Fans of grand fortune want us to believe that the rich have never paid much more of their income in taxes than they do now. Our actual history says different.
The people who lived — and suffered — through America’s original Gilded Age had plenty of problems. One just happened to be statistical. Back then, in the 19th century’s closing decades, everyone knew that the United States had become significantly more unequal. But no one had a firm take on just how unequal.
Good, reliable statistics on income and wealth distribution simply didn’t exist. The nation had no taxes on income and wealth — and no particular bureaucratic reason to collect data on either.
One Gilded Age U.S. senator, Richard Pettigrew from South Dakota, did do his best to prime the data pump. Pettigrew secured an amendment to the 1890 census bill that required enumerators “to ascertain the distribution of wealth through an inquiry into farms, homes, and mortgages.” A few years later, Pettigrew would use data from that enumeration to charge that 4,000 families, just 0.03 percent of the U.S. population, held 20 percent of the nation’s aggregate wealth.
Bur Pettigrew knew the nation needed much more in the way of raw data. He tried to get the next census, in 1900, to include a deeper dive into who owned what.
“The question as to what becomes of what the toilers of the land produce, whether it goes to them or is taken from them by special privileges and accumulated in the hands of a very few people,” Pettigrew told his Senate colleagues, “reaches ultimately the question of the preservation of free institutions.”
Pettigrew’s colleagues, by and large, paid no attention. Meanwhile, other statisticians went scrounging for alternate data. One analyst used New York inheritance records to estimate that America’s richest 1 percent owned just over half the nation’s wealth. Another analyst, a distinguished academic, calculated that the nation’s richest 1 percent might actually be holding as much as 90 percent of the nation’s treasure.
In 1907, the Columbia University sociologist Franklin Giddings would dismiss all these estimates. Truth be told, Giddings pronounced, “we do not know, in any scientific sense of the word ‘know,’ what the concentration of wealth in the United States is.”
Now we do. Today, here in America’s second Gilded Age, we’re experiencing a veritable Golden Age of income and wealth distribution stats.
A good chunk of this data flow comes from official government sources. The modern federal income tax, enacted in 1913, has generated a century-worth of statistics on income, and we have valuable additional data — on high-end wealth holdings — from the nation’s estate tax records.
Over in academia, ace researchers — led by the French scholars Thomas Piketty, Emmanuel Saez, and Gabriel Zucman and NYU’s Edward Wolff — have pioneered innovative new approaches to crunching all these government stats. Some scholars are now even making well-educated guesses on how much wealth the super rich are stashing away in offshore tax havens.
But the research know-how currently focused on how rich our rich have become has spread far beyond government agencies and academia. One media outlet, Forbes magazine, has turned its annual — since 1982 — tally of America’s 400 richest into a lucrative publishing franchise.
This Forbes achievement reflects a broader phenomenon: Wealth in the United States — and the world — has become so concentrated that simply servicing the wealthiest among us has become an intensely profitable enterprise. Financial industry giants and boutique firms alike are scrambling to get the global rich to let them manage their money. Luxury firms have products and services to sell them.
All these financial and luxury industry firms have an insatiable hunger for data on the wealthy and their ways. A variety of consulting and research firms have been rushing to feed that hunger.
This past June, researchers at Capgemini, a Paris-based consulting corporation, published their 22nd annual World Wealth Report. Also published this past June: the Boston Consulting Group’s 18th annual Global Wealth report. Earlier in the year, the London-based property consultancy Knight Frank brought forth its annual Wealth Report, an ambitious affair that mixes statistical anecdotes in with distributional trends. Americans, Knight Frank’s research notes, now own 407 super yachts almost at least as long as half a football field.
This fall will see ninth annual release of what many independent observers see as the best of the business world’s stabs at counting the fortunes of the world’s most fortunate, the Global Wealth Report from the research institute of the Swiss banking giant Credit Suisse.
You may have consumed the Credit Suisse data without even realizing it. Oxfam, the UK-based activist charity, has been using the Credit Suisse numbers to calculate the astonishing facts on inequality the group releases each year on the eve of the Davos World Economic Forum. Just 42 people, Oxfam revealed this past January, own as much wealth as the bottom half of humanity.
This past week has seen the latest entry into 2018’s global wealth report sweepstakes, the newly published World Ultra Wealth Report from Wealth-X, a New York- and London-based company focusing on intelligence and research on the top-end market.
The prime takeaway from the sixth edition of the Wealth-X World Ultra Wealth Report? Our world’s wealthiest had a banner year in 2017, even by their own lofty standards. The “ultra high net worth individual” crowd — those 255,810 swells with personal fortunes of at least $30 million — last year saw their combined wealth soar by 16.3 percent.
The United States sports the single-largest share of these ultras, 31 percent of the total, 79,595 individuals in all. No other nation comes close. In fact, the United States hosts more ultras than the world’s next five ultra-packed nations — Japan, China, Germany, Canada, and France — combined.
The Wealth-X researchers make no moral value judgment about the staggering concentrations of wealth their numbers describe. Nor do any of the other consulting outfits busy producing annual world wealth reports. They’re all just pointing financial and luxury firms to business opportunities.
Moral judgments about our inequality — and action steps against it — will have to come from the rest of us. In the meantime, we do appreciate the statistics. Keep ’em coming.
Sam Pizzigati co-edits Inequality.org. His latest book, The Case for a Maximum Wage, has just been published. Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Follow him at @Too_Much_Online.