"No man can become rich without himself enriching others"
Andrew Carnegie

Saturday, July 14, 2012

The Rich, Very Rich, and, Now, the 'Volatile' Rich

Income tax
Income tax (Photo credit: Alan Cleaver)
The rich tend to be lumped together as one economic group, as if people earning $250000 a year (or even $1 million a year) are pretty much the same as those making $50 million. But a new analysis of top incomes tells us that there is a big difference between the super-rich and the merely rich in how they earn money. The paper, from Roberton Williams of the Tax Policy Center, compares two sets of 2009 IRS data. One group is American tax filers reporting income of $1 million or more. The other is for the 400 top earners in America, who made an average of $271 million each. Americans with an adjusted gross income of $1 million or more make about a third of that from salaries and wages. Capital gains used to account for more than a third of their income, but since 2000 that share has fallen to 17 percent. Today, the largest share of their take comes from "other income" - mainly earnings from partnerships or S-corps, as well as other capital gainsThe "fortunate 400" - or top 400 earners - make much more of their income from capital gains and other income than from salaries and wages, which account for only 9 percent of their income. Capital gains as a share of their income has also fallen, from 72 percent in 2000 to 46 percent in 2009. ... Continue to read.
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