World’s Richest Families Get Richer Despite Pandemic

According to a recent Bloomberg report, despite the throes and angst of the coronavirus pandemic, the world’s richest families are getting richer.

Per the report, Sam Walton-founded Walmart  Inc has liquidated stock worth $6 billion in the last seven months. In the past year also, during the global pandemic, it paid $1.6 million to US workers in recognition of their efforts at the time. Despite all of these, their wealth appears unaffected.

Presently, the heirs of the founder still hold nearly 1.5 trillion shares of the company directly, plus family trusts. What accounts for this fortune has been attributed to their position as the world’s largest retailer. Their wealth has rallied by $23 billion in the last year, resulting from its rising stock price.

“Walmart’s success has kept the family from Arkansas – now in its third generation – wealthier than Jeff Bezos and Elon Musk, the two mega-billionaires of our era, and almost $100 billion ahead of the world’s second-richest dynasty, the Mars clan, according to the Bloomberg Billionaires Index,” the report reads in part.

The company benefited significantly from the palliatives that governments around the world pushed to kickstart their economy after it was battered by the virus. Then, e-commerce business boomed as there was enough for people to spend on comfort foods and pets. Not only did the Walton family cash in on this, other wealthy families also were able to collectively add $312 billion to their fortunes, representing a 22% gain since August 2020.

The Bloomberg list ranked the richest families based on multiple industries and geographies. Among them are the Johnsons, whose family business is Fidelity Investments. Its gains rose due to online trading. The Ambanis, Asia’s richest family benefited from a pivot to the green and digital industry, while the world’s biggest luxury fortunes, Paris-based Hermes, soared the most with 75% to $112 billion.

While these families’ fortunes continue to rise, the US, President Biden, and Congressional Democrats have proposed new laws to hunt the rich. Examples are the higher capital gains and income tax rates, plus other rules to make it impossible to pass on assets to heirs tax-free.

As a result, the families are already taking a step ahead of this. Such as the Mills family of Chicago, who sold their medical business to private-owned firms for more than $30 billion, in part to get ahead of more punitive rates as well as provide liquidity to family members. 

As for Walmart Inc (NYSE: WMT), its spokesperson said the Waltons’ disposals are part of an effort to keep the family’s ownership percentage stable amid stock buybacks, and wouldn’t say whether taxes are a motivation.