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Among countless Americans, the financial landscape over the recent five-year span has been challenging. Prices have escalated while salaries remains unchanged. Elevated mortgage rates have made buying a home a grim prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have reported they're postponing major life decisions, including starting a family or changing careers, because of economic uncertainty. But for a select few of people, the recent half-decade couldn't have been more prosperous.

The Billionaire Boom

The fortune of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even throughout all the financial uncertainty, the stock market has only continued to grow. This increase has primarily advantaged just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

Despite the imbalance as this division seems, it's the system working as it is existing today.

"Affluent individuals have acquired their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others understand what exactly it means to be "rich" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins categorizes these "affluence districts" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a family earnings of at least $110,000 and an net worth of over $1.5m.
• The villages get more restricted as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

In total, the residents of these villages constitute the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really different cultural experience. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system shuts down – you're set."

The Billionaireville Effect

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The power that this group has far surpasses those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "abolish billionaires" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the separation between private conduct and a framework of policies," Collins said. "We should be concerned about an economic system that funnels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins separates it into four parts: getting the wealth, protecting assets, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a reasonable quantity of wealth through establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires significant resources and tactics in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, offshore bank accounts, secret corporations, non-profit organizations and other mechanisms to hold assets," he explains.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and ensure continued growth.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking those corners of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people comprehend is these billionaire private-equity funds are what happens when so much wealth is parked in so few hands, and they can kind of turn around and say, 'Where else can we squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Tangible Effects

The consequences of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the suffering and anger of this kind of society can lead to profound dissatisfaction.

"The most powerful wealthy elites understand people are being marginalized [and] are financially struggling," Collins said, adding that conservative politicians have been good at connecting with a potent "fake grassroots movement".

Government Truth

The contradiction, Collins points out in his book, is that elected representatives have appointed a string of billionaires to cabinet positions. Along with affluent innovators who had temporary but significant roles overseeing substantial reductions to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from congressional allies, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While government groups continue to argue that border policies and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: Will the opposing party, which has also been captured by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the bill really did reflect the will of the majority of people who really want lawmakers to solve some of these pressing issues," Collins said. "Wealthy influence is not about developing so much as stopping. It's easier to block than it is to make something substantial take place, but the institutional knowledge is there. We know what that looks like."

Collins is positive that there can be change, but said it would require sustained political momentum.

"It may be before we know it that the tide turns, and then it really is about maintaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can address this. It is fixable."