The chart above is twofold. The upper part shows the evolution of the average income of the top 0.01%, this time expressed as a multiple of income Bottom 90%. For example, in 1975, this segment earned an average of 120 times the income of the vast majority of the population, but 1,100 times in 2007 (600 times if we deduct capital gains).
The lower part shows the evolution of the marginal rate of tax on U.S. income – we can indeed expect a fiscal impact on the wealth of the top 0.01. Surprisingly, the marginal rate reached a record 94% during the war, but remained at over 90% between 1950 and 1965, growing economy. The thin line represents the threshold of the marginal, which is essential to perceive the impact of the rate (if the rate of 90% applies only 3 people in the country, there will inevitably be ineffective). When Franklin Roosevelt three times the marginal rate when he came to power, the marginal is multiplied by 10 and starts at $ 1 million and later $ 5 million, which corresponds to amounts of approximately 200 and $ 800 million Constant 2008: Edge is very limited and largely symbolic, but the scale was revised and expanded, the measure is still very effective. The arrival of the war will greatly lower the tranche, up $ 10 million in constant 2008 when the rate will be 90%. The scale is necessarily very effective in preventing the rise in inequality. It is then the downward trend in rates and the wafer, until thin current rate of 35% from $ 350 k income.
Of course, the vast compression of inequalities after the war boom is not due only to the tax schedule, but we see it played an important part – the symmetry of the two curves is striking. The marginal rate is ultimately a good indicator of labor market regulation and the level of social acceptability of inequality and very high wages.
The first chart above shows the structure of incomes of the top 0.1% among those from labor (wages), those derived from capital (dividends, coupons, annuities, …) and mixed income (non-wage income, business , The professions, …). The second analyzes the evolution of the one part coming from the Capital for the top 0.5%.
It is noted that the fall in the share of income of this group is almost entirely due to the collapse of capital income, particularly from the dividends. For the top 0.5%, and they spent 40% of income in the 1920s to 215% in the years 1950 and 1960, and at least 10% in the 1990s.
It also notes that the recent increase was in the form of wage income. Thus, in the 20′s, the richest Americans were mostly pensioners, living on the earnings of their vast wealth, mainly in the form of dividends. Currently they are working rich, super-employees « receiving huge salaries.
The following graph, representing the change in revenue mix of subgroups of the lowest decile in 1929, 2000 and 2007 allow us to better see the evolution.
In 1929, the share of capital income is from the majority of the top 0.5% and overwhelming from the top 0.1%.
In 2000, the share of capital income was very small for all subgroups are mostly wage income.
In 2007, only the top 0.01% has seen a marked increase in the share of income from capital. It is they who have captured the additional dividends generated.
There is much about the fall of dividends received by this group. As is easily verified also that the total dividends paid nationally did not experience severe changes, we can conclude that the decline reflects a broader distribution of capital income, which are found less concentrated in few hands.
The graph below illustrates changes in the share of U.S. leaders and two senior fractiles in the overall wage bill.
These three groups have in effect an identical part in 1940. We see that they follow a parallel evolution, but the leaders increased significantly since 1955, and remains above almost 40 years. Developments on the 2000s show undoubtedly deepen the differences.
Obviously, if the gaps are widening, it is because of the increase in average wages of the groups. It is seen from the chart above how the evolution of CEO compensation is not commensurate with the average wage of the whole population (2 scales are logarithmic, and stowed 1 to 100 can be compared).
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Tags: Inequality