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Report: Richest 7% got richer during recovery

By Pauline Jelinek

Associated Press

POSTED:
LAST UPDATED: 09:59 a.m. HST, Apr 23, 2013



WASHINGTON »  The richest Americans got richer during the first two years of the economic recovery while average net worth declined for the other 93 percent of U.S. households, says a report released today.

The upper 7 percent of households owned 63 percent of the nation's total household wealth in 2011, up from 56 percent in 2009, said the report from the Pew Research Center, which analyzed new Census Bureau data released last month.

The main reason for the widening wealth gap is that affluent households typically own stocks and other financial holdings that increased in value, while the less wealthy tend to have more of their assets in their homes, which haven't rebounded from the plunge in home values, the report said.

today's report is the latest to point up financial inequality that has been growing among Americans for decades, a development that helped fuel the Occupy Wall Street protests.

A September Census Bureau report on income found that the highest-earning 20 percent of households earned more than half of all income the previous year, the biggest share in records kept since 1967. A 2011 Congressional Budget Office report said incomes for the richest 1 percent soared 275 percent between 1979 and 2007 while increasing just under 40 percent for the middle 60 percent of Americans.

Other details of today's new report:

— Overall, the wealth of American households rose by $5 trillion, or 14 percent, during the period to $40.2 trillion in 2011 from $35.2 trillion in 2009. Household wealth is the sum of all assets such as a home, car and stocks, minus the sum of all debts.

— The average net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while that of households in the lower 93 percent dropped by 4 percent. That is, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3.2 million from an estimated $2.5 million while that of the 111 million households in the less affluent group fell to roughly $134,000 from $140,000.

— The upper 7 percent were the households with a net worth above $836,033 and the 93 percent represented households whose worth was at or below that. Not all households among the 93 percent saw a decline in net worth, but the average amount declined for that group.

— On an individual household basis, the average wealth of households in the more affluent group was almost 24 times that of those in the less affluent group in 2011. At the start of the recovery in 2009, that ratio was less than 18 to 1.

— During the study period, Standard & Poor's 500 stock index rose by 34 percent, while the Standard & Poor's/Case-Shiller index for home prices fell by 5 percent.

Online:

Pew Research Center: www.pewresearch.org





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Kalaheo1 wrote:
"Report: Richest 7% got richer during recovery"

It sounds like you are trying to foment class warfare. Keep in mind that the richest 7% tend to very very good with money, business, and finances. That's why they are the richest 7%. They have teams of highly paid people working round the clock focused on increasing tiny percentages here and there and working on ways to profits financially as world markets go up and down.

While many people were panicking and selling stock in 2008, they were the ones taking risks by buying it. BUT if the people selling hadn't had someone to sell that stock to, they would have been in REAL trouble and our financial system would have collapsed.

Sorry, but trying to make everyone "average" didn't work well for the Soviet Union, and won't work well for the US.


on April 23,2013 | 10:40AM
nodaddynotthebelt wrote:
With all due respect, I don't believe that the rich necessarily prospered because of their good investing habits. Here's the thing, the rich have gotten by with paying the least amount in taxes due to tax loopholes that the Republicans have protected which resulted in the Sequester. The rich have gotten away with paying less taxes than their middle class and poor counterparts in terms of the proportion of their income to their tax payments. One billionaires, Warren Buffett, has been asking that the tax be raised on the wealthy including himself. He explained that there is something wrong when a wealthy man pays less in taxes than his secretary. Go to Forbes' website for the latest details. He states that raising the taxes on the rich won't stop smart investors. In a time in our country when the poor and middle class are hurting, the rich should step in and pay their fair share. They are the ones enjoying all that America has to offer. I am not for socialism by any means. All I am saying is that the rich should pay their fair share in taxes (proportionate to their income). I am not a Democrat by any means. I am obviously not a Republican. I am just a citizen that sees the injustice of the tax system that caters to the rich and hammers the middle class. The poor, too, are struggling to pay their taxes. When we have an excise tax which unfairly taxes the poor in proportion to their income it makes it even harder to get out of poverty. At the same time we have these upper 7% owning three or more houses all over the country and even other countries. Many middle class people cannot even own one house. The poor cannot even afford the high rents. And these rich 7% own several luxury cars while the middle class often get by on one car or by bus. Yes, there is something wrong when a billionaire pays less (proportionate to income)in taxes than his secretary.
on April 23,2013 | 12:02PM
Kalaheo1 wrote:
Before you get outraged by the 7%, ask yourself what the economy of Hawaii would look like without people with disposable income for expensive vacations and second homes.

Could you describe a tax system that you believe would tax the wealthy fairly? Already the top 10 percent of taxpayers paid over 70% of the total amount collected in federal income taxes in 2010, the latest year figures are available, according to the Tax Foundation, a think tank that advocates for lower taxes. That's up from 55% in 1986. What do you mean "proportional?" The wealthy are already taxed at a much higher percentage. Would you like to see that percentage go higher?

Do you think that increasing the share they pay from 70% to 80% or 90% would be more fair? While you are at it, could you describe "fair"? Say what you want about Bill Gates, but the guy pays A LOT of taxes, probably more in one year than I will in my life.

Look. I am offended by powerful interests getting the law changed to exempt themselves from taxes as much as the next guy. It bugs me that labor unions are categorized as "Not for profit" and labor union dues are tax deductible, then they use these dues to lobby our politicians and create Super PACs like PRP.

As long as politicians can be bought, there will be people to buy them, whether it's wealthy corporations or wealthy unions. Taking away one groups wealth and giving it to someone else will just allow another group to rise to power. Do you not remember the corrupt politburo of the Soviet Union and all the luxuries they allowed themselves but not the working people?


on April 23,2013 | 01:35PM
Denominator wrote:
They don't pay less in taxes. They pay a lot more. They may pay less as a proportion of income - so what? Who in the world should have to pay millions in taxes? That's outrageously unfair! The poor are not struggling to pay taxes - they aren't paying any. That's grossly unfair. As for the GE tax - take those tears to your local Democratic "one-party in charge" representative. With that an about $75 you can ride the train.
on April 23,2013 | 03:23PM
anotherlocal wrote:
"The rich get richer and the poor gets poorer." Isn't that the mainstay in America. No matter how much people try to change that, having money still means power and influence. People in power, make the laws and rules for others below them to follow. Its really not about what's fair or not and sometimes it's not even about what's right or wrong.
on April 23,2013 | 10:48AM
RichardCory wrote:
And then we have morons bombing and murdering random innocent people while these elite criminals carry on scotfree.
on April 23,2013 | 11:03AM
cunfuzd4 wrote:
you forgot the part about the unions (less than 20% of workers in Hawaii) in with that mix to combine to screw the rest of us.
on April 23,2013 | 11:39AM
nodaddynotthebelt wrote:
Exactly.
on April 23,2013 | 12:05PM
cojef wrote:
No matter what, it's either the bureaucrats get rich in another form of government or the rich gets richer in a democracy. Which do you prefer? Same o same o, except in one every aspect of one's life is government control, and the alternative, you have some measure of freedom. This has been hapanening since time immemorial.
on April 23,2013 | 11:22AM
Hapa_Haole_Boy wrote:
If you're not in the 7%, which are undoubtedly made up of mostly, if not all, business owners/entrepreneurs, and you are unhappy, then work harder and strike out on your own. It is patently disgusting that the AP deigns to put out an article that sets out to report facts but then contains a litany of subjective, liberal-sounding class-warfare whining. If you don't like it, pull yourself by your bootstraps and make a better lot of your life. Rich people (or the govt) don't owe you anything. This middle class, built by capitalism, that most of the 93% live in, wouldn't be possible without the 7% (ask communist/socialist states about that), so stop whining and get to work instead.
on April 23,2013 | 11:51AM
FWS wrote:
You got that right! The 47%ers and their liberal politicians are gearing up now to raise tax rates on the rich in order to fund even more free government giveaways. But as the late Margaret Thatcher said, “The trouble with Socialism is that eventually you run out of other people’s money.” Most of Washington hasn’t figured that out yet. Warren Buffett is willing to share some of his $620B. That’s nice. But that doesn’t mean that a Jimmy Buffett should be forced to close some of his enterprises (and put folks out of work) to pay more taxes on his $400M. You earn it, you keep it. Contrary to what some politicians have claimed, “You did build that!”
on April 23,2013 | 12:55PM
Mana07 wrote:
If this is indeed a "recovery" as the Obama administration boasts, shouldn't the rich get richer? Doesn't "recovery" insinuate making money again? Geeze
on April 23,2013 | 12:18PM
chryw8 wrote:
so much for trickle down economics.
on April 23,2013 | 01:03PM
Bdpapa wrote:
They did what needed to be done to survive. They had a lot of cushion.
on April 23,2013 | 02:02PM
AhiPoke wrote:
What's lost in many of the arguments is how the rich got rich to begin with then compare them to people who are not rich. I would guess that most of the rich are better educated and also more willing to take risks. Correspondingly, the non-rich are less educated and less willing to take risks. As an employer I see many of our local high school grads who can barely read and write. Yet, when asked about their goals, they want to be the boss. On the other hand I've seen many kids from immigrant families who work their butt off and end up being the boss. I think Americans have become too lazy to make the effort needed to succeed.
on April 23,2013 | 04:51PM
Maneki_Neko wrote:
Thanks, Barry. The rich got richer; the rest did not.
on April 23,2013 | 05:15PM
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