Home > Uncategorized > Income and wealth—the top and the very top

Income and wealth—the top and the very top

from David Ruccio

Skellington is right: in my post on Tuesday, I did not separate out people at the very top from the rest of those at the top. That’s because, in the data I presented, those in the top 0.1 percent were included in the top 1 percent.

Unfortunately, I don’t have the same kind of breakdown in the composition of incomes as I used in those charts. What I do have are data on the shares of income and wealth for the top 0.1 percent versus the remainder of the top 1 percent (so, top 1 percent to but not including the top 0. 1 percent).

Income

Clearly, income within the top 1 percent is unequally distributed—and has gotten more unequal over time. While the top 0.1 percent (approximately 326.5 thousand individuals) captured about 9.3 of pre-tax income in 2014 (up from 3.9 percent in 1979), the remainder of the top 1 percent (and thus about 2.9 million individuals) took home about 10.9 percent of pre-tax income in 2014 (up from 7.3 percent in 1979). Over time (from 1979 to 2014), the top 0.1 percent has increased its share of the income going to the top 1 percent from a bit more than a third (35 percent) to almost half (46 percent).

wealth

The distribution of wealth within the top 1 percent is even more unequally distributed than the distribution of income—and it, too, has become more unequal over time. While the top 0.1 percent owned about 19.1 percent of total household wealth in 2014 (up from 7.2 percent in 1979), the remainder of the top 1 percent owned about 18. 2 percent of household wealth in 2014 (up from 15.2 percent in 1979). Thus, over time, the top 0.1 percent has increased its share of household wealth owned by the top 1 percent from about one third (32 percent) to over half (51.3 percent).

The conclusions, then, are straightforward: For decades now, those at the top have managed to pull away—in terms of both income and wealth—from everyone else in the United States. And, by the same token, those at the very top have been distancing themselves from everyone else at the top.

No matter how much they do battle over their respective shares, the one thing that ties together those at the top and those at the very top is that their income and accumulated wealth derive from the surplus created by the bottom 90 percent.

  1. patrick newman
    April 23, 2017 at 9:44 am

    Why is it that few advanced countries do not have an effective wealth tax. Income is always taxed although where taxes such as VAT/sales tax, some local taxes on property, government charges etc form a significant proportion of government revenue are to varying degrees regressive and thus the redistributive effects of progressive income tax is ‘compromised’. A wealth tax based on real estate property is not easy to dodge other forms of wealth (shares, mobile property, cash) present more of a challenge but are not impossible. Any radical government wishing to reduce inequality and provide good social programmes (e.g. free healthcare, well funded schools etc) must surely have a a wealth tax portfolio.

  2. patrick newman
    April 23, 2017 at 9:46 am

    First line should read “Why is it that few advanced countries have an effective wealth tax. – apologies

  3. C-R D
    April 23, 2017 at 1:34 pm

    “Why is it that few advanced countries have an effective wealth tax”. Very simple. Because the wealthy hires politicians to write the law.

  4. April 24, 2017 at 5:40 am

    The cure for the situation is simple and straight forward. Per Theodore Roosevelt, “No man is above the law and no man is below it: nor do we ask any man’s permission when we ask him to obey it.” We just need to ensure this directive is implemented and enforced. At some points in US history this was the case. It is no longer the case. How do we make it the case again?

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s