Sunday, December 4, 2011

Who exactly are the wealthiest 1%? Study takes a look -

WASHINGTON — American households with taxable incomes over $343,927 -- the wealthiest 1percent of the country -- are in the national spotlight.

So who are these people?

CEOs, other executives, Wall Street bankers and other financiers make up 45percent of the 1percenters, according to a 2010 review of tax returns by three economists.

The study, by Bradley Heim of Indiana University, Jon Bakija of Williams College and Adam Cole of the Treasury's Office of Tax Analysis, was the first to closely analyze occupations of households at the top of the income ladder.

It supports the argument that dramatic increases in executive compensation and stock options have played a significant role in the increase in income inequality, Bakija said.

Between 1979 and 2005, finance professionals in the top 1percent tripled their share of national income -- from 0.82percent to 2.77percent.

Executives and CEOs increased their share by 74percent -- from 3.65percent to 6.35percent.

"Looking at the evidence, I think it's fair to say it looks like tax policy has very little to do with this increasing concentration at the very top," Heim said.

Even within the 1 percent group, there are wide variations in income, with billionaires at the top end and dual-income professionals such as physicians and lawyers on the bottom, economists say.

"I think there's this kind of perception that the top 1percent are made up of high-flying finance people," Heim said. "The group is a lot more heterogeneous than you might expect."

The study by Bakija, Heim and Cole found the top 1percent includes medical professionals (15.7percent), lawyers (8.4percent), computer, mathematics, engineering and technical workers (4.6percent), salespeople (4.2percent), workers in blue-collar and miscellaneous service jobs (3.8percent) people working in real estate (3.2percent) business operations workers (3percent), entrepreneurs (2.3percent), professors and scientists (1.8percent), and arts, media and sports professionals (1.6percent).

Some in the top 1percent are superstars within their profession, the study's authors say.

Only 12.5percent of the 1percenters studied by Bakija, Heim and Cole didn't have a spouse. Among the 38percent who listed an occupation for their spouse on their tax returns, the top occupations were executives and medical professionals.

Understanding income equality and the reasons behind the growing gap have major public-policy implications, Bakija said.

"The government has promised huge spending for the future, especially on health care for the elderly, and we're going to have to pay for it somehow," he said. "How do we pay for it? Do we raise taxes or do we cut spending? How much can we raise taxes before it becomes counterproductive? This is part of that debate."

by Brian Tumulty USA Today Dec 4, 2011

Who exactly are the wealthiest 1%? Study takes a look -

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