I’ve been checking out Wikipedia’s stats on wealth distribution in the 'States and I’ve hit a snag.
Basically the stats all come from the census bureau and the upper limit on their stats is $150 000 per year. This isn’t even small potatoes to the super-rich of the world.
There is an often repeated phrase that “America’s richest 10% possess more than 80% of America’s wealth”. But I’ve found it really difficult to nail down any reliable sources on this.
So here are my questions:
What percentage of America’s money is in the hands of the op 1%?
What percentage of America’s money is in the hands of the op 10%?
And for both of those questions: exactly how much money is that?
Are you talking about money or wealth? Because they aren’t the same thing. It’s not like there is some big, fixed pile of money and all the rich people took it all so there isn’t anything left for the poor folk (mostly because we aren’t on the gold standard).
Bill Gates and Warren Buffett together are worth about $100 billion. Most of that is tied up in their companies though. But if you figure the mean family net worth is about $100,000 (and that is probably high), these two guys alone are worth more than a million households. Then again, they also created a lot of wealth for millions of households.
Total Wealth (Value of all assets minus mortgages, debt, etc)
Top Quartile 87% $43.60
2nd and third Quartile 13% $6.50
Bottom Quartile 0% $0
As I said, Gates’s wealth is mostly tied to Microsoft which only earns money if he runs it well.
Money sitting in a bank account isn’t “earning the account holder for doing nothing”. The bank is paying him to hold onto his money so they can lend it out to other people.
*The chart indicates that the top 20% in terms of wealth owned 81.3% of the total wealth in 1983 and this percentage has increased over the years and reached 84.7% in 2004. the forth 20% which is the second in terms of wealth owned 12.6% of the total wealth in 1983 and this has declined over the years and the percentage reached 11.3% in 2004. the third 20% owned 5.2% of wealth in 1983 and this level has declined over the years and reach 3.8% in 2004, finally for the bottom 40% they owned 0.9% of wealth in 1983, reached -0.7 in 1989 and this value reached 0.2% in 2004, the chart indicates that the bottom 40% owned less than 1% of total wealth over the period and this percentage has declined over the years.
The chart indicates that there is a problem of wealth inequality in the US whereby the top 20% own over 80% of the wealth, this percentage has increased over the years and expected to increase in the future. The bottom 40% who are the majority own less than 1% of the wealth in the US and this trend is expected to continue in future.* from here People often talk about how our country is attempting to redistribute wealth, but people seem to ignore that the wealthiest individuals are being taxed substantially less now than during most of this country’s recent history. From 1917 until now we have had tax rates for the highest incomes groups up to 92% of their income. That rate was not for just a few years. In 1917 the tax rate was 67% for this group and it was still 70% in 1980. From 1950 to 1963 the tax rate was 91% (92% in 1952 and 1952). During the Reagan presidency the tax rate topped out at 69.13%. The top tax rate in 2010 was 35%. The lowest tax rate during the last 90 years was 24% in 1929, the year the Great Depression began. So why are people concerned that the wealthiest Americans are getting taxed too much when they are being taxed at the historic low that they are now? from here
Account holders are essentially lending their money to the bank for the bank’s use in investments, for which they are paid interest. They’re not “doing nothing.”
No, they are storing their excess cash in a bank because it is safer than keeping it under the bed. The banks entice customers to store it with them - while they play around with it - by offering rewards. The ones with the best rewards get the most customers.
Did any depositors loose money on deposits in Icelandic Banks? My impression was that the Icelandic gov’t covered the domestic deposits and that the various European gov’t covered the deposits of their citizens that made deposits. The various governments lost money, but did depositors?
If you are looking for bloated plutocrats, Gates and Buffett are two of the worst examples you could choose. They both have moved huge amounts of money into the Bill and Melinda Gates Foundation. Even some of the for profit activities by Bill Gates seem to have public benefits, like his support for the Traveling wave reactor.
It’s only a rough estimate of the true curve of incomes, but it is a very close curve even still. The income distribution of the US looks about like this:
If you take the number of people earning a particular income and multiply it by that income, you get a graph that looks like this:
Bill Gates and Warren Buffett may both have a ton of money, but there are so few of them that they still can’t compete. Government taxes, on average, remove about 40% of all income. It’s a decent bet that nearly all of that money comes from the $25k to $100k income bracket.
You’re probably on firmer ground using the guy in the #3 slot - Larry Ellison. He does make charitable use of some of his fortune, too, but not to the extent of Gates or Buffett, and his charitable exercises often seem to have ulterior motives. He also doesn’t seem to mind visibly living like a plutocrat.
Dude’s foundation pays my salary, so I can’t say that all of his charitable activities are bogus ;). More seriously, the Ellison foundation provides a pretty nice chunk of research funding on aging research. It’s somewhere in the tens of millions, which comfortably funds several dozen labs/projects. And I can guarantee that none of my results will make him live any longer, as much as that’s what he might be after… (there’s a significant amount of funding in this field that comes from Rich Old Dudes That Don’t Want To Die…)
But yeah, Ellison’s charitable activities are a pretty tiny part of his wealth. Especially compared to the likes of the Gates foundation, which plans to use up the combined fortunes of Gates and Buffett over a few decades.
Using 2007 numbers based on “Modified Taxable Income” we have people with income of $10 million or more at the very highest line the IRS provides. These people make 8% of total income for the year. They pay 10% of all total income tax for year.
Now, let’s look at $25k to $100k. They make 35% of total income for the year. They pay just 26% of the total tax for the year. So, they don’t pay “nearly all” - in fact, they pay only one quarter of the total income tax.
You’ll also note, I hope, that the people making 35% of the income are paying 26% of the tax, while those making 8% pay 10%. So the myth that Bill Gates and Warren Buffett pay a lower tax rate than their secretary is also complete rubbish that is not based in fact.
A single person with no other income is in the 25% tax bracket if they make $60,000. Furthermore, that 25% is just the top bracket. Assuming $60,000 income from wages, no capital gains, standard deduction, single exemption and no tax credits, she’d have just $9,500 in tax (roughly) for tax year 2006. 9,500/60,000 is 15.8% overall tax rate.
In order for her tax to be 30%, she’d have to make a lot more. How much more? At $160,000 she’d still only be 22.7% (though at least then she’d be higher than Buffett). At $260,000 she’d be at 26.6%. At $500,000, she’d finally hit 30.3%.
There is simply no way in which Warren Buffett’s statement is true. Either he’s just plain wrong or he’s leaving out significant facts.
Well, now you’re ignoring FICA (6.2%), state income tax (varies by state, but 4% is average), and any local real estate or property taxes. Plus, you can be pretty sure that the secretary is paying a lot more sales tax as a proportion of her income.
