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Top 1 percent claim record share of household income

The income gap in the U.S. was at its widest in history last year, with the top 1% raking in 19.3% of total household income.
Posted By KRISTEN BUTLER, UPI.com   |   Sept. 10, 2013 at 4:53 PM   |   Comments

Sept. 10 (UPI) -- The richest 1 percent in the U.S. pulled in 19.3 percent of total household income in 2012 -- their largest share of total income in more than 100 years.

The wealthiest 1 percent of Americans haven't had this large a share of the nation's wealth since 1927, when they claimed 18.7 percent.

Since the recession officially ended in 2009, 95 percent of reported income gains have gone to the top 1 percent. During the economic expansion following the 2001 recession, it was 65 percent.

In 2012, the incomes of the top 1 percent rose nearly 20 percent, while the remaining 99 percent saw their incomes increase by 1 percent.

The top 10 percent captured a record 48.2 percent of total earnings for 2012. The largest take previously was 46.3 percent in 1932.

The top 1 percent of American households had income above $394,000 last year. The top 10 percent had income exceeding $114,000.

Using Internal Revenue Service data dating back to 1913, economists at the University of California, Berkeley, the Paris School of Economics and Oxford University conducted the analysis.

Berkeley’s Emmanuel Saez noted that the incomes of the wealthiest spiked last year in part because higher capital gains taxes that took effect in January led many to cash in stock holdings.

Nonetheless, the income gap in the U.S. has been growing for nearly 30 years, and doesn't show much sign of letting up. Unemployment remains high at 7.2 percent, and corporate profits this year hit a record as a share of U.S. economic output.

Saez, a top researcher in the topic of wealth and income inequality and winner of last year's John Bates Clark medal, found in a separate analysis that the top 1 percent of earnings posted 86 percent real income growth between 1993 and 2000 while the real income growth of the bottom 99 percent of earnings rose 6.6 percent. He recommends significantly higher taxes on the rich -- up to 70 or 90 percent.

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