(CBS Local)– Ever wonder how the extremely wealthy live? Author Michael Mechanic has you covered with his brand new book from Simon & Schuster called “Jackpot: How the Super-Rich Really Live—and How Their Wealth Harms Us All.” Mechanic initially wanted to speak with lottery winners about their lives, but many stay in the shadows in order to avoid family and friends asking for money.
Instead, the author explored how the United States of America got to a point where 40% of Americans have no wealth at all. Mechanic talked with CBS Local’s DJ Sixsmith about this topic, his conversations with the super wealthy and the potential impact of a wealth tax from President Joe Biden.
“It was actually an idea I had two decades ago and our fascination with lottery winners,” said Mechanic. “There’s the conventional wisdom that winning the lottery ruins your life. I wanted to see the truth behind that. It actually would’ve been really impractical because lottery winners go off the radar completely. I decided to flesh out what a jackpot meant. That would mean more realistic things like having a startup company that sells or getting in on a massive IPO, things that we can relate to a little more than the dumb luck of winning the lottery. Also, there’s a lot of nuance because how you earn your money has a lot to do with how you react to it.”
One of the biggest points Mechanic wanted to make in the book is about wealth inequality in America. He discovered that people in the 1% pay about two cents for every dollar they earn in sales tax, while the poorest people in this country pay about 10 cents for every dollar they earn.
“Part of the reason for that is the way we tax goods and services,” said Mechanic. “A lot of the things that are consumed by wealthy people, like accounting services and legal services, buying box seats at Warriors game, theater and opera tickets, those things aren’t taxed. Whereas, every day items that families need are taxed. There’s also caps on luxury items. If you buy a $100 million yacht in New Jersey, I think the maximum sales tax is $22,000. In South Carolina, there’s a tax cap of $500. You could buy a gulfstream jet in South Carolina and pay $500 sales tax.”
While there is a lot of talk nationally and locally about wealth inequality, Mechanic says we really don’t realize how crazy the wealth gap actually is.
“The least wealthy 40% of Americans have zero wealth,” said Mechanic. “The people at the top of that range have some, but the people at the bottom are in debt. If you look at that group collectively, there is no wealth, which is astounding in a country that is supposed to be egalitarian. I talk about about how this came to pass and a lot of it is in our tax code. Our tax code is a moral document and an expression of our society and what we want to reward and what we want to punish. For quite a while, it has rewarded passive capital.”
Mechanic’s book is available now wherever books are sold.