Thread by @bd_highsmith

As noted, personal wealth is *never* comprehensively reported to our government—apart from programs supporting people experiencing poverty or disability. The resulting invisibility of high-end wealth has wide consequences for our public discourse and policy design (quick thread).

https://twitter.com/bd_highsmith/status/1446899818027159554

The invisibility of wealth means: when we attempt to "target" public programs by economic circumstance (as through means-testing)—or generally, when we measure/discuss economic inequality—we look only at the FLOW of current-year income rather than the STOCK of accumulated wealth.

Why does this matter? To be sure, incomes are relevant for certain comparisons—but they're sharply limited in what they can tell us about people's economic circumstances, absent information about wealth (which, again, is generally collected only from those with the LEAST of it).

Sometimes, the effects are obvious in the absurd: Jeff Bezos—wealthiest person on earth—earned a salary of $81,840 during his entire tenure as Amazon CEO. Recently reported tax documents show his "income" in 2011 was low enough for him to claim the means-tested Child Tax Credit.

Or consider Warren Buffet, who reported an average of $31 *million* in annual income—an almost unimaginable amount, to be sure!—over a four-year period in which his wealth increased by an estimated... $24 BILLION. We know this from those same documents: propublica.org/article/the-se…

But it's not only these extreme cases that should concern us. Significantly: focusing on incomes obscures the effects of wealth transferred across generations, much of it accumulated during decades in which families of color were systematically excluded from economic opportunity.

For most of our history, laws that helped create America’s white middle class—government programs providing assistance for housing+education, public employment, & income support—intentionally excluded Black families. The consequences are visible in current distribution of wealth.

A recent Fed study found that intergenerational wealth transfers are “much more prevalent for white households” than for minority families. White families are more than twice as likely to receive inheritances as Black families—among those who did, the average amount was $236,000.

Analyzing these data, William Darity and Darrick Hamilton concluded that “inheritance, bequests, and [gifts from parents to their children] account for more of the racial wealth gap than any other behavioral, demographic, or socioeconomic indicator.” epi.org/publication/re….

Another Fed study found white Boston households were worth an average of $247,500—while median wealth of Black families was "close to zero." A white wage-earner w access to such intergenerational wealth is in a significantly diff economic position than a Black worker earning same

Here's the link to that study, from 2015: bostonfed.org/publications/o…

The white wage-earner in this example is considerably more likely to have, among much else, attended college without incurring debt, or purchased a home (any home—but especially one at an affordable monthly mortgage payment, in a neighborhood with high-quality public goods).

The Black worker who lacks access to intergenerational wealth, meanwhile, not only misses on these sources of opportunity, but also likely is diverting from current consumption to send money across generations in the other direction (e.g., helping grandparents pay medical bills).

This is important context when we discuss the distribution of economic advantage and opportunity generally—like those perennial debates about whether some particular income is "rich."

But the effects go far beyond our public debate: the invisibility of wealth also shapes policy.

Recall, again, that our govt doesn't ask—and so cannot know—about accumulated wealth, apart from the particular moments in time when it's realized as current income. So when it attempts to "target" means-tested public programs or tax income, those 2 workers are seen as identical.

This is often poor design for other reasons. As I've written: rather than condition access to critical services & infrastructure on families’ economic means, we should tax wealth wherever it exists—and provide public goods free at the point of consumption. nytimes.com/2021/06/23/opi…

But at minimum, we should recognize (as original tweet pointed out) that our govt's selective interest in measuring wealth—done to deny access to disability/poverty programs, but not even attempted for purposes of taxing unrealized assets—is an indictment of our political system.