If you’re an American, and you want that precious membership card to the ‘1%’ (in terms of annual income, that is, not overall wealth, but we’ll get more into that later) you’re going to need to work a little bit harder, and earn a little bit more.
According to Bloomberg’s wealth team, the income needed to enter the top 1% of taxpayers was $515,371 in 2017, according to IRS data released this week. That’s up 7.2% from a year earlier.
Remember, ‘the 1%’ became our modern capitalist boogeyman back in 2011 during the ‘Occupy Wall Street’ movement, when thousands of college students joined forces with criminals and the chronically unemployed to camp out in Lower Manhattan’s Zucotti Park. The park remained the epicenter of the movement for weeks, until Mike Bloomberg finally ordered police to clear the encampment.
Thousands of solidarity rallies were held around the country, and even a few other ‘occupations’ emerged, as dedicated members of the movement gathered in other public grounds in a show of solidarity with their comrades in Zucotti Park (Remember all that news footage of bedraggled-looking young people in beanies carrying signs and shouting slogans like “We are the 99%”?).
The phrase ‘the 1%’ remained embedded in our popular culture long after Occupy fizzled out. Bernie Sanders embraced the term in 2015 as he launched his long-shot campaign for president. Eventually, the lingering class resentments that helped inspire ‘Occupy’ brought about a revival of interest in ‘Democratic’ Socialism’ and hatred for the “1%” who were, according to Sanders, constantly finding strategies to avoid paying their “fair share” in Texas.
A fat lot of good that all did. Because, since the zenith of Occupy in 2011, income inequality has intensified. Now, the threshold to qualify for ‘the 1%’ – that is, the 1% of earners who report the largest amount of taxable income – has itself increased by a staggering 33%.
What’s worse? To join the top 0.1%, you would need have needed to earn $2.4 million in 2017 (the most recent year for which data are available), an increase of 38% since 2011. To join the top 0.01%, the threshold has jumped 46%. Again, this goes by annual earnings, so men like Bill Gates and Warren Buffett, two of the wealthiest men in the world, could stop qualifying for these labels if they decided to stop pulling salaries and started relying solely on their savings.
Meanwhile, the top 0.001%, an elite group of 1,433 taxpayers, pulled in at least $63.4 million each in 2017, up 51% since the Occupy protests. Of course, members of this group – many of whom are wealthy hedge fund billionaires like Ray Dalio – fluctuate often depending on the market, and whether they’re having a good year, or a bad year. Ray Dalio, the Bridgewater Associates founder who earned more than $1 billion last year (that is, in 2018, not 2017) because his firm’s funds were up double-digits, might not make the list some years if his firm loses money (his personal earnings are closely tied with the performance of his firm).
By comparison, the median taxpayer, at the 50th percentile, has seen income rise 20% since 2011.
Finally, since BBG is looking at IRS data, the reporters saw fit to remind us that rich people actually do shoulder the largest percentage of the federal government’s tax burden (though they often do pay a lower rate than their working-class…employees). The 1% earned 21% of the total income last year (remember, this doesn’t factor in existing wealth), but paid out 38.5% of their earnings in taxes. The 1% shouldered a larger tax burden than the bottom 90% combined (though remember, as Mitt Romney once said, the bottom 47% of Americans effectively pay $0 in federal income tax).
Though Romney’s made-in-private remark has been widely blamed for him losing to Obama in 2012, as the above data show, he wasn’t wrong: The wealthiest Americans foot most of the bill for financing all of the social welfare programs on which the poor rely.