THAT "TOP ONE PERCENT"
November 27, 2007
Americans in the top one percent, like Americans in most income brackets, are not there permanently, despite being talked about and written about as if they are an enduring "class," says Thomas Sowell, a senior fellow at the Hoover Institute.
At the highest income levels, people are especially likely to be transient:
- Recent data from the Internal Revenue Service show that more than half the people who were in the top one percent in 1996 were no longer there in 2005.
- Among the top one-hundredth of one percent, three-quarters of them were no longer there at the end of the decade.
These are not permanent classes but mostly people at current income levels reached by spikes in income that don't last, says Sowell.
Income spikes can occur for all sorts of reasons. In addition to selling homes in inflated housing markets like San Francisco, people can get sudden increases in income from inheritances, or from a gamble that pays off, whether in the stock market, the real estate market or Las Vegas, explains Sowell.
Most Americans in the top fifth, the bottom fifth, or any of the fifths in between, do not stay there for a whole decade, much less for life. And most certainly do not remain permanently in the top one percent or the top one-hundredth of one percent, says Sowell.
Source: Thomas Sowell, "That Top One Percent," TownHall.com, November 27, 2007.
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