Animation: where did all the money go?
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TITLE: 99% vs 1%: which are you?
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"We are the 99%". It's the rallying cry of the Occupy Wall Street protesters. They say that a tiny minority controls America's wealth.
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So, how rich have the richest got? And how poor are the rest of us? Is it really 99% vs 1%?
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When Americans are asked how US wealth is distributed, they think the very richest fifth should own up to 40% of the national wealth - and that includes 90% of Republicans surveyed Norton & Ariely, http://taxprof.typepad.com/files/129tn0251.pdf
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In fact, that richest group owns 85% of the nation's wealth
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Those surveyed also thought the bottom 120 million people should own around 10% of the national wealth. Norton & Ariely, http://taxprof.typepad.com/files/129tn0251.pdf
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The reality: 0.3%
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In fact, the super rich - the top 0.01% of the population - own more of the national wealth now than at any time since 1928, just before the Great DepressionShow line chart or figures from sheet 2, cell #C111 down
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And the richest 1% of the US population? They own a third of US net worth.SHOW % SPLIT - SHEET 2
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So, how did we get here?
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When times were good, everyone gained.
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In Bill Clinton's boom of 1993-2000, average incomes went up - just as they did during George W Bush's boom at the beginning of his presidencyClintons: +4%. George W Bush, 2002-2007, grew +3%Emmanuel Saez, Center for Equitable Growth, Berkeley
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But if you were rich, you gained even moreClinton: +10.3% GWB: +10.1%
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That's nearly half of all the growth in the Clinton boom years. Under George W Bush it was even moreClinton: 45%, GWB: 65%
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And there are some really rich people in the US today. In fact, there are now over 3.1m millionaires. But these are not the richest of all.http://blogs.wsj.com/wealth/2011/06/22/u-s-has-record-number-of-millionaires/http://www.theatlantic.com/business/archive/2011/06/76-million-families-and-7-000-millionaires-dont-pay-federal-income-taxes/240855/7,000 millionaires pay no tax
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The US has over 400 billionaires, more than any other country in the worldForbes
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Who's at the top of that pile?Bill Gates $59bn, Warren Buffett $39bn, Lawrence Ellison $33bnForbes
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These three have a combined net worth of $131bn
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• That's just over the combined budget shortfall of every state in the US for 2011$130bnCenter on Budget and Policy Priorities http://www.cbpp.org/cms/index.cfm?fa=view&id=711
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• More than the cost of the global war on terror in 2010$123bnForbes
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But haven't the rich lost out as well as the poor in the economic crash?
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When the economy tanked everyone suffered.
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In 2010, the average American earned $26,487 - down over $2,000 in real terms on 2006. That's a drop of 5.27%, including inflationUS Census bureau
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If you were poor it's been an even bigger drop - the 24 million least wealthy households in America saw their average income go down by 10% From $12,276 in 2006 to $11,034 in 2010.
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If you were super rich it went down too. The 400 wealthiest American households lost around 4%, including inflationBetween 2006 and 2008 - the latest year we have the data - the richest 400's household income went down by 4% - if you include inflation. IRS, The 400 Individual Income Tax Returns Reporting the Highest Adjusted Gross Incomes Each Year, 1992-2008
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That's to an average of $270.5m per householdNearly 5,400 times the average household income in the United States.
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So, the richest lost 4%. The poorest lost 10%
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Part of the reason average Americans have been hit so hard is where their wealth comes from
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Before the crash, middle-class Americans had 65% of their wealth tied up in their house. DETAILS OF SPLIT: see sheet 2Edward N. Wolff,
Levy Economics Institute of Bard College
DETAILS OF SPLIT: see sheet 2
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But the richest 1% of the population kept most of their wealth in stocks and shares and business.
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So, when house prices went south, many Americans found their wealth disappearing too
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Now, one in every seven Americans lives below the poverty line - that's a record 46.2million peopleUS Census Bureau Current Population survey
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One in six Americans have no health insurance - 50 million peopleA population twice the size of Texas (27m people)
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Of every 17 Americans, at least one will be earning below the minimum wage of $7.25 per hour
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14.5% of Americans households are defined as "food insecure". That means for every seven households, one will have trouble putting enough food on the table.http://www.ers.usda.gov/Features/HouseholdFoodSecurity2010/
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But some things are doing very well
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Sales of luxury cars are up 8.7% on the previous September - 678,434 have been sold in America so far this yearCompany reports
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Big luxury brands have reported their best sales figures in years:
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Tiffany jewellers upup 20%
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Brands like Louis Vuitton and Givenchyup 13%
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Brands like Gucci, Yves Saint Laurent up 23%
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Porsche up 59%
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MasterCard Advisors luxury spending pulse index for July 2011: up 11.6%
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And America's top executives are paying themselves very well too
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It is down but still pretty good: $4.9m each in the latest figuresUse line chart in this Graphic: http://www.washingtonpost.com/business/economy/ratcheting-up-pay-with-peer-comparison/2011/10/03/gIQAKT1FJL_graphic.htmlWashington Post
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And a Washington Post investigation found "since the 1970s, median pay for executives at the nation’s largest companies has more than quadrupled, even after adjusting for inflation, according to researchers. Over the same period, pay for a typical non-supervisory worker has dropped more than 10%"
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But don't the super rich pay taxes? They do, just not quite so much as the rest of us.The 400 wealthiest households paid $19.6bn in taxes in 2008 - the latest year we have data.
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That's 1.9% of all the income tax the IRS collects
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How does that work?politifact.com analysisDETAILS OF TAX BANDS on sheet 2
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If you are in the top tax bracket, your tax rate is 35%. But it doesn't quite work like thathttp://www.taxfoundation.org/taxdata/show/151.htmlDETAILS OF TAX BANDS on sheet 2
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Imagine you are a billionaire and your income comes mostly from investments. Imagine you are Warren Buffet. You would end up paying a tax rate of under 20%In fact, Buffett paid 17.4% tax last yearhttp://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1
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This is your "effective" tax rate. Well, probably not yours
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If you earn between $100,000 and $200,000 you will be paying up to 25% effective tax rate - and that's before payroll taxes kick in
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The 400 richest tax returns surveyed by the IRS paid just 18.1% in 2008.
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And it's got better for them. In 2001, as George W Bush became president, that rate was 23%
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So, is it 99% vs 1%?
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The richest 1% of the US population own a third of US net worth. But an even smaller group, the 0.01% of the population are at a record high. In fact, is it really 99.99% vs 0.01%?Top 0.01%'s share of the US national income stands at 5.37%, including capital gains. Canada (3.95%) Germany (2,9%).http://g-mond.parisschoolofeconomics.eu/topincomes/
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So, where do you fit?
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Are you one of the 99.99%?
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Or one of the 0.01%?
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