January 24, 2020 4:12PM # Wealth Is Business Ownership By [Chris Edwards](https://www.cato.org/people/chris-edwards) --- SHARE On her campaign website, Senator Elizabeth Warren [discusses](https://elizabethwarren.com/plans/ultra-millionaire-tax/) reasons why she supports an annual wealth tax. She says, “Consider two people: an heir with $500 million in yachts, jewelry, and fine art, and a teacher with no savings in the bank.” Is that how an heir would hold $500 million—in yachts, jewelry, and fine art? That perception of the assets of the rich seems to be common. Economist John Cochrane [suggests](https://johnhcochrane.blogspot.com/2020/01/wealth-and-taxes-part-i.html) that people think top wealth looks like Scrooge McDuck’s gold vault. Of course wealthy people own personal luxury assets, but most wealth at the top is business assets. In [this piece](https://www.cato.org/blog/top-wealth-business-assets), I look at the holdings of the richest 0.1 percent of Americans, who are people with net wealth above $16 million. Almost 90 percent of that group’s wealth consists ultimately of equity and debt in businesses, which in turn funds capital investments and creates jobs and growth. A related belief people have is that wealth at the top comes at others’ expense, as does the lady in this 1979 video below ([h/​t](https://www.mercatus.org/people/tad-dehaven)). But the reality is the opposite, as Milton Friedman explains to her on the Phil Donahue show. Wealth at the top supports opportunities for other people, as discussed [here](https://www.cato.org/publications/commentary/wealth-tax-tax-business), [here](https://www.cato.org/publications/policy-analysis/exploring-wealth-inequality), and [here](https://www.cato.org/publications/tax-budget-bulletin/taxing-wealth-capital-income). ##### Related Tags [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).