The Rich Are Getting Richer
(June 6, 2005) The income of the super rich in the U.S. is growing faster than any other income class, according to research conducted by The New York Times and published in its June 5 issue.
The top 0.1 percent (e.g., the top one-thousandth) of all incomer earners saw their share of the nation's income nearly double from 1980 to 7.4 percent. In contrast, other income earners in the top 10 percent saw their share increase by much less, while the share of income earned by the bottom 90 percent decreased.
In addition, the average income of the top 0.1 percent was $3 million in 2002, more than double the average reported in 1980. No other income group rose nearly as fast, according to The Times.
The article estimates that if President Bush's tax cuts are made permanent, the super rich will continue to benefit, while the 'merely' rich will fare much less well. One key reason is the alternative minimum tax, which will tend to affect individuals in the $100,000 to $500,000 income ranges. In contrast, those individuals with more than $1 million in income tend to have more dividend and investment income, which are not subject to the tax.
Another reason is that tax cuts over the last 10 years have dramatically lowered rates on income from investment.
'The fundraising profession is currently witnessing a boom in major and planned gifts, both in the number of such gifts and the number of positions that charities are hiring,' said AFP President and CEO Paulette V. Maehara, CFRE, CAE. 'This new data indicates that these types of gifts are only going to grow in importance, especially as wealth becomes more concentrated in fewer hands.'
The Times' estimates were based on a model used by the U.S. Treasury Department, as well as from a variety of existing research and data.
The article, along with the research sources, can be found on The New York Times website. Registration is required to view the article, but there is no cost.