America's 112 million families had combined wealth of $50.3 trillion in 2004. When those families are ranked by the size of their wealth, however, the top 1% alone held $16.8 trillion in wealth, more than a third of the United States' total wealth and more than the $16.8 trillion held by 90% of U.S. families. The top 1% had average wealth of $15 million per family in contrast to the $22,800 average wealth of the least wealthy 50% of families or the $313,500 in wealth for families ranked between 50% and 90%. [...]"We have always known that heedless self-interest was bad morals; we know now that it is bad economics." - FDR.
An examination of other types of assets reveals why cutting taxes on capital gains, dividends, and inheritances favor such a small share of the population. Those three forms of income and wealth are largely associated with three kinds of assets: stock in publicly traded companies, ownership of closely held businesses, and nonresidential real estate. The top 1% of families owned 37% of all stocks, 62% of all closely held businesses, and 47% of nonresidential real estate. Percentages for the bottom 90% were 21%, 10%, and 24%, respectively.
When it comes to the three types of assets most affected by taxes on capital gains, dividends, and estates—the very cuts being debated in Congress—the top 1% had 2.8 times as much wealth as the bottom 90%—$10.9 versus $3.9 trillion. The average combined value of those three kinds of assets was about $10 million for each family in the top 1%, but less than $40,000 for the bottom 90% of families. The average family in the top 1% has about 250 times as much to gain from tax cuts on those assets as a family in the bottom 90%. Enactment of such skewed tax cuts will further exacerbate the already sizable wealth gap.
Friday, May 19, 2006
Distribution of Wealth in the U.S.
From the EPI, here are some statistics to ponder from recently published Federal Reserve data on the distribution of wealth. [All emphasis added.]
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5 comments:
Well, sure, but then all that wealth trickles down, right?
That's why you see so many people standing on city street corners with empty cups in their hands, trying to catch the trickle.
I often wonder how these people live with themselves. I mean they read too. They have to know they're responsible for bankrupting our future. Do they get up in the morning and try not to think about it, or do they thump their chests and think how clever they are to be getting away with it?
How long before this disparity results in violence?
Libby, I honestly think those people responsible for these cuts are sociopaths. They see people suffering and they don't care because they don't have any feelings.
Graeme, you bring up a good point. People can only be pushed so far before they push back. I hear a lot of that sentiment here in Michigan because of the auto layoffs and downsizings. People are angry and feel they have nothing to lose, and that makes them dangerous.
When you read the book, "The Seven Habits of Highly Effective People," did you covet their effectiveness or try to emulate it?
When you read the book, "How to Win Friends and Influence People," did you practice what was recommended or decide it wasn't for you?
After reading, "The Wealthy Barber," did you sacrifice to save money or decide to do it when you're making more of it?
Depending on your definition of rich, lots of people are financially well-off. Rather than wanting to destroy what they have why not follow in their footsteps? Then you can do with your money whatever you wish. If you're OK giving 30% to the government and 50% to charity, go for it. If you want to invest it in companies, invest it. If you want to start an enterprise, start it. Entrepreneurs and investors are philanthropists, except the benefactors of their money are able to feed themselves and increase the productivity of their nations. Philanthropy, through necessary, must feed people every day.
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