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A viral image from 2019 that’s being recirculated on Facebook uses dated figures.
Hypothetically, seizing the estimated $5 trillion in current wealth from America’s billionaires would be enough to run the federal government for about eight months, based on what was spent in fiscal year 2021.
No one is suggesting a 100% tax on the wealthy.
Such a move would likely reduce federal revenue because other wealthier people would seek to protect their assets.
Around the time Democrats briefly considered a proposed "billionaires tax," a two-year-old Facebook post resurfaced claiming that even if all the wealth of the nation’s billionaires were seized, it wouldn’t run the federal government for very long.
"The 550 US billionaires together are worth $2.5 trillion," said a viral image with the post. "If we confiscated 100% of their wealth, we'd raise enough to run the federal government for less than 8 months. Perhaps our problem isn’t how much billionaires have but how much politicians spend."
The figures in the 2019 post are not currently accurate for the number of billionaires and their total wealth. But current estimates and spending figures indicate the billionaires’ total wealth would be enough to cover government spending for about eight months.
The viral image is a Feb. 1, 2019, tweet by Antony Davies, an economics professor at Duquesne University in Pittsburgh and a fellow with the free-market Foundation for Economic Education.
At the time, Check Your Fact found that the billionaires’ wealth would have covered about nine months of spending, not less than eight months.
So, what do the latest figures show?
Estimates put the total wealth of America’s billionaires at $5 trillion, while the federal government spent nearly $7 trillion in the fiscal 2021, which ended Sept. 30.
Here are the breakdowns.
More recently, the Institute for Policy Studies estimated that as of Oct. 15 there were 745 U.S. billionaires, together worth slightly more than $5 trillion. That’s a 70% collective increase in fortune since the start of the COVID-19 outbreak on March 18, 2020, according to the institute.
That’s the figure the Institute for Policy Studies and the Tax Foundation referred us to when we asked about the claim we’re checking.
We also reached out to Davies, noting that we’re checking the accuracy of the Facebook post currently being circulated. He pointed us to the Institute for Policy Studies as well and cited the fiscal 2022 budget, which lists $7.25 trillion in outlays for fiscal 2021.
So, in round numbers:
The government spends $7 trillion in a year — or about $19 billion per day.
Tapping the billionaires’ $5 trillion would pay for about 263 days of federal government spending — or more than eight months.
There are some caveats.
Primarily, no one is suggesting a 100% tax.
But Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, said billionaires have seen their effective tax rates go down compared to the average taxpayer, "so surely billionaires can pay more."
Davies, the author of the original post, told PolitiFact that even if there were an effort to confiscate all of the billionaires’ wealth, it would actually net less than eight months’ worth of revenue because very little of the wealth is in cash. Billionaires would have to liquidate their stocks, bonds, land and other assets in order to pay the tax and if they did so, it would drive down stock and bond prices and the prices of buildings and land, and in turn, generate less than $5 trillion, "possibly a lot less."
Alex Muresianu, a federal policy analyst at the Tax Foundation, said the claim is "a useful illustration of the problems with comparing what would be a one-time revenue increase for the government as a way to pay for expenses that recur every year."
A 2019 viral image newly reshared on Facebook claimed: "The 550 U.S. billionaires together are worth $2.5 trillion. If we confiscated 100% of their wealth, we'd raise enough to run the federal government for less than eight months."
The two figures are out of date, but the thrust of the claim is accurate: The estimated $5 trillion in wealth of the nation’s billionaires is enough to cover about eight months’ worth of federal spending.
We rate the claim Mostly True.
Facebook, post, Oct. 23, 2019
Twitter, Antony Davies tweet, Feb. 1, 2019
Data Lab, "In 2021, the government spent $6.82 trillion," accessed Nov. 1, 2021
Email, Kim McIntyre, spokesperson for the Committee for a Responsible Federal Budget, Nov. 1, 2021
Institute for Policy Studies, "U.S. Billionaires are Now $2.1 Trillion Richer Than Before the Pandemic," Oct. 18, 2021
Alex Muresianu, federal policy analyst at the Tax Foundation, Nov. 1, 2021
Treasury Department, "Joint Statement by Secretary of the Treasury Janet L. Yellen and Acting Director of the Office of Management and Budget Shalanda D. Young on Budget Results for Fiscal Year 2021," Oct. 22, 2021
Check Your Fact, "Fact Check: Would The Wealth Of Every Billionaire In America Keep The Government Running For Less Than 8 Months?", Feb. 15, 2019
Forbes, "Forbes World's Billionaires List — The Richest in 2021," accessed Nov. 1, 2021
Forbes, "Forbes’ 35th Annual World’s Billionaires List: Facts And Figures 2021," April 6, 2021
Email, Antony Davies, economics professor at Duquesne University in Pittsburgh and fellow at Foundation for Economic Education, Nov. 1, 2021
White House, "Budget of the U.S. Government Fiscal Year 2022," (Table S–1) accessed Nov. 1, 2021
Bloomberg, "Bloomberg Billionaires Index," Oct. 31, 2021
PolitiFact, "Ryan says a 100 percent tax on millionaires would only fund government for four months," Oct. 20, 2011
Email, Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, Nov. 1, 2021
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