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Billionaires have plenty to celebrate despite contested US election outcome

Across the board, the 167 US billionaires also gained $57.4 billion on Wednesday as investors bid up stocks, sending major averages to the biggest rallies in five months

US Presidential elections 2020 | billionaires

Sophie Alexander Tom Maloney & Devon Pendleton | Bloomberg 

Us  presidential elections, donald trump, markets, stocks

Despite lingering uncertainty over the US election, the country’s ultra-rich already have plenty to celebrate.

Tech in Silicon Valley saw a hotly contested ballot question on the employment status of gig workers pass in their favour, while an Illinois measure to swap the state’s flat income tax with a graduated system went down in defeat after Citadel’s Ken Griffin spent millions to oppose it.

Across the board, the 167 US also gained $57.4 billion on Wednesday as investors bid up stocks, sending major averages to the biggest rallies in five months. Inc.’s Jeff Bezos led the way with a $10.5 billion gain, while Facebook Inc’s Mark Zuckerberg added $8.1 billion.

The victories cap four years of robust gains for the country’s wealthiest people. During President Donald Trump’s first term, the richest US residents added both wealth and stature thanks to surging equities markets and a raft of tax cuts. The net worth of Americans on the Bloomberg Index went from less than $1.8 trillion on election night in 2016 to more than $2.8 trillion in late October.

Prop 22

The big tech win was the passage of Proposition 22 in California, a ballot measure to exempt Uber Technologies Inc., Lyft Inc. and DoorDash Inc. from a state law requiring them to classify most of their workers as employees. The win sent Uber and Lyft shares soaring in New York trading, giving a boost to the fortunes of some of its largest shareholders.

Garrett Camp, co-founder of Uber and the only executive of either ride-sharing firm on the Bloomberg index of the world’s 500 richest people, saw his fortune climb almost $350 million to $3.4 billion.

The ride-hailing and food-delivery companies backing the measure poured a record $200 million into the campaign. That spending will likely pay off for many of the companies as Uber and Lyft alone will save more than $100 million annually on employment costs, according to one estimate.

In Illinois, Griffin sunk $54 million in a campaign opposing the tax change, while Governor J.B. Pritzker, a Democrat and Hyatt hotels heir, spent more than $56 million supporting its passage. The measure was rejected by 55% of voters.

“The citizens of Illinois have delivered a clear message to our political leaders in Springfield,” Griffin, whose trading and asset-management firms are based in Chicago, said in an emailed statement. “Now is the time to enact long-overdue reforms to save our state from fiscal ruin.”

Griffin is worth $20.4 billion while the Pritzker family collectively has almost $30 billion, according to the Bloomberg Billionaires Index.

Senate Control

The election also dealt a win to some of the country’s wealthiest as Republicans picked up seats in the House of Representatives and maintained their control of the Senate. Those majorities could thwart efforts by a potential Joe Biden administration to pass measures targeting the highest earners, such as tax hikes or changes in estate tax laws.

Despite Wednesday’s big gains, not everything came up aces for Zuckerberg on election night, including a California ballot measure that would have allowed taxes to be raised on commercial properties with much of the money earmarked for education. Zuckerberg and his wife Priscilla Chan spent millions trying to get Proposition 15 passed, but as of Wednesday afternoon, support for the measure was lagging with about three-quarters of the ballots counted.

Still, the billionaire with most at stake in the election is probably Trump, whose path to a second term now hinges on the battleground states of Nevada, Pennsylvania and Arizona.

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First Published: Thu, November 05 2020. 19:05 IST