In last Friday’s Wall Street Journal Mansion section, there’s a story about Trump’s appointee for Undersecretary of State for Growth, Energy, and the Environment Jacob Halberg, who is listing his Miami Beach mansion for $65 million. It’s 15,000 square feet, has an aquarium so big it requires a scuba diver to maintain it, and looks like a modern museum. Halberg recently purchased a $7 million house in D.C.’s Kalorama neighborhood.
A story published in the Washingtonian last week reports that Trump’s Commerce Secretary Howard Lutnick purchased Fox News’s Bret Baier’s D.C. Foxhall Road mansion for a record $25 million—in cash.
Trump has surrounded himself with a bevy of billionaires. Seated in the VIP section at his inauguration were the wealthiest man in the world, Elon Musk, who is worth $400 billion, the chair of the Department of Government Efficiency (DOGE), Facebook’s Chief Mark Zuckerburg, and Amazon’s Jeff Bezos. They all contributed to the Inaugural event, along with Open AI CEO Sam Altman, Apple CEO Tim Cook, and Uber CEO Dara Khosrowshahi. In total, the inaugural fund raised more than $170 million. Why contribute? To gain favor and to gain access.
Linda McMahon, Trump’s pick for Education Secretary, is the wife of billionaire WWE wrestling executive Vince M. McMahon. Doug Burgum, Trump’s Interior Secretary, sold his business to Microsoft and has more than $100 million in assets. Scott Bessent, Trump’s Treasury Secretary, is a veteran hedge fund manager with a sizeable net worth. Howard Lutnick, Trump’s Commerce Secretary, made his fortune as a financial services executive. Kelly Loeffler, Small Business Administration Secretary, is married to Jeff Sprecher, CEO of Intercontinental Exchange, the publicly traded firm that owns the New York Stock Exchange. Steve Witkoff, Trump’s Middle East Envoy and real estate tycoon, has a net worth of more than $500 million.
Although Trump ran on a populist platform, all the above individuals stand to benefit immensely from Trump’s proposed tax cuts.
Since the 1970s, there has been slower economic growth and rising income inequality. In the U.S., income inequality is at its highest point in almost 75 years. Over the past 40 years, the growth rate of household income in the top quintile has been nearly four times faster than in the middle class. CEOs, on average, make 275 times more money than their workers.
Technology and automation have played a part in this massive income disparity. Work can essentially get done with fewer workers. Our economy is now driven more by professional service workers and less by manufacturing. Consumers spend less on manufactured goods than in times gone by.
The U.S. minimum wage has dropped by almost 30 percent since the 1960s when adjusted for inflation. (France’s minimum wage is equal to more than $12 in the U.S. compared to our Federal $7.25 minimum wage. Some states have increased their minimum wage above the $7.25 amount.) Unions are less powerful than they used to be. Instead of approximately 30 percent of workers belonging to a union as was the case 50 years ago, now only about 10 percent of Americans belong to a union. Climate change also has a greater effect on low-income workers as they are more exposed to environmental threats such as flooding and hurricanes.
So, what happens when wealth inequality gets out of control? It puts power in the hands of the super-rich which results in little social mobility for most of the population. Eventually, it weakens trust in public institutions and can result in rising crime rates, mental illness, and social unrest.
What should be done about improving the income inequality equation? Pretty much the exact opposite of this administration’s game plan. In addition to having empathy and consideration for the lower- and middle-class citizens, here’s what experts suggest:
Provide tax relief for low-income workers, meaning programs such as food stamps, reduced healthcare programs, housing subsidies, child and dependent care tax credits, and trade adjustment assistance.
Reduce payroll taxes and tax capital gains at higher rates.
Create a wealth tax that taxes the net wealth of the richest citizens.
Keep the estate tax to address inherited economic inequality.
Start unemployment benefits automatically during recessions.
Provide tax credits for more research and development.
Create automatic unemployment benefits.
Provide universal early childhood education and increase support for childcare.
Raise the Federal minimum wage and enforce existing minimum wage laws.
Provide more job training.
Create strong competition policies that promote technological innovation.
Eliminate noncompete agreements.
Expand access to healthcare.
Martin Luther King, Jr. once said, “Oh America, how often have you taken necessities from the masses to give luxuries to the classes. God never intended for one group of people to live in superfluous inordinate wealth, while others live in abject deadening poverty.” Amen.
Maria Grant was principal-in-charge of the federal human capital practice of an international consulting firm. While on the Eastern Shore, she focuses on writing, reading, music, and nature.
