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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsForget the 1% It is the 0.01% who are really getting ahead in America
http://www.economist.com/news/finance-and-economics/21631129-it-001-who-are-really-getting-ahead-america-forget-1A new paper by Mr Saez and Gabriel Zucman of the London School of Economics reckons past estimates badly underestimated the share of wealth belonging to the very rich. It uses a richer variety of sources than prior studies, including detailed data on personal income taxes (which the authors mine for figures on capital income) and property tax, which they check against Fed data on aggregate wealth. The authors note that not every potential source of error can be accounted for; tax avoidance strategies, for instance, could cause either an overestimation of the wealth share of the rich (if they classify labour income as capital income in order to take advantage of lower rates) or an underestimation (if they intentionally seek out lower yielding investments for their tax advantages). Yet they believe their estimates represent an improvement over past attempts.
The results are enough to make Mr Piketty blush. The authors examine the share of total wealth held by the bottom 90% of families relative to those at the very top. Because the bottom half of all families almost always has no net wealth, the share of wealth held by the bottom 90% is an effective measure of middle class wealth, or that held by those from the 50th to the 90th percentile. In the late 1920s the bottom 90% held just 16% of Americas wealthconsiderably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929. From the beginning of the Depression until the end of the second world war, the middle classs share of total wealth rose steadily, thanks largely to collapsing wealth among richer households. Thereafter the middle classs share grew along with national wealth thanks to broader equity ownership, middle-class income growth and rising rates of home-ownership. The expansion of tax breaks for retirement savings also helped. By the early 1980s the share of household wealth held by the middle class rose to 36%roughly four times the share controlled by the top 0.1%.
From the early 1980s, however, these trends have reversed. The ratio of household wealth to national income has risen back toward the level of the 1920s, but the share in the hands of middle-class families has tumbled (see chart). Tepid growth in middle-class incomes is partly to blame; real incomes for the top 1% of families grew 3.4% a year from 1986-2012 while those for the bottom 90% grew 0.7%. But Messrs Saez and Zucman reckon the main cause of falling middle-class net worth is soaring debt. Rising home values did little to raise middle-class wealth since mortgage debt also soared. The recession battered home prices but left the debt untouched, further squeezing middle-class wealth.
The really, really rich get much, much richer
On the other side of the spectrum, the fortunes of the wealthy have grown, especially at the very top. The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealthback to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of Americas wealth, just shy of the 1929 peakand exactly the same share as the bottom 90% of the population. Meanwhile the share of wealth held by families from the 90th to the 99th percentile has actually fallen over the last decade, though not by as much as the net worth of the bottom 90%.
The results are enough to make Mr Piketty blush. The authors examine the share of total wealth held by the bottom 90% of families relative to those at the very top. Because the bottom half of all families almost always has no net wealth, the share of wealth held by the bottom 90% is an effective measure of middle class wealth, or that held by those from the 50th to the 90th percentile. In the late 1920s the bottom 90% held just 16% of Americas wealthconsiderably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929. From the beginning of the Depression until the end of the second world war, the middle classs share of total wealth rose steadily, thanks largely to collapsing wealth among richer households. Thereafter the middle classs share grew along with national wealth thanks to broader equity ownership, middle-class income growth and rising rates of home-ownership. The expansion of tax breaks for retirement savings also helped. By the early 1980s the share of household wealth held by the middle class rose to 36%roughly four times the share controlled by the top 0.1%.
From the early 1980s, however, these trends have reversed. The ratio of household wealth to national income has risen back toward the level of the 1920s, but the share in the hands of middle-class families has tumbled (see chart). Tepid growth in middle-class incomes is partly to blame; real incomes for the top 1% of families grew 3.4% a year from 1986-2012 while those for the bottom 90% grew 0.7%. But Messrs Saez and Zucman reckon the main cause of falling middle-class net worth is soaring debt. Rising home values did little to raise middle-class wealth since mortgage debt also soared. The recession battered home prices but left the debt untouched, further squeezing middle-class wealth.
The really, really rich get much, much richer
On the other side of the spectrum, the fortunes of the wealthy have grown, especially at the very top. The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealthback to the 1916 share, which is the highest on record. Those down the distribution have not done quite so well: the top 0.1% (consisting of 160,000 families worth $73m on average) hold 22% of Americas wealth, just shy of the 1929 peakand exactly the same share as the bottom 90% of the population. Meanwhile the share of wealth held by families from the 90th to the 99th percentile has actually fallen over the last decade, though not by as much as the net worth of the bottom 90%.
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Forget the 1% It is the 0.01% who are really getting ahead in America (Original Post)
Scuba
Nov 2014
OP
belzabubba333
(1,237 posts)1. we need to figure out a way to play the 1% against .01%
brooklynite
(94,607 posts)2. ...or maybe you don't have to...
Once again, the assumption is that anyone successful, no matter where on the spectrum, must be a money-grubber ready to stamp down anyone lower on the totem pole. I know plenty of 1%ers who earn their money responsibly, believe in principles of fairness and equity, and spend a lot of money to elect Democrats who will hopefully raise their taxes. But as long as you choose to build a brick wall between all the haves and the presumed have-nots, you've save conservatives the trouble.