It’s now harder than ever to rank among America’s wealthiest 1%.
According to an Internal Revenue Service report released last week, one must now make at least $380,354 in adjusted gross annual income to crack the 1% line. In 2000, Americans needed to earn $313,469 to reach that level, and 10 years before that they needed to earn $167,421. The increase comes largely from rising inflation during the past decade.
However, if you are content to rank among the top 5%, this requires earning $159,619 or more, which is a bit more reasonable but still a lot.
The study found that the wealthiest 1% of Americans now earn 20% of the nation’s total adjusted gross income in a year, and the top 5% earn more than a third. Yet many Americans who fall into the bottom 95% support policies like the Bush-era tax cuts, which are more favorable toward those in the top 5% and 1%.
Previous studies have found that part of the reason for this is that Americans who are not wealthy often believe they will be one day, and therefore support policies that treat the rich with kid gloves because they want to be rich down the road.
But if the IRS report shows anything, it’s that there really is a large divide between what the wealthy earn and what the rest of America earns. The IRS notes that this income disparity declined a bit during the recession, as typically happens in a bad economy, but it will likely begin to expand again as the economy starts to grow.
Check out MainStreet’s roundup of the states with the most millionaires.
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