Who Are the 1%?

When the president calls for the rich to pay a little more, what does he mean?  Who does he mean?  That is what Mike Bauer, from David Horowitz's shop, wants to know.  He sent me the following questions:

1. What number and percentage of Americans earn over $250K?
   
2. What number and percentage of Americans have a net worth over $250K?
   
3. What number and percentage of Americans earn over $1M?
   
4. What number and percentage of Americans have a net worth over $1M?

The simple answer is: it does not compute.  Because as soon as you start asking about "number and percentage of Americans" you get into questions of persons, households, adults, residents, income-taxpayers, "undocumented workers," and all the rest.  Despite the best efforts of governments to make their peoples "legible" it is still hard to know what is going on.

But Question 1 is fairly easy.  The IRS has lots of tax stats here with lots of Excel spreadsheets.  Here's one: 10in01pl.xls.  It says that 2.7 million 1040 tax returns out of 143 million reported $250,000 adjusted gross income or more.  So that works out at 1.9 percent.  Unfortunately, the spreadsheet doesn't go above $250,000.  So to answer Question 3 we'll have to find another one.  Here is 08in05tr.xls, which has the income that qualifies you for the ought point one percent.  Its last year is 2008, but it took $837,708 to get in the club.  Back in 2007 at the height of the evil unsustainable Bush boom--engineered by greedy bankers with which community activists and Fannie and Freddie had nothing to do-- you needed $1,039,732 to get in the 0.1% club.

Now wealth for Questions 2 and 4..  The data isn't so easily available on this.  But the Census Bureau has Table 721 on Family Net Worth, and the median family net worth in 2007 was $120,000.  Then there is Table 717 on top wealth holders.  It shows 2.7 million with wealth over $1.5 million.  Now the Census Bureau has 115 million households for 2007-2011.  So you can say that 57 million households had more that $120,000 net worth, and 2.3 percent have net worth more than $1.5 million.

So let's get back to the four questions:

1. What number and percentage of Americans earn over $250K?
   Answer: 2.7 million and 1.9 percent.
   
2. What number and percentage of Americans have a net worth over $250K?
   Answer:  About 25 million households and 25 percent.
   
3. What number and percentage of Americans earn over $1M?
   Answer: 142,000 and 0.1 percent.
4. What number and percentage of Americans have a net worth over $1M?
   Answer: Over 3 million households and 3 percent.

Of course, Americans in general have suffered more in the Great Recession than these numbers suggest. Minorities and women hardest hit. And it will get worse, much worse, as the Fed's money printing starts a huge bear market in bonds and a huge inflation in consumer prices.