The World’s 1% Strike it Big in 2017 & New Tax Plan May Keep it That Way

Bloomberg Releases its Billionaire Index

Bloomberg’s Billionaire Index reported that the world’s wealthiest people have grown $1 trillion richer in 2017. As of yesterday, the top 500 billionaires now control over $5 trillion, an increase from $4.4 trillion at the end of 2016. The president’s Tax Cuts and Jobs Act of 2017 may keep this momentum steady as many believe it will primarily benefit the rich in the long run. In fact, nearly 70% of Americans believe it will be more of a detriment for the lower classes. Despite a large opposition from the public, the plan was still pushed through on December 22, 2017.

The Tax Plan Synthesized

Skimming through the 500+ page tax bill, it becomes clear that there are many unanswered questions as to whether or not this plan has malevolent intent. The lowest brackets will receive virtually no changes in their tax breaks while the highest of the bunch will receive the most. It’s important to note that almost 90% of the federal income taxes come from the top 20% highest earners in the country. Middle classes are likely to save nearly $1000 each year in taxes from these new cuts. However, the new Tax Policy Center Analysis concluded that the gains from this plan will be short-lived for the majority of tax payers and 53% will experience tax hikes within the next decade. Corporate tax rates will be reduced to a flat rate of 21% and pass-through businesses (i.e. everything but C-corporations) will lower tax-liabilities of the highest earning brackets. In short, the wealthiest corporations/individuals will have increased tax responsibilities and tax breaks but it will take time to fully understand the complexity of how this affects everyone in the equation.

The World's 1% Strike it Big in 2017 bloomberg billionaires index

Billionaires & Big Business

Amazon’s founder, Jeff Bezos gained the most this year pulling in more than $34 billion followed by the legendary Bill Gates with a total net worth of $91.6 billion. Facebook’s own Mark Zuckerburg had the fourth largest increase of 45% totaling $73.2 billion. Overall, 440 of the world’s 500 top billionaires took no losses and gained a total of $1.05 trillion.

It’s part of the second-most robust and second-longest bull market in history. Of all the guidance we gave people over the course of this year, the most important advice was staying invested.

-Mike Ryan-chief investment officer for the Americas at UBS Wealth Management

Interestingly enough, the people who made the most money this year came from out of the country. Nearly 40 Chinese billionaires on the Bloomberg Index raked in $177 billion and for the first time in history, has surpassed the concentration of U.S. billionaires. Still, America has the largest visibility on the index with the total net worth of $2 trillion and tech tycoons added an additional $262 billion; the highest performing sector from the report.

The World's 1% Strike it Big in 2017 bloomberg billionaires index

Too Soon to Tell?

It’s been an interesting year economically and one of the highest achieving for the top earners around the world. The new tax plan obviously offers a lot of good for the wealthy but has benefits for other classes as well. It’s not unlikely that these policies will grant the richest demographics more wiggle room around taxes while allowing them greater access to capital for innovation and expansion. Let’s just hope that they take advantage and use the benefits wisely. Reach out to your nearest tax expert to see how you can make the most from these changes as well.


Remember to subscribe to our newsletter. Follow The Scope Weekly on Twitter and Facebook and Instagram.

If you would like to become a contributor to The Scope Weekly, read our submission guidelines, and apply. For product reviews, click here.

More from Brandon Hinojos

Mobile Apps May be Greatest Defense Against School Shootings

Digital Applications on the Rise in Wake of School Shooting Calamity
Read More