Did the Forbes 400 Billionaires Really 'Build That'?
The Forbes list is an annual ode to the American dream. The roster of richest Americans is filled with stories of entrepreneurs who started with little (or at least not a lot) and built a business and personal fortune through hard work, good ideas and perfect timing.
Recent additions include Mark Zuckerberg of Facebook and Sara Blakely, the founder of Spanx.
But a new report claims that the story of self-made wealth on the Forbes list is just that – a story. The report, from the left-leaning United for a Fair Economy, says that 40 percent of the Forbes 400 richest Americans inherited a “sizeable asset from a spouse or family member.”
Forbes says that 30 percent of the Forbes 400 members inherited their wealth and the remaining 70 percent are entirely “self-made.” (Read more: Tax Hikes Will Chill Giving, Say Billionaires)
“The truth is that Americans have never had an equal opportunity to become wealthy. Rather than concocting fables about our ‘opportunity society,’ the editors of Forbes should be examining the birthright privileges enjoyed by many of those on the list,” the report stated.
On its face, the question of whether a couple dozen billionaires made or inherited their wealth seems trivial. And even by United for a Fair Economy's calculations, the number of "self-made" rich is rising. In 1997, the group calculated that 50 percent of the Forbes list inherited all or part of their fortune.
But the question of what counts as “self-made” is now in the political spotlight after President Barack Obama’s “you didn’t build that” comments and attacks on Mitt Romney’s family privilege.
United for a Fair Economy breaks down the Forbes list using a baseball analogy. It says 35 percent of the list was born in the “batter’s box,” with a lower-middle class or middle-class background.
That includes people like Larry Ellison of Oracle , who was born in a lower-middle class part of Chicago. It also includes Harold Hamm, a one-time gas-station attendant who built an oil and gas empire.
The report says 22 percent of the list were born on first base: they came from a comfortable but not rich background and might have received some start-up capital from a family member. This group includes Mark Zuckerberg and hedge funder Louis Bacon, who started Moore Capital Management with help from a small inheritence.
Only 11.5 percent were born on second base, the report says. Second base is defined as people who inherited a medium sized company or more than $1 million or got “substantial” start-up capital from a business or family member. (Read more: Millionaire Parents Say Kids Are Not Fit to Inherit)
This group includes Donald Trump, who built on his father’s real-estate business, and Donald Schneider who inherited the Schneider International trucking company.
The report says 7 percent were born on third base, inheriting more than $50 million in wealth or a big company. The report includes Charles Koch and Charles Butt on third base.
The report says 21 percent were born on home plate, inheriting enough money to make the list. The home-basers include Forrest Mars Jr. and Bill Marriott. The report listed 3.25 percent as “undetermined,” meaning there was insufficient information on their financial background.
How do you define “self-made” wealth? Can you inherit your dad’s company and still be self-made?
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank