With the 2020 election cycle fast approaching, many Democratic candidates have been railing against the ultra-rich, arguing that wealth inequality is growing and now poses a threat to society. And a recent report from the National Bureau of Economic Research has found that wealth inequality has reached its highest point in nearly a hundred years.
In the lead up to the stock market crash in 1929, the top .1 percent of Americans owned roughly 25 percent of the nation’s wealth. When the Great Depression hit, stock markets were wiped out and the government dramatically increased taxes. By the end of the Depression, the top .1 percent owned “just” 10 percent of the nation’s wealth.
With the United States locked in the Cold War with the Soviet Union, taxes remained high. America also entered its fabled golden age, enjoying strong economic growth in manufacturing and services. For many years, America’s factories supplied the world and American businesses dominated the global economy.
By the late 1970s, the .1 percent owned just over 5 percent of America’s wealth. However, tax reform under the Reagan administration and the presidents thereafter greatly reduced the burden on the wealthy. Through the 1990s and into the 2000s, wealth inequality exploded. Now, the top .1 percent own roughly 20 percent of the nation’s wealth.
Many believe that recent tax cuts will only widen equality. And while the unemployment rate has dropped to near historic lows, millions of Americans are living paycheck to paycheck. If another recession were to hit, anyone laid off or who has their hours cut could find themselves in dire straights.
