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This article, at least, talks about income, rather than wealth. Income we have a concrete measure for, at least, rather than attempts at estimation with giant
by andrewla 8y ago
This article, at least, talks about income, rather than wealth. Income we have a concrete measure for, at least, rather than attempts at estimation with giant unknown error bars. But income isn't a stable metric either. The IRS has been continually changing rules over time. Most notably, there has been a consistent push to crack down on "fringe benefits" and make them taxable. "Company cars" and things like that are essentially dead.
To some degree the changes in the income characteristics here reflect changes in the nature of compensation, from various tax dodges to just cash compensation. It was once easier to give executives a car for their exclusive use, rather than pay them the value of the car, since it was an allowable business expense. That is no longer the case (unless the car is intrinsic to their job) so rather than giving them a car and paying taxes on it, they just give them the money and let them buy their own car.
To what degree does this inform the changing characteristics of income in the top percentiles? That's an unknown question, but the best answer we have is just to assume that nothing has changed in the actual income distribution except the switchover from fringe benefit based compensation to taxable compensation. But that, unfortunately, renders moot the entire point of articles like this, about "worsening disparity", which is a convenient bogeyman to point to about the dangers of unchecked capitalism. So instead, we just pretend that this doesn't exist, and we continue to use made-up numbers to try to make a social point.
- weberc2 8y ago"Wealth" isn't a very good metric for other reasons as well. Notably, lots of people who make median-ish income save every penny for retirement and accumulate a lot of wealth, but they are often categorized as "greedy top X%". In our zeal to find someone to lay blame on, we often pick the wrong targets.
- zajd 8y ago> Notably, lots of people who make median-ish income save every penny for retirement and accumulate a lot of wealth Not even in the same ballpark. You're not getting to $100mm in wealth on a $50k salary. But you can be born in to it overnight. Or make that in one day in the market if you're Bezos.
- frockington 8y agoThis is precisely why my goal is to set up my children better than I was and teach them to do the same. As long as I am constantly improving and can share that with my children I am happy. Comparing yourself to others, specifically to the super rich, is not a healthy strategy long term.
- weberc2 8y agoI didn't claim $100mm; I was thinking more like $1-10M.
- stvswn 8y agoOne more example of why income is not the right measure: Naples FL is always on these lists, a place I'm very familiar with. There are a few hedge fund types using Florida as a haven from state income tax, they have big houses on the beach. That's your 1% of Naples. Then there are tons of retired folks from across the wealth spectrum. Retired people can be quite well off and have a low "income."