The Federal Reserve System does a Survey of Consumer Finance each three years.- The survey for the year 2007 was completed this year, 2009.- For each one hundred dollars of pretax family income in 2007, the poor earned $1.80.- The wealthy earned what the poor would earn in the forty-two years from age 20 to 62; $75.70.
Of the wealthy income of $75.70, the bottom half or ten percent that might be thought of as fairly wealthy earned $17.10.- The top ten percent earned $58.60.- Thus the pretax earnings of the top ten percent of all families earned more than the bottom ninety percent and about equal to the bottom ninety-five percent of all families. Data for the top two, one, and one tenth of one percent are not yet available.
Of the one hundred dollars of pretax family income, the lower middle class earned $7.00 while the upper middle class earned sixty percent more; $11.30.
Less inequality existed particularly during in the third quarter of the twentieth century.- Then income taxes were significantly more progressive, corporate tax rates were higher, many fewer subsidies and loopholes existed, and union strength was much higher.- Not coincidentally that period marked a significant growth in the number of middle class families.
Comparatively, income and wealth inequality in the United States is much like that of Russia and closer to that which exists in Mexico than to either Canada or Western Europe.- Of all free or relatively free forms of economy, capitalism has proven to be the greatest creator of wealth.- So too is it the worst distributor of wealth.