Oct 08, 2021
As the bombshell Pandora Papers continue to expose dubious details about how the world's superrich hide their fortunes and avoid paying their fair share of taxes, Bloomberg on Friday published an analysis of U.S. Federal Reserve data revealing that Americans in the top 1% income tier now have more wealth than the entire middle class.
The middle 60% of U.S. households by income--a measure economists often use as a definition of the middle class--saw their combined assets drop to 26.6% of national wealth as of June, the lowest in Federal Reserve data going back three decades. For the first time, the superrich had a bigger share, at 27%.
"Middle class" is defined here as households earning $27,000 to $141,000 annually, while the income threshold for membership in the 1% is $500,000 per year. According to the Fed data, 1.3 million U.S. households now have more wealth than the 77.8 million families in the middle 60%.
By comparison, in 1990 the top 1% held just 17% of the nation's wealth--less than half of the middle class' 36%. Since the Occupy Wall Street movement elevated conversation about "the 99% v. the 1%" from the lexicon of class warfare to mainstream debate a decade ago, the top 1% now enjoy a 5% bigger slice of the wealth "pie," at the expense of everyone else.
\u201cThe top 1% has long been richer than all poor people combined.\n\nNow they're richer than the entire middle class, too.\n\nAnd the Senate is cutting services for the poor and middle class to avoid making the 1% pay the same in taxes as everyone else.\nhttps://t.co/8IqyXBK9cM\u201d— Dan Price (@Dan Price) 1633726140
The middle class' share of real estate, equities, and private businesses has also steadily declined in recent decades. While the middle class owned 44% of U.S. real estate assets in 1991, its share is down to 38% today.
The new analysis comes as American politicians and people debate what fair taxation looks like.
While Republicans and right-wing Democrats in Congress vehemently oppose raising taxes on the wealthiest individuals and corporations, most Americans--including a slim majority of self-described Republicans--back President Joe Biden's plan to raise taxes on people earning over $400,000 annually, according to a recent survey by Data for Progress and Invest in America. The poll also found that a majority of Americans, including 47% of Republicans, support raising the tax rate on large corporations from 21% to 28%.
\u201cNEW: @DataProgress poll!\n\n\u2705Voters overwhelmingly support the ways the #BuildBackBetter plan is paid for!\n\u2705The majority of voters want to raise taxes on the wealthy.\n\nHey Congress, let's get it done.\nhttps://t.co/Ojn8TqDVlh\u201d— Patriotic Millionaires (@Patriotic Millionaires) 1631898840
The Bloomberg report also comes amid ongoing revelations from the Pandora Papers, a tremendous trove of nearly 12 million documents whose contents include details about how the U.S. is a "spectacularly corrupt tax haven," as one journalist described the findings.
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