The super-rich fear for their pandemic profits – economy

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The super-rich don’t even know what to do with their money.
© APA / GÜNTER GRANITZER

Multimillionaires and billionaires made decent profits during the pandemic. Now, however, they fear that they will be asked to pay more in the future.

In the 2020 pandemic, entire countries went into lockdown and employees went to work from home – at the same time, billionaires’ fortunes grew by a fifth. Almost two-thirds of them got richer, according to data from Forbes magazine by mid-December. Now the super-rich are considering how they can keep their money safe, as the Reuters news agency interviews with seven millionaires and billionaires and more than 20 consultants show.

The idea behind this is that governments and society as a whole could ask them to pay for the cost of the crisis. “It’s pretty obvious that everyone has to pay for it,” says Rob Weeber, head of asset manager Tiedemann Constantia.

Billionaires benefit from the pandemic

Billionaires in the US also did well in the pandemic, according to studies by the Institute for Policy Studies and Americans for Tax Fairness. From the outbreak of the epidemic to early March, her fortune grew by $ 1.3 trillion, almost half. Their total wealth of $ 4.2 trillion is now twice the collective wealth of the lower half of the population. About 328 million people live in the United States.

However, it is also particularly the American super-rich who assume that their wealth will increasingly come into the public eye. It is clear from the interviews that they expect higher taxes under US President Joe Biden. The economist and Nobel Prize winner Joseph Stiglitz refers to the four years under Biden’s predecessor Donald Trump, during which “inequality was celebrated”. “People say that wasn’t really the right answer,” he says of the tax cuts for the wealthy at the time.

Tax havens in demand

In response, US billionaires are now setting up trust funds in particular for their children or other relatives. The current tax exemption threshold is $ 11.7 million per person. At least – because Biden spoke out in the election campaign in favor of lowering it back to $ 3.5 million as in 2009. “We saw an increase in trust formation and funding in the fourth quarter of last year,” said Alvina Lo, chief investment strategist at Wilmington Trust. The vast majority of customers had waited for the outcome of the presidential election in November “and then shifted into high gear”.

Some of the measures are more drastic. The super-rich move to states and regions where tax laws and society are more favorable to them. The consulting firm Henley & Partners, which specializes in citizenships and places of residence in London, reports a surge in inquiries from well-heeled customers during the pandemic: The number of calls from the USA rose by 206 percent in 2020, and from Brazil by 156 percent. Switzerland, Luxembourg and Singapore are particularly popular as long-term places of residence, says Babak Dastmaltschi from Credit Suisse.

The super-rich in emerging countries are particularly panicked

The super-rich in emerging countries in particular see a further danger here: the fear that the burden on social systems could lead to unrest. The younger generations of rich families in particular seek their salvation abroad. “In principle, Covid tore off the emperor’s clothes,” says Beatriz Sanchez, who is responsible for Latin America at Julius Baer. “Suddenly it became clear to the people: Our health system is not strong, we cannot really fall back on our social network.”





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https://www.vienna.at/superreiche-fuerchten-um-ihre-pandemie-gewinne/6941425

superrich fear pandemic profits economy

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