According to fresh data from the Bureau of Economic Analysis, the gap between Americans who own financial assets they can live off of and everyone else who relies on wages or assistance has reached a new record.
Almost 30 percent of American own such assets and the value of those assets is climbing higher than ever.
The EIG report, released Wednesday, specifically looked at income from interests, dividends and rents. The gap between counties with the lowest and highest asset income per capita rose sixfold between 1990 and 2019, as income skyrocketed in centers of finance, technology, mining and recreation.
Income from assets -- a measure of wealth that excludes wages and government assistance programs -- make for about a fifth of personal income nationwide.
“I was pretty shocked that so much of the country has derived so little benefit from the boom in asset prices and asset values that we’ve seen over the past couple of decades,” Kenan Fikri, research director at EIG, said in an interview.
I have absolutely no idea how anyone could be shocked by this, but I digress.
It remains to be seen exactly what the tax code will look like once congressional Democratic finalize and pass their $3.5 trillion reconciliation bill, but this is a prime target for pay-fors to fund it.
It's not just a matter of haves and have-nots in our economy. The haves have nearly everything and it's very difficult for anyone else to move into that category. We can reduce that gap by appropriately taxing sources of passive income like dividends and other capital gains. We could tax billionaires another billion per year and they wouldn't even notice the money is gone because their assets increase in value by that much literally every other week.
Everyone knows there's a wide gap between the rich and poor in America, but there's huge gaps even among the rich and the moderately wealthy. The purchasing power of Americans and the ability to generate any wealth in the first place is incredibly stratified. Some Americans have more money than the entire GDP of some states.