The wealth gap between rich and poor in the U.S.—that financial disparity against which Occupy Wall Street protesters rallied two years ago as they coined the now omnipresent term “the 1%”—reached new extremes this week, MSN Money reports.
According to new analyses of I.R.S. data, the top 1% of taxpayers raked in a whopping 19.3% of the nation’s total household income in 2012. According to economists at the University of California at Berkeley, Oxford University and the Paris School of Economics, this figure broke the previous record of 18.7%, set in 1927 shortly before the stock market crash that spurred The Great Depression.
To add insult to injury, the report also noted that although the recession hurt the bottom lines of the very rich, 95% of gains in income reported since 2009 went to their wallets.
Emmanuel Saez, a researcher from UC Berkeley who was involved in the study, told MSN Money that these figures don’t just depict a bunch of languishing billionaires sitting around earning income from their investments. He suggests that these “superrich” maybe be less old money, more “working rich”—like tech genius David Karp, inventor of Tumblr as well as superstar bankers, cooks, architects and lawyers.
The record-setting boost, Saez says, could also be a result of the very wealthy cashing in stock to avoid new capital gains taxes.
Furthermore, he suggests that the income disparity might just be a temporary result of recent years’ economic turmoil. But he also says it’s time that we as a country make a decision about wealth inequality.
“We need to decide as a society whether this increase in income inequality is efficient and acceptable,” he told MSN Money, “and, if not, what mix of institutional and tax reforms should be developed to counter it.”