It has come to my attention that there are quite a few reporters and columnists who read my blogs in search of data and ideas for their future endeavors. And I take that as a compliment. Of course not all of these people agree with my revelations! But, as best I can, I just objectively count the numbers from my national surveys of the affluent, data from the IRS, the US Census, etc. It has never been my intent to supply political ammunition to one side or the other. For some people it may be easy to focus on the numbers that fit their agenda and ignore others.
Perhaps if I was anti-rich or at least anti-high income [$1M+], I would not want to reveal that only a small percentage of these high income households receive any income from trusts or estates [T/E]. Only 5.5% receive any income from T/E or gifts for that matter. Of course, the converse is that 94.5% of high income households do not receive any T/E income. Also, of the total household income generated by those in the $1M+ category, only 1.3% of it is accounted for by T/E. The large majority of the people in this high income bracket did it the old fashioned way, “they earned it.”
It is true that this group makes up only about two tenths of one percent of all US households. But it generates nearly 10% of all income, and, depending upon the economic conditions for a particular year, it pays somewhere between 1 in 4 to 1 in 5 of all income tax dollars sent to Washington.
What precipitated this discussion today? Within a flurry of anti-rich comments in the media, one in particular is revealing.
The notion that the really high earners are earning it has become very questionable (see The New York Times).
In an earlier blog I estimated that “as many as 62.9% of high income generators are in fact owners/managers of their own businesses”. They are extremely productive both in terms of earning and in paying taxes. Only a minority of the high income producers in this country are employed by public corporations and/or Wall Street including hedge fund organizations.