Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and Berkshire Hathaway CEO Warren Buffett have collectively more wealth than the 160 million poorest Americans, or half the population of the United States.
That's according to a new report from the progressive Washington, D.C.-based think tank Institute for Policy Studies. The report, published Wednesday, calls attention to the wealth inequality in the United States.
The wealthiest 25 billionaires have more than $1 trillion in wealth, that's equivalent to the wealth of 56 percent of the rest of the population, or 178 million people, the report finds.
For the report, the Institute for Policy Studies used data from the most recent Forbes 400 list and the Federal Reserve's 2016 Survey of Consumer Finances, the latest edition of the tri-annual data available.
Since the Forbes 400 was published, Bezos' net worth has increased another $7 billion, the authors note, so these calculations would be conservative for the present moment.
Bezos is worth $95 billion, Gates is worth $90 billion and Buffett is worth $79 billion, according to Forbes' real-time estimates on Thursday.
"In 1982, a wealthy American needed $75 million to enter the Forbes 400 list. The minimum wealth necessary in 2017: $2 billion. The 1982 price of admission amounted, in today's dollars, to $189 million, less than a tenth of the wealth of today's poorest Forbes 400 affluents," write the study's co-authors Chuck Collins and Josh Hoxie. "The United States is becoming, as the French economist Thomas Piketty warns, a hereditary aristocracy of wealth and power."
Also adding to the stark dichotomy between the top and the bottom economic stratus in America, the bottom 19 percent of Americans are financially underwater, meaning they have zero or negative net worth, the report finds.
The percentage of underwater households is higher among black and Latino families: 30 percent and 27 percent respectively.
"Families with no financial reserves face enormous stress," the report says. "Reserves amount to life preservers for people who experience job loss, illness, divorce, or even car trouble. Even those low- and middle-income families who do have some wealth often don't have any liquid assets — cash or savings — at their disposal. Over 60 percent of Americans report not having enough savings to cover a $500 emergency."
Billionaire hedge fund manager Ray Dalio recently talked about the issue.
"I do believe that this split in the country is the greatest problem of our time, and not just economically — socially, politically," Dalio said speaking to Recode executive editor Kara Swisher on her podcast, Recode Decode.
Buffett has also said the wealth inequality in the United States is a problem. "The real problem, in my view, is — this has been — the prosperity has been unbelievable for the extremely rich people," Buffett told PBS Newshour in June.
Also, technology will exacerbate the already severe problem, Dalio says.
"It is going to worsen because technology is a fantastic way of raising productivity by also reducing the need for people in a lot of different ways," Dalio says. "People are going to by and large, either know how to code or be increasingly unemployed because they are being replaced by the product of that. We have to deal with that issue."
The Institute for Policy Studies suggests a handful of tax strategies to work to combat the wealth inequality including raising taxes on higher incomes, increasing capital gains tax rates and expand the estate tax.
"The elite ranks of our billionaire class continue to pull apart from the rest of us," the report says. "We have not witnessed such extreme levels of concentrated wealth and power since the first Gilded Age a century ago. Such staggering levels of wealth inequality threaten our democracy, compound racial and class divisions, undermine social cohesion, and destabilize our economy."
See also:
Billionaire Warren Buffett says 'the real problem' with the US economy is people like him
How Amazon founder Jeff Bezos went from the son of a teen mom to the world's richest person
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