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- The latest data from the Federal Reserve shows that the top 1% has more wealth than the middle 60% of the income distribution.
- While most Americans have seen an increase in net worth over the last year, the fortunes of the very top have skyrocketed.
- Wealth and income inequality are top priorities for progressives in Congress.
American wealth is only getting more concentrated at the top.
As Bloomberg first reported, the middle 60% of American households by income now cumulatively hold less in assets than the top 1%. It's the latest data point in a trend of increasing wealth concentration for the top and stagnation for everyone else.
According to the latest release on the distribution of wealth in the US from the Federal Reserve, as of the second quarter of 2021, the top 1% of Americans by income had an aggregate net worth of $36.2 trillion, edging out the aggregate net worth of the middle 60% of $35.7 trillion. That's the first time the total wealth of the top 1% has been higher than the middle 60% since the Federal Reserve began tracking this data in 1989:
Both the top and the middle have added quite a bit to their aggregate wealth since the beginning of the pandemic. Government stimulus and social support packages over the last year and a half bolstered the balance sheets of the middle class, jolting that pattern of stagnation. For example, researchers at Barnard College, Columbia University, and Bocconi University say that the expansion of the child tax credit – which delivers monthly checks to parents – "represented a historic deviation from the direction of the U.S. welfare state throughout the past three decades."
At the same time, stock markets have been on a wild tear after their initial dip last March, greatly adding to the wealth of those at the top In 2020 the top 1% of Americans added around $4 trillion to their wealth – more than the total amount of wealth that the bottom 5o% of Americans held that year. Since the pandemic began, American billionaires added $1.8 trillion to their collective net worths, according to a report from the left-leaning Institute for Policy Studies and Americans for Tax Fairness.
Wealth accumulation has become increasingly harder for the typical American family over the past five decades. Jason Furman, a former top economist to President Barack Obama, found that from 1943 to 1973, the typical American family would double their income around every 23 years. But over the past five decades, that amount of time has lengthened to 100 years.
"We are in an absolute crisis of inequality," Representative Alexandria Ocasio-Cortez wrote on Twitter of Furman's findings, which he testified about in front of the Select Committee on Economic Disparity and Fairness in Growth.
Some of that inequality could be addressed if progressives get their way. They've laid out a number of tax increases aimed at the highest-earners, with revenue meant to offset spending on a $3.5 trillion infrastructure package. An analysis from the Tax Policy Center finds that the top 1% would see their taxes go up by around $160,000 if Democrats' tax plan passes; the top 0.1% would pay $1.1 million more.
In a tweet, Senator Bernie Sanders didn't mince words: "We must stand up to a corrupt oligarchy. It is not acceptable that the top 1% now owns more wealth than our entire middle class. We must pass the $3.5 trillion Build Back Better Act, invest in the working class & take on the greed of the billionaires by taxing the rich."