The United States has a wealth distribution problem. 80 percent of the wealth created in the United States in 2017 was created by the top 1 percent of earners. That’s insane. What’s even more insane is that top one percent of earners now have more wealth then the bottom 90 percent combined.
And yet as a country we seem to be okay with this fact. We seem to be so okay with this fact that we decided to exacerbate the problem by cutting the top tax brackets from 39.6 percent to 37 percent. Even more we cut the corporate tax rate from 35 percent to 21 percent, in another move that primarily benefits the top earners.
That’s even though income disparity in the United States was already getting worse, not better, before the tax cuts. Top earners now make 90 percent more than they did in 1963, while the bottom only saw their pay increase by 10 percent over that same period. That’s an insane income disparity statistic that we shouldn’t be okay with.
Even worse, the bottom 10 percent of Americans were, on average, 1,000 dollars in debt in 2016. That’s compared to having no wealth, and no debt, in 1963. If you were in the middle (50th percentile) you doubled your wealth in that same span. But if you were in the top 10 percent it increased 500 percent, and those in the top 1 percent saw it increase by 700 percent.
What’s that all mean in one simple statistic? In 1963 the top earners had six times more wealth then the average American. In 2016 they had 12 times the wealth. It’s a problem that is getting worse not better.
We’ve been taught that if you keep your head down and work hard you can claw your way up to the top, but the truth of the matter is if you keep your head down and work hard, you’ll be lucky to claw your way out of debt. That’s what the statistics are showing us.
Income disparity like we have in the United States is crippling for an economy, it stagnates growth and increases the government’s indebtedness. Something needs to be done. We start by identifying who the one percent are.
To be in the top 1 percent of all earners your household must be bringing in a minimum of 481,000 dollars a year. And while that’s no number to sneeze at, it pales in comparison to the top .01 percent of earners, which bring in 35.1 million dollars a year, and the top .001 percent of earners which bring in 152 million dollars a year.
That’s compared to the average American household, those in the 50th percentile, that make just under 40,000 a year. I would imagine that most Americans tend to believe that more than half the households in the country make 40,000 a year, but that’s part of the problem.
We are led to believe that the wealth in our country is better distributed then it is. But the truth of the matter is, as time goes on income inequality keeps getting worse, and that’s a trend we just can’t afford to continue. We need to ensure that income inequality doesn’t get any worse then it is, or else we can rest assured that our economy, and our country, is going to suffer. dlocked0