires and governments, fuel extreme wealth accumulation. For the ultrarich, it’s not about what you know, but instead who you know (who you entertain, who you lobby, whose campaign you finance, etc).
Monopolistic corporations stranglehold industries, control markets, set the rules and terms of exchange with workers and other companies, manipulate supply chains, and control pricing. These strategies accelerate the extreme wealth growth of their billionaire owners.
Most billionaires today, who hold the vast majority of the world's wealth, live in the rich countries of the Global North (despite these countries being home to just one-fifth of the world’s population — a fact that exemplifies the ongoing impacts of colonialism). Historical colonialism is the period of formal occupation and domination by rich countries that largely came to an end in the decades after World War Two. Modern-day colonialism (also known as neo-colonialism) covers the largely more informal ways in which the predominantly rich countries of the Global North continue to exercise power and control over the countries of the Global South.
National and global tax systems are also markedly and famously unequal. This article from The Guardian on tax loopholes describes Trevor Noah’s recap of the ProPublica report about how the ultrarich in the US avoid paying taxes on their income and wealth. Corporations also take advantage of similar tax loopholes. As Bernie Sanders posted, "If you paid $1 in federal income taxes this year, you paid more than: Walt Disney, Citigroup, CVS, Kohl's, Ticketmaster, Tesla, United Airlines, GoDaddy, Paypal, Palantir, Roku, HP, 3M, PG&E, and Halliburton".
What can I/we do about extreme wealth inequality?
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Right now, the most effective things any of us regular folks can do are...
- Raise awareness of extreme wealth inequality with our family, friends, and networks.
- Share our thoughts and feelings about extreme wealth inequality with our local, regional, national, and global representatives. Ideally, also demand they do something to limit/reduce it.
- Support initiatives that meaningfully limit or reduce extreme wealth inequality (like progressive tax reforms and international tax cooperation).
Is anyone doing anything to limit or reduce extreme wealth inequality?
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The good news... We see extreme wealth inequality being talked about much more often lately online and in the media! Recently, a few states in the US have enacted and proposed some local- and regional-scale initiatives.
The bad news... None of the initiatives we’ve heard of in the US have yet had a meaningful impact on limiting or reducing extreme wealth inequality. More of us regular folks need to demand our politicians do something, and then support meaningful initiatives when they're proposed. And, *cough*, don’t forget about what we all learned from The Panama Papers.1
In November 2026, Californians will vote on a ballot measure that if approved would impose a one-time 5% tax on the total wealth of their state’s billionaire residents.2
In April 2026, Governor Kathy Hochul and Mayor Zohran Mamdani of New York proposed a Pied-à-Terre Tax. Pied-à-terre is French for "foot on the ground", which typically refers to a place one owns but is not where one lives. This wealth tax, which was enacted by state lawmakers in late-May, applies a surcharge to anyone with a second home in New York City valued above $1 million.3
In March 2026, Washington State signed into law a Millionaires’ Tax which will impose a 9.9% state tax on any income over $1 million earned in a single year. This new tax will take effect on January 1, 2028, and the state will begin collecting revenues in 2029. Forty-one other states in the US tax individual earnings over $1 million per year.4 Note: These state taxes are on income, not wealth.
In March 2026, nearly fifty lawmakers in the US reintroduced legislation (named the Ultra-Millionaire Tax Act) to apply a wealth tax to the fortunes of the ultrarich. The bill would establish a 2% annual tax on the net worth of households and trusts valued at over $50 million and an additional 1% annual surtax on the net worth of households and trusts above $1 billion. The Ultra-Millionaire Tax Act is endorsed by nearly 40 unions, advocacy groups, and national organizations.5
We recently learned about Inequality.org, a global project of the Institute for Policy Studies. They’ve been tracking inequality-related news for nearly two decades and have a number of ongoing policy development initiatives related to mitigating income/wealth inequality and its impacts.6
The global initiative we’re most familiar with is from the United Nations (UN). The UN’s 10th Sustainable Development Goal (SDG) is “Reduce Inequality Within & Among Countries”. Per their description, inequality (of wealth and income as well as other characteristics like sex, age, disability, sexual orientation, race, class, ethnicity, religion and opportunity) threatens long-term social and economic development, harms poverty reduction, and destroys people’s sense of fulfillment and self-worth.7 In September 2015, all 193 Member States of the United Nations adopted a plan for achieving a better future for all — laying out a path over the next fifteen years to end extreme poverty, fight inequality and injustice, and protect our planet through its 17 SDGs.8
B Lab, its 10,000+ Certified B Corporations, and 8,000+ other companies use the SDG Action Manager to set goals, track progress, and stay motivated on specific actions to support one or more of the 17 UN SDGs.9
How do today's billionaires compare with the "robber barons" of the gilded age (or the "oligarchs" I hear about in other countries)?
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Wikipedia defines robber barons as businessmen who use exploitative practices to amass their wealth. When the term was first coined during the Gilded Age (from 1870 to the late-1890s), exploitative practices included activities like: • unfettered consumption and destruction of natural resources; • influencing high levels of government; • wage slavery; • squashing competition by acquiring their competitors; and • creating monopolies and/or trusts that control the market.10
To us, that definition of robber baron describes most of today’s billionaires (especially those labeled as “activist billionaires” or "billionaire activist investors").
According to Wikipedia, the robber barons from that time period included John Jacob Astor (real estate and fur), Andrew Carnegie (steel), Jay Gould (railroads), J. P. Morgan (finance and industrial consolidation), John D. Rockefeller (oil), Charles M. Schwab (steel), and Cornelius Vanderbilt (maritime and railroads).
Of those, Rockefeller11 has long been considered the richest person in the history of the US (when his individual wealth is compared to that year’s national GDP). For example... In 1913, his wealth was estimated at $900M — which was almost 3% of the US GDP of $39.1B. And, by the time of his death in 1937, Rockefeller's remaining fortune was estimated at $1.4B — which was about 1.5% of the US GDP of $92B.12
How does modern-day billionaire wealth measure up to Rockefeller? The 2026 GDP of the US is estimated to be about $32.4T. If we compare individual wealth to the national GDP, then the modern-day 3% level would be ≈$972B and the modern-day 1.5% level would be ≈$486B. One of today’s billionaires has that level of proportional wealth.
So again, to us, the term robber baron still fits most of today’s billionaires.
Wikipedia defines oligarchy as a form of government that's ruled or controlled by a small number of people. An oligarch is a leader of the oligarchy, who has a title of nobility and/or extreme wealth.13
To us, that definition of oligarch accurately describes most billionaires (yes, even in the US). We’ve also seen that term used much more often lately online and in the media to describe both high-level members of the US government's administration and today’s billionaires.
Another political term we believe accurately describes the ultrarich is plutocrat.
What are "plutocrats"?
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Wikipedia defines plutocracy as a society that's ruled or controlled by people of great wealth or income. It's considered a form of oligarchy (rule by the few) where the ruling few are the wealthy.14
A plutocrat is a member of the plutocracy, who has power or influence over society and government due to their extreme wealth.
Does extreme wealth inequality contribute or relate to other societal issues (nationally and globally)?
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In a word, yes.
There are innumerable negative impacts of extreme economic inequality (to use a broader term that includes concepts like income inequality and wealth inequality). These negative, and oftentimes destructive, impacts range from the individual-level to the societal- and civilizational-levels and span the local- to the national- and global-levels. One could write a PhD dissertation and/or entire book on the subject, so we won’t attempt to do our own here. Instead, we’ll share a handful of links we found interesting related to the topic and encourage you to do your own research via your favorite search engine or AI platform/agent.
In no particular order...