Critics of economic equality, like conservative Washington Post columnist George F. Will, often argue that wealth gaps are justified because, for example, thetop 40 percent of Americans pay 82 percent of the taxes. What he and others fail to point out is that the top 40 percent hold about 94 percent of the nation's wealth. So by this standard, they are actually paying 12 percentage points less than they should be. But comparing how much top earning groups pay in taxes doesn't really justify or measure wealth gaps. To measure the gaps, you simply need to compare the wealth or incomes of various income groups over time. That's what the chart above does. It shows that gaps in wealth between four income groups: the top 1 percent, the top 10 percent (includes the top 1%), the 50 to 90 percent (middle class), and the bottom 50 percent (working class).* Four major conclusions can be drawn from this chart, which was created from data provided by the World Inequality Database.
The wealthiest 1 percent have an average of nearly $18 million in assets, compared to $3.6 million for the top 10 percent (which includes the top 1%), $140,355 for the middle class (50% to 90%), and $13,374 for the bottom 50 percent (working class).
Gaps in wealth between the wealthy and the poor have been growing rapidly since 1981, when Reagan became president and enacted legislation that gave massive tax cuts to the wealthy, especially the top 1 percent, whose wealth increased 57 percent from 1981 to 1988.
The gap in wealth between the top 1 percent and bottom 50 percent was $17,598,146 million, which is five times greater than the gap in 1981 ($17,598,146 ÷ $3,331,638).
The greater the wealth, the faster the gaps grow. The wealth of the 1 percent is growing much faster than the wealth for top 10 percent, and both of these groups are gaining at a much faster rate than the bottom 50 percent, which is falling behind in terms of relative wealth (i.e., their slice of the wealth pie is shrinking).
*The amounts for the working and middle classes (my labels, not WID's) are so small they barely show up on this graph.
For more details, see drafts of chapters from my book (click HERE to download the PDF, a work in progress).