The Rise of Income Inequality in the United States Part 2

Previously, I discussed the theory that wealth inequality is growing in the United States. A lot of this wealth inequality is due to the fact that Americans don’t report all of their information regarding their taxes. The following are some ways to improve wealth and saving data:

Employer pensions could be accurately estimated as well as the value of homes Other financial institutions could report balances as well. This would improve wealth distribution estimates. The concentration of taxable capital income has risen enormously for the 0.1%. This percentage used to be 10% in the 1960s and 1970s and has grown to 33% (2012). The rise coincides with the Tax Reform Act of 1986 reflecting changes in tax avoidance rather than in the distribution of true economic value. Some profits of partnerships and s-corps include income labor component reflecting a rise of top entrepreneurial income rather than pure capital income. Dividends and interest earned through mutual funds, s-corporations, partnerships, holding companies, and some trusts end up being included in the interest and dividends section of the ultimate individual owner’s tax return. …

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The Rise of Income Inequality in the United States

When a candidate like Bernie Sanders promises free health care and free education, many Americans have jumped at the idea of voting for him. Why? Many Americans feel something radical must happen in order to turn wealth inequality around. Here are 3 Trends in wealth inequality in the United States.

Income inequality in the United States has followed a U-shaped trend since 1913. The low-point in the wealth inequality graph occurs right around 1980. This shows that income equality was its lowest at that point than it was in the last hundred years. Most of the growth in the top 10% and top 1% can be attributed to the growth of the top 0.1%. The top 0.1%’s share of wealth has risen from 7% in the late 1970s to 22% in 2012 (most recent data available). The rise of the top 1%’s concentration of taxable income rises dramatically at the time of the Tax Reform Act of 1986 This change reflects changes in tax avoidance rather than in the distribution of true economic value

2.  The wealth share of the bottom 90% …

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