Richest get even richer

The wealthiest Americans took a record slice of the income pie in 2005, according to an IRS report.
OCT 12, 2007
The wealthiest Americans took a record slice of the income pie in 2005, a bigger helping than in the late-1990s bull market. A new report from the Internal Revenue Service revealed that two years ago, the top 1% of earners took home 21.2% of the adjusted gross income share in the nation. That is up from 19% from 2004, and it also beats the previous high of 20.8% in 2000. These data came from a sample of tax returns and measure “adjusted gross income,” the amount of income left after certain deductions. The stats reveal a widening wealth gap, as the bottom 50% of earners brought in just 12.83%of the adjusted gross income share in 2005, a new low. That’s down slightly from 13.42% in 2004. Even in the year when the wealthiest Americans had the most money, the bottom half of earners accounted for 12.99% of the income share – now the second lowest amount in the 21 years the IRS has been tracking the data. On the other hand, the wealthiest Americans are also paying even more taxes than before: Their share reached a record high, jumping to 39.38% from 36.89% in 2004. Meanwhile, the bottom 50% of the returns covered 3.07% of all income tax, down from 3.30% in 2004.

Latest News

Survey finds many Americans don’t know their own net worth
Survey finds many Americans don’t know their own net worth

Three in four Americans can’t estimate their net worth without checking an app or account, according to a new Western & Southern survey.

Ameriprise boasts $1B AI spend as rivals race for tech leadership
Ameriprise boasts $1B AI spend as rivals race for tech leadership

Ameriprise's tech spending declaration lands amid a wider broker-dealer arms race, with Edward Jones, Raymond James and LPL all expanding AI tools for advisors

UBS nabs $1.3B Tampa advisory team from BofA
UBS nabs $1.3B Tampa advisory team from BofA

The four ultra-high-net-worth advisors from Bank of America Private Bank arrive as the Swiss lending giant continues to push deeper into US affluent banking.

Cetera taps veteran leader from Choreo to lead tax-focused CFS unit
Cetera taps veteran leader from Choreo to lead tax-focused CFS unit

Craig Bartlett brings more than 30 years of experience, including stripes from Creative Planning and UBS, as survey data point to a tax planning gap among US investors.

Public pensions still $1.13T short despite best funded status since 2009
Public pensions still $1.13T short despite best funded status since 2009

A record contribution burden and heavy AI exposure temper a milestone recovery for state and local retirement systems.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income