Top 1% took in record share of income in 2012

A new study says the wealth gap is now even larger than it was before the stock market crash of 1929.

By Bruce Kennedy Sep 10, 2013 2:27PM

Gold and cash (© Stockbyte/SuperStock)If our recent post about a video lecture by Chrystia Freeland on the rise of the new global superrich didn't convince you, new figures on income inequality appear to underscore her thoughts. A new academic analysis of IRS data going back to 1913, says the top 1% of Americans collected a record 19.3% of all household income last year.


According to economists at the University of California at Berkeley, Oxford University and the Paris School of Economics, that figure broke the 18.7% of the pretax income collected by the nation's top 1% back in 1927 -- shortly before the stock market crash that heralded the Great Depression.


The study also notes that, while the superrich were also hit hard by the global economic downturn, their incomes have bounced back with the recovery and that 95% of income gains reported since 2009 have gone to the top 1%.


One of the researchers involved in the study, Emmanuel Saez at UC Berkeley, says the record income for superrich Americans last year may also be due to their cashing in stock holdings to avoid newly imposed capital gains taxes.


In a paper he published last year, Saez suggested these new rich are not the stereotypical "old money" but in fact are the "working rich" -- the new entrepreneurs or highly paid "superstar" employees Freeland mentioned in her lecture.


At the same time he notes that from 2007 to 2009, average family income fell by 17.4%, the largest two-year drop since the Great Depression.


Saez says if you look at the nation's history, "falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back."


And he notes that policy changes like the Depression-era New Deal helped reduce such income concentration for decades.


"We need to decide as a society whether this increase in income inequality is efficient and acceptable," he concludes, "and, if not, what mix of institutional and tax reforms should be developed to counter it."


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354Comments
Sep 10, 2013 9:34PM
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It sure is funny how when times are bad, they cut my pay and take away my vacations, holidays, and benefits - and when things get better, I don't get them back. "95% of income gains reported since 2009 have gone to the top 1%." Well, it sure as hell didn't find its way back to me.

Oh, please.....keep telling me how I am not working hard enough - or how I am not putting in enough hours - or, how I am "living beyond my means" because I want a roof over my head, shoes on my feet, and food in my stomach. Best yet, tell me how I am guilty of "class envy". The only thing I envy is the life I had twenty years ago, and things only seem to keep getting worse....
Sep 10, 2013 3:44PM
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Both parties are in the pockets of the super rich and having elections are just a way of making the public feel like they have some choice (they dont). When both choices are bought and paid for the American Public will always lose
Sep 10, 2013 10:02PM
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Shipping jobs overseas is benefiting the wealthy.  The lack of good jobs and the high price of oil is hurting everyone else. The business of poverty creation by the wealthy is benefiting the wealthy.

Sep 10, 2013 4:07PM
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JUSTSLAPME:I agree 100%.People cry and moan about some woman geeting food tamps

to feed her kids but don`t anything about tax breaks for the rich and the trillions the pentagon

spends with plenty of waste.

Sep 10, 2013 3:56PM
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Have you noticed how each year some posters cry about how others are stealing from the Rich and yet they seem to always get far Richer? Every notice how some posters cry about how the Rich are being Punish yet it's everyone else that's working harder for less money and benefits. The top 1% just had yet another  Record Share of Income, that hardly means they earned it.

The more the Wealth is concentrated at the Top, the less control everyone else has. That's why we have too Big too Fail Banks and the Global FEDS printing to Infinity. All in a effort to insure the Rich get Richer and the SuperRich control everything and everyone. The rest of us can straight to hades as far as the elitist are concerned.

Sep 10, 2013 9:16PM
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According to the CIA Fact Book ninety-nine(99) nations have a more equitable distribution of income than the United States.
 
The inequality of income and inequality of wealth in the U.S. is  becoming more and more pronounced as time passes.
 
 
Who Rules America: Where the Wealth is Concentrated:

In the United States in 2010, the most recent data available:

The top one(1) percent own 42% of the privately held financial assets.

The top five(5) percent own 72% of the privately held financial assets.

The top ten(10) percent own 80% of the privately held financial assets.

The top twenty(20) percent own 95% of the privately held financial assets.

The bottom eighty(80) percent own 5% of the privately held financial assets.

In addition, the bottom forty(40) percent have virtually no financial assets.
 
 
The outsized inequality of wealth and inequality of income in the U. S. is bound to be detrimental to the social cohesion of the nation.
Sep 10, 2013 10:59PM
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The new definition of the American Dream antagonizes

the traditional meaning. If they work hard enough, then

all citizens can inherit the rewards of being in debt and

broke.  New labor will be plentiful and inexpensive.

Hell, people will work 3 jobs for the price of 1 and

without benefits.  Its not about what they cant afford,

but it is about what arrangement$ can be made for them

to obtain the bare necessities. We will pound in their

heads that overpriced education (an additional cash-

cow) is the key to success but tell them that they lack

experience or are overqualifed when they apply for

jobs that have already been filled internally or outsourced.  Federal and state projects

can be financed with lotteries (with ridiculous odds of winning) as the citizens

dream of ending their suffering with a big payout. 

Poverty is big business in the U.S.A.  Who profits?

Sep 10, 2013 3:58PM
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I would love to see the numbers on the amount of corporate welfare we taxpayers are paying for in the form of corporate tax breaks and credits, and subsidies. C'mon people. Quit voting for the party that stands for no new taxes, then gives all your tax money away to corporations that obviously don't need it.

 

Average taxpayer household income down, 1% taxpayer income at an all-time high - and still they cry for more.

Sep 10, 2013 9:52PM
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If there was unlimited Wealth, we wouldn't need the Global Feds printing to infinity to keep the SuperRich solvent. All this Bogus Fiat money and all the Sheep and Zombies talking it up. Fact is, morons will talk all day about how the SuperRich have earned it through hard work and being smarter than the next guy or gal. In real LIFE, that's hardly the case. The Reality is this, most folks get ahead via one of a few limited number of options. Don't let the occasional WOW story get you nor the BS folks pretending to be wealthy yet don't have two nickels to rub together.

1)Family and Friends. We live in a society that rewards friendships and family first, not necessarily the most qualified.

2)The Biggest Part of Government Spending by Far has been in Defense. By far the biggest amount of Welfare has been via Defense Contracts.

3)The Financial Industry at one point accounted for 40% of all earnings in the S&P 500 index. The Financial Industry get 100% of fake money printing from the Global Feds. Biggest Scam going and some of the biggest incomes yearly.

4)Big Oil, each year, the Crude industry has several companies in the top 10 profit earners of any Corporations Globally. We pay that price at the pump regardless of actual supply.

5)Health-Care Industry, you see the Bills and soaring cost for decades.

And on, and on.

Fact is, I am 100% certain that pocketBS isn't in the top 1%. He certainly is in the top 1% in spilling BS. Fact, folks really don't have a problem with folks become wealthy. The problem is folks can't do it by themselves. Certainly not if you run a major Corporation. It's rare to have a one man show and then that person is bought out and repeats that over and over.

I love the fact that Companies yearly like Tesla, Google, Facebook, and eventually Twitter have gone Public. I don't have a single problem with the founders making a Mint off the Offering. I don't have a single problem with Venture Capitalist making a investment in stated companies and making a Mint also. 99% of all folks do NOT want a society where everyone makes the same. That's just insane propaganda and fear-mongering. What folks do want, a living wage when Corporate America is making Record Profits and Hoarding Record Cash and the Global FEDS are printing to infinity to keep the already Wealthy Solvent. This is a Fiat Based Money System and it's rigged beyond belief. Everyone can't be wealthy, the system was never designed to allow that. And it never will.

Sep 11, 2013 1:36AM
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Oh course they got richer. Why not, they just keep taking wages away from the people the put them on their perches so their incomes get larger by the year, and force lay-offs when the profit margins are not to their satisfaction because it cuts into their bonuses. Oh, and let's not forget about the 2-teir employment system, it is a way to phase out the decent wages so WE (the common worker) may have a somewhat decent lifestyle and not have to worry how to feed our families and have a nice roof over our heads. But, how dare we force them to take wage cuts like the common workers. Sorry, I'm ranting, I see it too much in the media and where I work!!!
Sep 10, 2013 6:26PM
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In order for the already Wealthy to take more in Income, that means they will in effect, make sure everyone else make's less. Most Republicans are Fine and Dandy with that type of failed economic policies. The Big Banks weren't prepared for the Economic Downturn, that's why the Global FEDS bailed them out and are still bailing them out. Regular Folks can prepare all day long, however when the SuperRich are rigging the Game in their favor, all busts and booms will favor the SuperRich. Most Workers have earned a living WAGE. This will not happen as long as Corporations are actively distorting the Free Markets.
Sep 10, 2013 6:07PM
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Economic downturns favor the prepared (rich), economic upswings favor the prepared (rich). It should come as no surprise that whatever the cycle, the prepared are favored. The only way wages of the ill prepared can rise, is when business competes for workers and invest in competitive enterprise in a thriving economy. This will not happen while government is actively distorting the free market.
Sep 11, 2013 12:33AM
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Still waiting for a Real Player to actually "go to jail" for all the funny stuff that went on between 2006 and 2009...

 

How is it we can charge Snowden in a matter of days...and nobody has let to be charged with fraud/theft/etc for crashing the Economy...or was that legal...?

 

Extremely odd, that is...

Sep 10, 2013 5:53PM
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If it's so easy to get rich......how come there are not more rich?
Sep 10, 2013 2:59PM
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Yep, and look at the velocity of money as of late.  Its crap. There seems to be a log jam of high corporate wellfare, unemployment, wage disparity, etc etc, I could go on for ages.  Taxing more won't necessarily fix the problem long run.  We are in the midst of finding out that we can't run America like we used to.  We have to adapt to the globalized world and come out bigger and better or be left in the dust.  We need to be able to put differences aside look at that 900lb gorilla in the room. 

Saez says if you look at the nation's history, "falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back." LOVELY CONGRESS WE HAVE NOW AINT IT.


Sep 11, 2013 9:44AM
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In this country less than 50% pay taxes and those that do find legal tax loop holes. Create a national sales tax on everything but food. Leave corporate tax in place. The rich buy the most stuff and therefore would pay the most tax. All those people who work for cash would also be paying their fair share. Every pimp, Ho, drug dealer, illegal alien would now all contribute. Don't just assume because they work for cash they are poor. Even the out of country tourist are now helping us out. Now you have everyone paying. Problem is as soon as Washington has 2 nickels to rub together they hand out a quarter.   
Sep 11, 2013 12:43AM
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Looney Tunes characters can run the news business in the U.S. now and do a better job of it.
Sep 10, 2013 11:00PM
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Of course they did.   Stock market is up by QE.   
Sep 10, 2013 2:37PM
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"NEW YORK- In the biggest shake-up of the Dow Jones industrial average in nearly a decade, Goldman Sachs, Visa and Nike will join the blue-chip index, replacing three companies whose stock prices were considered too low, including Alcoa, which ends more than half a century of membership.

The three companies - an investment bank, credit card payment processor and apparel company, respectively - will also replace Bank of America Corp, Hewlett-Packard Co, along with Alcoa in the 30-stock average, the index managers said Tuesday."

 

When you consider that Goldman Sachs is not even a "bank" nor does it conduct banking services for and to most of America, you get that this article and this quote are part of a pattern. They mark the end of rich people on Earth and begin the process that singles them out, does them in and gives our planet back to people who live on it, not abuse it to death. Good bye idiots, your arrogance isn't a "talent" or attribute, it's a mark... like a bulls eye.

Sep 10, 2013 10:36PM
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Nobody seems to get the proper question out.  Ask yourselves, Why did the rich get richer under this administration?  Free money!
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