The Rich Keep Getting Richer

The latest version of the World Inequality Report shows the unmistakable fact that the rich just keep getting richer. This is true not just in the U.S., but in most of the world. The Guardian has a summary of findings.

The richest 0.1% of the world’s population have increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980, according to a report detailing the widening gap between the very rich and poor.

The World Inequality Report, published on Thursday by French economist Thomas Piketty, warned that inequality had ballooned to “extreme levels” in some countries and said the problem would only get worse unless governments took coordinated action to increase taxes and prevent tax avoidance.

As I noted yesterday, the general consensus is that the tax bill that Congress is now considering will contribute to ever more inequality in the U.S., pushing the global trend in income and wealth inequality, as the graph below illustrates.

The economists said wealth inequality had become “extreme” in Russia and the US. The US’s richest 1% accounted for 39% of the nation’s wealth in 2014 [the latest year available], up from 22% in 1980. The researchers noted that “most of that increase in inequality was due to the rise of the top 0.1% wealth owners”.

While inequality was high in north America and Europe, the researchers warned that the problem was even more acute in Africa, Brazil and the Middle East, where they said “inequality has remained relatively stable at extremely high levels in recent decades”.

“The top 10% receives about 55% of total income in Brazil and sub-Saharan Africa, and in the Middle East, the top 10% income share is typically over 60%,” the report said. “These three regions never went through the postwar egalitarian regime and have always been at the world’s high-inequality frontier.”

The current tax bill shows us that there is not yet a movement afoot to worry about much of anybody except the very wealthy. This is not a good thing.