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Among countless US citizens, the financial landscape over the last half-decade has been tough. Costs have soared while wages remains stagnant. Steep mortgage rates have made buying a home a bleak prospect. The unemployment rate has been creeping up.

Most people have stated they're postponing major life decisions, including raising children or switching jobs, because of economic uncertainty. But for a tiny fraction of people, the past five-year period couldn't have been more prosperous.

Wealth Explosion

The wealth of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even during all the financial uncertainty, the stock market has only persisted in expanding. This expansion has largely benefited just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this division seems, it's the system working as it is presently configured.

"Rich elites have purchased their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Analyzing Income Brackets

To help others comprehend 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 "Affluencia" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins organizes these "affluence districts" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an net worth of over $1.5m.
• The villages get more exclusive 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.

Collectively, the residents of these villages comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system collapses – you're set."

Ultra-Wealth Impact

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The control that this group has substantially outweighs those who are simply affluent, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" doesn't capture the real problem and has a "suggestion of eradication" to it.

"It's the difference between personal actions and a system of rules," Collins commented. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: getting the wealth, protecting assets, policy control and hyper-extraction.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a modest amount of wealth through starting or running a successful business, which could get them admission in Affluent Town.

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

"Wealth defense professionals use a broad range of tools such as financial instruments, international accounts, anonymous shell companies, philanthropic entities and other vehicles to hold assets," he explains.

Political Influence and Hyper-Extraction

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

The final phase is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to touch nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to fund private companies.

"Private equity is looking for 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 stored in so few hands, and they can kind of turn around and say, 'Where else can we extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Tangible Effects

The consequences of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"The most powerful oligarchs understand people are being excluded [and] are financially struggling," Collins said, adding that conservative politicians have been good at connecting with a potent "false common-man appeal".

Government Truth

The contradiction, Collins points out in his book, is that government officials have appointed a string of billionaires to cabinet positions. Along with affluent innovators who had short yet influential roles overseeing significant decreases to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from political partners, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While government groups continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been influenced by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the most of people who really want lawmakers to address some of these critical challenges," Collins said. "Wealthy influence is not about developing so much as blocking. It's easier to block than it is to make something meaningful happen, but the muscle memory is there. We know what that looks like."

Collins is positive that there can be change, but said it would require continuous government action.

"It may be before we know it that the balance shifts, and then it really is about maintaining a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can solve this. It is solvable."