Top 1 per cent took record share of 2012 US income
WASHINGTON - The income gap between the richest 1 per cent and the rest of America widened to a record last year.
The top 1 per cent of U.S. earners collected 19.3 per cent of household income in 2012, their largest share in Internal Revenue Service figures going back a century.
U.S. income inequality has been growing for almost three decades. But until last year, the top 1 per cent's share of pre-tax income had not yet surpassed the 18.7 per cent it reached in 1927, according to an analysis of IRS figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.
One of them, Emmanuel Saez of the University of California, Berkeley, said the incomes of the richest Americans might have surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.
Last year, the incomes of the top 1 per cent rose 19.6 per cent compared with a 1 per cent increase for the remaining 99 per cent.
The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 per cent in the Great Recession of 2007 to 2009 as stock prices plummeted. Incomes for the bottom 99 per cent fell just 11.6 per cent, according to the analysis.
But since the recession officially ended in June 2009, the top 1 per cent have enjoyed the benefits of rising corporate profits and stock prices: 95 per cent of the income gains reported since 2009 have gone to the top 1 per cent.
That compares with a 45 per cent share for the top 1 per cent in the economic expansion of the 1990s and a 65 per cent share from the expansion that followed the 2001 recession.
The top 10 per cent haven't done badly, either. Last year, they captured 48.2 per cent of income, another record. Their biggest previous take was 46.3 per cent in 1932.
The top 1 per cent of American households had income above $394,000 last year. The top 10 per cent had income exceeding $114,000.
The income figures include wages, pension payments, dividends and capital gains from the sale of stocks and other assets. They do not include so-called transfer payments from government programs such as unemployment benefits and Social Security.