There are more millionaires now in American history than there were in 1910. Unfortunately, this isn’t a totally good thing.
It’s true that the average American is more prosperous than they were 110 years ago with a higher standard of living, but the purchasing power of the dollar has dramatically decreased during that time as well. Thanks to inflation, more than 20 million Americans have a net worth of one million dollars or more, but to be wealthy like the millionaires of the past one would need about $30 million today.
In fact, many of today’s millionaires consider themselves middle-class, with their largest financial asset being their home. But the multi-millionaires that occupy Congress and the White House appear to be oblivious to this. President Biden wants to be a transformative president that will have the government be more involved in your life while spending a lot more money than the nation can afford under what he calls The Build Back Better Initiative. Part of this initiative is the American Families Plan, which calls for $1 trillion in new spending. Part of the funding for these programs will come from an expansion of the Federal Estate Tax that will widen the tax base to any estate worth $1 million or more.
A Brief History on the Estate Tax
Federal Estate Taxes existed briefly during the 18th and 19th centuries, but they disappeared before the Supreme Court ever had a chance to decide if they were constitutional. The modern Estate Tax was introduced in 1916 during the Progressive Era of American government when there was a large populist movement to tax the rich. This law did make its way to the Supreme Court in 1921 and it was ruled as constitutional, with the reasoning being that it was a tax on the transferring of property and not the actual property itself.
Currently, estates that are valued at less than $11.58 million are exempt from this tax. And because it only affects the very wealthiest Americans, most people are either unaware of it or they are in favor of it because it’s a tax that they are not paying.