mon claim made by those who focus on economic inequality is that if business people have acquired massive wealth they must have done so at the expense of others. The solution, they claim, would be a tax on wealth that allows could be redistributed to the working poor. A key problem with this line of thinking is that the business rich aren’t as rich as we may assume.

The reality, as economist Timothy Terrell explains, is that most business wealth is owned in the form of corporate stocks which is not as liquid as we may assume. Amazon CEO Jeff Bezos may own 500 million shares of pany’s stock, but if he tried to sell it he would get substantially less than the current listed stock price.

They may still be incredibly rich, of course, but that is only because they are making other people better off too. In acquiring their wealth they created wealth for others. As Terrell says,

Take Wal-Mart, a favorite target of unfair wage practice claims. pany’s CEO, Doug McMillon, isaccused of earning 1,180 times more than the median workerwith an pensation package of $22.8 million. To a single individual, $22.8 million seems like a lot of money. But consider that Wal-Mart also has in the order of 2.2 million employees. If the CEO were to take a $1 salary and pany were to spread that over each worker, the worker would receive a one-time bonus of $10. Mr. McMillon would quickly go bankrupt just trying to buy dinner for each employee just once.

If we look atWal-Mart’s 2018 10-K report, pany produced revenues of $514 billion. Of that, $385 billion was a direct expense, primarily sent down the product chain to suppliers to pay for their workers and suppliers and so forth. Roughly $50 billion went to store workers. Another $107 billion was on SG&A, which can be assumed to be almost entirely labor related, either direct Wal-Mart employees or panies paying their workers.

All-told, an estimated $490 billion of those $514 billion in revenues ended up in the pockets of a direct worker somewhere in the world, supporting untold millions. Just the direct Wal-Mart employees collected an estimated 20-25% of the total revenues. The total pensation package doesn’t even register as a rounding error. Investors got a dividend of $6 billion, or just 1% of that. It’s important to note that many Wal-Mart investors hold their sharein individual investment accounts or pension systems, which also benefitline workers.

The wealthy owners of Wal-Mart, the Waltons, only see 0.2% of the economic activity generated by pany. That’s a far cry from the 95% paid to workers and the remainder going to retirement pension accounts for individuals. The workers, or the 99%, are overwhelmingly the beneficiaries of all that wealth the Waltons formally own.

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