The Rich get a little less RichFollow

The rich have been getting richer for so long that the trend has come to seem almost permanent.
They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.

But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.

Perhaps the broadest question is what a hit to the wealthy would mean for the middle class and the poor. The best-known data on the rich comes from an analysis of Internal Revenue Service returns by Thomas Piketty and Emmanuel Saez, two economists. Their work shows that in the late 1970s, the cutoff to qualify for the highest-earning one ten-thousandth of households was roughly $2 million, in inflation-adjusted, pretax terms. By 2007, it had jumped to $11.5 million.

The gains for the merely affluent were also big, if not quite huge. The cutoff to be in the top 1 percent doubled since the late 1970s, to roughly $400,000.

By contrast, pay at the median — which was about $50,000 in 2007 — rose less than 20 percent, Census data shows. Near the bottom of the income distribution, the increase was about 12 percent.

Some economists say they believe that the contrasting trends are unrelated. If anything, these economists say, any problems the wealthy have will trickle down, in the form of less charitable giving and less consumer spending. Over the last century, the worst years for the rich were the early 1930s, the heart of the Great Depression.

Other economists say the recent explosion of incomes at the top did hurt everyone else, by concentrating economic and political power among a relatively small group.

“I think incredibly high incomes can have a pernicious effect on the polity and the economy,” said Lawrence Katz, a Harvard economist. Much of the growth of high-end incomes stemmed from market forces, like technological innovation, Mr. Katz said. But a significant amount also stemmed from the wealthy’s newfound ability to win favorable government contracts, low tax rates and weak financial regulation, he added.

The I.R.S. has not yet released its data for 2008 or 2009. But Mr. Saez, a professor

My Anecdotal-Evidenceometer contradicts this article. I see far more Bentley's driving around the Hamptons this summer than in any previous summer.

And they are controlling the political system to the extent that the financial rules are made to benefit mostly the people in power, which is anti-democratic

Who knows? Maybe Marx was correct in his idea that any 'real' capitalist market will have people attempting to eliminate competition (in this case the rich eliminating the poor / middle class's opportunity of sharing the wealth) to monopolize.

the whole philosophy your economy is that the entrepreneur (or joint venture) is entitled to more profits than the workers (who receive a fixed wage) due to fulfilling a need in society and risking their capital.

Really? What would happen if you were to swap a factory chain owner/manager to a factory worker who never completed high school?

This is the way it should be.

Also, remember that rich and poor is relative. You may be poor compared to Bill Gates, but you're very rich compared to the homeless bums. If you support redistribution of wealth, then you will likely be redistributing your money to the extreme poor, since there are far more poor people than the rich.

You believe people should be paid based on what skills they have, not what skills they use in their job? Interesting.