Writing May 5, 2019 in The Washington Post, economist Robert J. Samuelson explains how the gap between rich and poor is getting worse in America. It’s not about income… it’s about the incredible growing wealth disparity.
The $100 trillion question: What to do about wealth? and… what is the current administration doing about the problem?
Summarizing data from a recent Federal Reserve board study, Samuelson concludes: “The study’s most striking feature is how gigantic the numbers are.” source: https://www.washingtonpost.com/people/robert-j-samuelson/?utm_term=.551849e3978d
The distribution of wealth is highly skewed and getting worse:
“In 2018, the net worth of the wealthiest 10 percent of Americans represented 70 percent of household wealth, up from 61 percent in 1989, the study’s first year. Even among this upper crust, wealth became more concentrated. Over the same years, the share of the top 1 percent went from 24 percent to 31 percent.”
“The bottom 50 percent of U.S. households had virtually no net worth, the difference between assets and liabilities, mainly loans. Their wealth share tumbled from 4 percent of total wealth in 1989 to 1 percent in 2018.”
“The big losers over the past 30 years could be termed the broad middle class: those with wealth starting at the median (the midpoint of all wealth) and going to the 90th percentile. Their share of household wealth, though still sizable, has dropped from 35 percent in 1989 to 29 percent in 2018.”
“The truth is that we still don’t fully understand the surge in economic inequality of the past three decades. The populist temptation is to blame greed, but this is not a satisfactory explanation because greed is hardly new. It seems virtually certain that, sooner or later, taxes on the well-to-do and wealthy will go up. That’s where the money is, and that’s where the biggest private gains have been.“
Maybe it is time to revisit the recent tax reform legislation.
How did you fare under the new income tax law?
Source: Financial Planning for Women