A Detailed Look At Global Wealth Distribution

Tyler Durden's picture

By now it should be common knowledge to everyone that in American society, the top wealthiest 1 percentile controls all the political power, holds half the wealth, and pays what is claimed to be the bulk of the taxes (despite mile wide tax loopholes and Swiss bank accounts). The rest of the population is merely filler, programmed to buy every latest self-cannibalizing iteration of the iPad/Pod while never again paying their mortgage and brainwashed to watch 2 hours of prime time TV commercials to keep it distracted from the fact that the last time America was a democracy was around the time the Wright brothers were arguing the pros and cons of frequent flier programs. So far so good. But what about the rest of the world? How is wealth stratified in a global perspective? Where do the "rich" live? What kind of wealth is controlled by various countries? Where are the Ultra High Net Worth people? For answers to all these questions, and much more, confirming that just like in America, the wealthiest 0.5% control over 35% of world wealth, Credit Suisse has compiled and released its latest "Global Wealth Report." The findings are summarized here.

The first figure shows world wealth by region. The US, with its wealth of about $50 trillion, accounts for 25% of total world wealth, which at last check was about $200 trillion. And yes, Europe as a region has a slightly greater wealth portion (32%) than does America (31%).

When it comes to geographic distribution, it is to be expected that North America will have the greatest proportion of people in the ultra wealthy category. Indeed, the chart below confirms this.

Drilling down into asset composition in various countries, it becomes obvious why the Fed is so focused on keeping the stock market high. With America being the wealthiest country in the world, and the bulk of US wealth held in financial assets, offset by a material amount of debt, which confirms that a deflationary spiral would be the end for the "wealth effect" so desired by Ben Bernanke. More from CS: "Consider first the relative importance of financial versus non-financial assets, and the size of debt. Expressed as a percentage of gross household assets, the pattern clearly differs markedly between poorer and richer countries and regions. In developing countries (see Figure 1), for example India and Indonesia, it is common for 80% or more of total assets to be held in the form of non-financial assets, largely housing and farms. A high proportion of real property is also evident in transition countries in Europe, reflecting in part the wholesale privatization of housing in the 1990s. As countries develop and grow, the importance of non-financial assets tends to decline, so that the share in China, for instance, is now close to half. In the richest countries, financial assets typically account for more than half of household wealth. There are interesting exceptions to this general pattern. Recent robust house price rises have propelled the share of non-financial assets above 60% in France and some other major European countries. South Africa, on the other hand, is an outlier in the developing world, with exceptionally high holdings of financial assets: the figure of 80% exceeds the share found in both the United States and Japan." In other words, the more "developed" the world becomes, the greater the amount of wealth tied into the perpetuation of the Ponzi lies. Small wonder why so few in charge are willing to actually do anything that changes the status quo.

Next, it is time to drill down in the specific composition of the financial assets.

Figure 2 provides more detail, showing the breakdown of financial assets into three categories: currency and deposits, equities (all shares and  other equities held directly by households), and other financial assets for selected countries. To add further detail, in most countries the  reserves of life insurance companies and pension funds form the largest component of “other financial assets.” The composition of financial assets differs considerably across countries, especially with regard to the importance of shares and other equities. One interesting trend we note is that equities are not always a large component of household financial wealth, even in countries with very active financial markets. In the United Kingdom and Japan, for example, equities account for just 13% and 9% of total financial assets respectively. In contrast, they make up 37% and 43% of financial assets in Sweden and the USA, respectively. Broadly speaking, the relative importance of currency and deposits falls as that of bonds and equities increases. On the other hand, the portfolio share of “other financial assets” does not vary a lot, staying in the range of about 40%–45%. However, when we come to the UK, Japan and Colombia, which have the lowest portfolio share of equities, the pattern breaks down. The UK has a moderate currency and deposits share, but the largest “other financial assets” share, reflecting large life insurance and pension reserves. Colombia also has more in the form of “other financial assets” than is typical. Japan, on the other hand, which has a strong tradition of saving in deposit form, has a very large currency and deposits share and only a 35% share of “other financial assets.”

An interesting detour looks at gender distribution for asset holders in the US and the UK. As the chart below shows, in the UK women appear to hold more risky assets than men.

Looking at the history of global wealth per adult, net worth peaked just before the first ponzi/credit/housing bubble popped, confirming that a major portion of the then-record $50K/adult net wealth was imaginary. Yet it may have far more to drop: as CS says, "despite the financial crisis, the past decade has in fact been a relatively benign period for household wealth accumulation. Global net worth per adult rose 43% from USD 30,700 in the year 2000 to USD 43,800 by mid-2010. Since the number of adults increased from 3.6 billion to 4.4 billion over this period, aggregate household wealth rose by 72%. One important factor here was the depreciation of the dollar against most major currencies, which accounts for part of the rise in dollar-denominated values, but average net worth still increased by 24% when exchange rates are held  constant." The next question is how much latent dollar devaluation has been accrued to this point and how much more is due to only gradually emerge.

The next chart is rather self-explanatory. The richest nations, with wealth in 2010 above USD 100,000 per adult, are found in North America,  Western Europe, and among the rich Asian-Pacific and Middle East countries. They are topped by Switzerland, Norway, Australia, Singapore and  France, each of which records wealth per adult above USD 250,000. Average wealth in other major economies such as the USA, Japan, the  United Kingdom and Canada also exceeds USD 200,000.

And some more detail on the various wealth regions:


Emerging wealth: The band of wealth from USD 25,000 to USD 100,000 covers many recent EU entrants (Poland, Hungary, Czech Republic,  Slovakia, Latvia, Lithuania, Estonia, Cyprus) and important Latin American countries (Mexico, Brazil, Chile), along with a number of Middle  Eastern nations (Lebanon, Saudi Arabia, Bahrain).

Frontier wealth: The main transition nations outside the EU, including China, Russia, Belarus, Georgia, Kazakhstan and Mongolia, fall in the USD 5,000 to USD 25,000 range, together with some of their Far East neighbors (Indonesia, Thailand) and most of Latin America (Colombia,  Ecuador, Peru, El Salvador). The group also contains a number of African nations at the southernmost tip (South Africa, Botswana, Namibia) and on the Mediterranean coast (Morocco, Algeria, Tunisia, Egypt).

Finally, the category below USD 5,000 comprises almost all of South Asia, including India, Pakistan, Bangladesh and Nepal, and almost all of Central and West Africa.

Next is a pie chart of with a detailed break down of wealth distribution by region.

Credit Suisse provides a look at geographic wealth distribution by decile:

To be among the wealthiest half of the world, an adult needs only USD 4,000 in assets, once debts have been subtracted. However, each adult requires more than USD 72,000 to belong to the top 10% of global wealth holders and more than USD 588,000 to be a member of the top  1%. The bottom half of the global population together possess less than 2% of global wealth, although wealth is growing fast for some members of this segment. In sharp contrast, the richest 10% own 83% of the world’s wealth, with the top 1% alone accounting for 43% of global assets. Figure 4 shows how the regions of the world are represented amongst the wealth deciles. Unsurprisingly for example, North America and Europe together make up the lion’s share of the top wealth decile (10%). China has relatively few representatives at the very top and bottom of the global wealth distribution, but dominates the middle section, supplying more than a third of those in deciles 4–8. The sizeable presence of China in the middle section reflects not only its population size and moderate average wealth level, but also relatively low wealth inequality. China’s position in the global picture has shifted upwards in the past decade as a consequence of a strong record of growth, rising  asset values and the appreciation of the renminbi relative to the US dollar. China already has more people in the top 10% of global wealth  holders than any country except for the USA, Japan and Germany, and is poised to overtake both Germany and Japan in the near future.

Next is the chart that everyone has seen as it pertains to America,
but few have seen in terms of the entire world. Per CS, Figure 1 shows
“The global wealth pyramid” in striking detail. It is made up of a solid
base of low wealth holders with upper tiers occupied by fewer and fewer
people. We estimate that 3 billion individuals – more than two thirds
of the global adult population – have wealth below USD 10,000. A further
billion adults (24% of the world population) are placed in the USD
10,000–100,000 range, leaving 358 million adults (8% of the world
population) with  assets above USD 100,000. Figures for mid-2010
indicate that 24.2 million adults are above the threshold for dollar
millionaires. While they make up less than 1% of the global adult
population, they own more than a third of global household wealth. More
specifically, individuals with wealth above USD 50 million are estimated
to number 81,000 worldwide.

Some more details on the various tiers of the pyramid:

Bottom of the pyramid

various tiers of the wealth pyramid have distinctive characteristics.
The base level is spread broadly across  countries. It has significant
membership in all regions of the world, and spans a wide variety of
family circumstances. The upper wealth limit of USD 10,000 is a modest
sum in developed countries, excluding almost all adults who own houses,
with or without a mortgage. Nevertheless, a surprisingly large number of
individuals in advanced countries have limited savings or other assets.

high proportion are young people with little opportunity or interest in
accumulating wealth. In fact, limited amounts of tangible assets 
combined with credit card debts and student loans lead many young people
to record negative net worth. In Denmark and Sweden, for example, 30%
of the population report negative wealth. This is an important and often
overlooked segment, not least in the context of the credit crisis.

wealth is also a common feature of older age groups, particularly for
those individuals suffering ill health and exposed to high medical
bills. In fact, the means testing applied to many state benefits,
especially contributions to the cost of residential homes, provides an
incentive to shed wealth. Nevertheless, relatively few people in rich
countries have net worth below USD 10,000 throughout their adult life.
In essence, membership of the base section of the global wealth pyramid
is a transient, lifecycle phenomenon for most citizens in the developed

The situation in low-income countries is different. More
than 90% of the adult population in India and Africa fall in this band;
in many low-income African countries, the fraction of the population is
close to 100%. However, the cost of living is usually much lower. For a
resident of India, for instance, assets of USD 10,000 would be
equivalent to about USD 30,000 to a resident of the United States. In
much of the  developing world, this is enough to own a house or land –
albeit possibly with uncertain property rights – and to have a
comfortable lifestyle by local standards.

Middle of the pyramid

billion adults in the USD 10,000–100,000 range form the middle class
from the perspective of global wealth. With USD 32 trillion in total
wealth, it certainly carries economic weight. This tier has the most
regionally balanced membership, although China now contributes almost a
third of the total. The wealth range would cover the median person over
most of his adult life in high income countries. In middle income
countries it would apply to a middle class person in middle age.
However, in low-income countries only those in the top decile qualify,
restricting membership to significant landowners, successful
businessmen, professionals and the like.

High segment of the pyramid

we consider the “high” segment of the wealth pyramid – the group of
adults whose net worth exceeds USD 100,000 – the regional composition 
begins to change. With almost 358 million adults worldwide, this group
is far from exclusive. But the typical member of the group is very
different in different parts of the world. In high income countries, the
threshold of USD 100,000 is well within the reach of middle-class
adults once careers have been established. In contrast, residents from
low-income countries would need to belong to the top percentile of
wealth holders, so only the exceptionally successful, well endowed or
well connected qualify.

The regional contrast shows up in the
fact that North America, Europe and the Asia-Pacific regions account for
92% of the global membership of the USD 100,000+ group, with Europe
alone home to 39% of the total. As far as individual countries are
concerned, the membership ranking depends on three factors: the
population size, the average wealth level, and wealth inequality within
the country. Only 15 countries host more than 1% of the global
membership. The USA comes top with 23% of the total. All three factors
reinforce each other in this instance: a large population combining with
high mean wealth and an unequal wealth distribution. Japan is a strong
runner-up, the only country at present to seriously  challenge the
hegemony of the USA in the global wealth ranking. Although its relative
position has declined since the year 2000 due to lackluster stock market
and housing market performance, Japan is still home to 15% of
individuals with wealth above USD 100,000.

Top of the pyramid

the top of the pyramid, we find the world’s millionaires, where we
again witness a slightly different pattern of membership. The proportion
of members from the United States rises sharply to 41%, and the share
of members from outside of the North America, Europe and Asia-Pacific
regions falls to just 6%. The relative positions of most countries move
downwards, but there are exceptions. The French share is estimated to
double to 9%, while Sweden and Switzerland are each now credited with
more than 1% of the global membership.

And next, is a detailed look at the very top of the pyramid: those individuals which have over 1 million in net worth.

To assemble details of the pattern of wealth holdings above USD 1 million requires a high degree of ingenuity. The usual sources of data – official statistics and sample surveys – become increasingly incomplete and unreliable at high wealth levels. A growing number of publications have followed the example of Forbes magazine by constructing “rich lists,” which attempt to value the assets of particular named individuals at the apex of the wealth pyramid. But very little is known about the global pattern of asset holdings in the high net worth (HNW – greater than USD 1 million) and ultra high net worth (UHNW – from USD 50 million upwards) range.

We bridge this gap by exploiting well-known statistical regularities in the top wealth tail. Using only data from traditional sources in the public  domain yields a pattern of global wealth holdings in the USD 250,000 to USD 5 million range, which, when projected onward, predicts about  1000 dollar billionaires for mid-2010. Although not exactly comparable, this number is very close to the figure of 1,011 billionaire holdings reported by Forbes magazine for February 2010. Making use of the regional affiliation recorded in rich lists allows us to merge the top tail  details with data on the level and distribution of wealth derived from traditional sources in order to generate a regional breakdown of HNW and UHNW individuals. At this time, we do not attempt to estimate the pattern of holdings across particular countries, except China and India which are treated as separate regions. However, as a rule of thumb, residents of the USA account for about 90% of the figure for North America.

The base of the wealth pyramid is occupied by people from all countries of the world at various stages of their lifecycle. In contrast, HNW and UHNW individuals are heavily concentrated in particular regions and countries, but the members tend to share a much more similar lifestyle,  often participating in the same global markets for high coupon consumption items. The wealth portfolios of individuals are also likely to be  similar, dominated by financial assets and, in particular, equity holdings in public companies traded in international markets. For these reasons, using official exchange rates to value assets is more appropriate, rather than using local price levels to compare wealth holdings.

Our figures for mid-2010 indicate that there were 24.5 million HNW individuals with wealth from USD 1 million to USD 50 million, of whom the vast majority (22 million) fall in the USD 1–5 million range. North America dominates the residence ranking, accounting for 11.1 million HNW individuals (45% of the total). Europe accounts for 7.8 million (31.7%) and 4.1 million reside in Asia-Pacific countries other than China and India. We estimate that there are now more than 800,000 HNW individuals in China, each worth between USD 1 million and USD 50 million (3.3% of the global total). India, Africa and Latin America together host the remaining 740,000 HNW individuals (3.0% of the total).

The take home message is that the wealthiest people in the world have the bulk of their wealth entrenched in the current system and any dramatic overhaul or reset of the status quo will be met by the stiff resistance of those who can summon fleet of jets, private armies, and even Fed chairmen on a whim. Whether anyone will have the wherewithal to confront the broken system under such conditions remains to be seen.

And for those seeing more granular detail by country, below are the profiles of the 15 or so wealhtiest countries.


h/t London Dude Trader

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Oracle of Kypseli's picture

Great beaches, nice houses, too many banditos.

Atomizer's picture

You can always hitch a chopper ride with a CONgress critter to Mt. Weather, VA. For safety that is.



TGR's picture

I would go for an outlying Indonesian island myself (there are between 17k-18k islands in Indonesia). Make sure it's on the southern side of the chain, exposed to the Indian ocean, and far enough away from the main islands in that any locals more or less survive in their own micro-economy.


onlooker's picture

""The Wright brothers were Wrong"" Yeah, they used warped wing engineering. ring any bells?

Occams Parsimony's picture

Don't count on it most of their assets are overseas, they were moved there in 2007 when the banks gave them the heads up.


buzzsaw99's picture

Averages are misleading. 40% of americans have close to zero or negative net worth.

snowball777's picture

Precisely. When the histo plot looks more like y=1/x reflected about the Y-axis and shifted right, you're well on your way to pseudo-aristocracy (ask Lindsay).

Kreditanstalt's picture

"Financial assets" seem to become of less real value during times when confidence in the governments and currencies weakens...

Spirit Of Truth's picture

Mammon worship is what's in at the end of this age.

Roomi's picture

Great post, thanks Tyler! It would also be interesting to see dynamics of Gini coefficient to present day to see by what margin the rich get richer and poor get poorer.

Endstrategy's picture

Has Zerohedge ever done a story about this topic, great escapes? Singapore is great, KL is cool. Any South American suggestions. Most of the internet searches I find are travel marketed crap. Do any of y'all have any escape plans in 3rd world countries? I think Zerohedge should have a whole story about this.

Bear's picture

You have a great handle for this topic ... I live on No Shore Oahu, plenty of military for marshal law and sea urchins to eat, I'm fat 

snowball777's picture

If I told you, it wouldn't be much of an escape plan, que no?

gwar5's picture

Escape plans? Escape from what? Gee, nobody around here did anything to need escaping....  Seriously, really you better fast it up. The doomsday clock is ticking down. It takes some time to make a transition like that and be organized enough to be happy and successful at it.

Singapore is not really third world, it's nice, but boring and expensive. Brazil is great and whatever you want it to be, most beautiful women, but getting more expensive --- Cabo Frio is along the coast from Rio and very nice coastal town to live. Thailand, Cambodia, nice; Vietnam never been, but all of them are getting the Chinese economic bounce for long term if you feel entrepeneurial. A friend of mine just packed it up and went to St Croix, VI last month after he and his wife visited there two months before for the first time, so there's another place, Caribbean, and it's great if you like boats and water and possible live aboards too. 

I have a buddy in Cost Rica 6 years, and up the coast from him I have a Pacific oceanfront in Nicaragua I bought 5 years ago. (Panama is great too). I also have a place in the North Carolina Mountains. I go back and forth winters/summers. Been doing that for the last several years. When I go South or North I already know people and have a support system which is essential. Nica and Tica girlfriends can't wait 'til you get back, right out of "The Bounty" with Mel Gibson.

Here's one: Rent or buy a foreclosure in USA, and let rooms out. Add reliable roomates that can pay (cash) rent a year in advance and add skills to the collective mix. It will then cost you nothing to always have a shack and not worry about utilites etc. It also then leaves you free to go international to exlore like Thailand/ Vietnam /Central America. Look for a places to hang with expatriates aleady established so you don't screw up.

Then here's another: Look for a happy overseas expatriate couple running a Bed and Breakfast. They're all over. They have the same spirit as you already. Pick a place you like and communicate afar with them via website email or Skype. They're usually friendly and helpful, they know the local people and happenings. Then go spend a month with one of them giving them good business while making freinds and exploring and networking through them to find paradise. They are usually proud of their choice for paradise and want you to be too.

Repeat until you find the place that's right for you. You'll know it when you see it. Do both of the above, you will always have to come back for something.


Bear's picture

This is some of the best advice I've seen on the topic, I'm going to package it and send to my friends, keep it up ... thanks gw

Endstrategy's picture

gwar, that was a really great answer.

I've been to all the SE Asian countries you mentioned. I need to make my way south and see how I like CR and Nicaragua.

I don't know if I need to escape, but I think there's going to be some civil unrest in the US. Shadowstats is showing around 20% under and unemployed, 6 million Americans get there last unemployment checks in a few weeks, people getting tossed out of homes left and right. I imagine there will be some pissed off people. Then when you factor in that we are probably in the early stages of a total economic disaster, it kind of makes sense to me to have some plan. Somewhere that I can stash some cash or gold, not have to worry about government interference, not have to worry about getting shot, beautiful women, peaceful place. Basically that sounds like somewhere not too connected to the broader global economy. CR is probably a pretty good spot, as is Thailand...

On another note, why are these CAPTCHA equations so complicated? WTF mate?

Mentaliusanything's picture

Vanuatu my boy, Vanuatu. Paradise found.The only place in the world you can leave a wallet at a table to take a piss, come back and met the lovely people who watched over it for you.  

Grand Supercycle's picture

S&P500 Financials index has not been bullish for some time. This is a warning.


Bear's picture

Then why have I lost so much being short?

Stuck on Zero's picture

Ever notice that tax rates max out at an income of about $100K?  From then on up to billions a year its all flat.  What a scam.  How come the tax rates don't continue on up the scale?  I guess it doesn't matter anyway.  A friend of mine runs tax avoidance schemes for the very, very rich.  They pay as little as 2-7% by offshoring and following the latest loopholes built in by the Congress they own.  Forget throwing tea in the harbor.  Throw Congress.

the rookie cynic's picture

The concentration of wealth has a lot to do with the debt-based fiat money system and taxes. Taxes and interest payments cycle upward and are concentrated at the top of the pyramid. 

If wealth concentrated in the hands of the productive, talented, or even the lucky, wouldn't you have a bell curve distribution and not a pyramid? Of course it depends on how you represent the data, but it seems to me that if there was a level playing field (of course there's not, I'm just hypothesizing), most of the wealth would be centered in middle quartiles. Right?

In the U.S. (depending on where you get the data) somewhere between 35-40% of the nation's wealth is held by the richest 1% of the population. Now I'm sure some of those rich people were really smart and worked their asses off to get where they are, but I venture to guess that uber-rich got there setting there snouts at the top of the tax and interest-payment supply chains and sucking.

It's an empire, not a republic.


Bear's picture

Real wealth IS created by the middle class that produce stuff, but as you say interest and taxes float to the top and either stay there to attract more taxes and wealth or are skimmed off just like some Vegas casino of old.

Incubus's picture

Yes, wealth is created by the middle class, but that wealth was never meant to remain in their hands.  I guess it's sort of like sheep-shearing: "wealth" is designed to be taken from the middle class when enough of it has been aggregated.  It's just another function of the middle class to complement the working-slaves of the lower income brackets. 


History has never been about the common man; rich men have always run the show and will continue to do so.  Whatever you've been told about freedoms and rights were only there to entice you to invest your effort into the pursuit of wealth aggregation for the elite.


cdskiller's picture

Again, may I just say, what would we do without you, Tyler? This is the only site that matters. Thanks to everyone, in fact. Truth will out, and we will all be better for it.

Bear's picture

Clever, witty, kowledgeable, insigtful, foward thinking, leading edge, and truth ... is that all we can get here?

Ferrari's picture

Perhaps we can't all get along, but it's really pleasant to see the esential questions get raised at Zero Hedge.

Ivar Kreuger's picture

I just finished Mike Davis' Planet of Slums, then I come here and see this. Thanks for always being fucking reverent Zero Hedge. Always engaged and leading the stories. Read Mike Davis for a look at the future, at the very least you will appreciate his prose.

BeeTee's picture

The buying power of $1 million is relative.  It buys less in the west than in China and thus, a chinese dollar millionaire wil be wealthier than a US dollar millionaire.

Consider this.  If I buy a pair of shoes, lunch and a bottle of milk, in the US I can expect to pay $100 (depending on the quality of the shoes!)  In China the same would cost only $10. 

The Chinese have a significant wealth multiplier affect.


snowball777's picture

a) Can't you buy the Chinese shoes too? (globalization, baby)

b) Are the shoes really of similar quality?

Mentaliusanything's picture

Interesting to note that the 'red zone' Countries are where the housing / share bubble was juiced the most. This may self correct. But it is nice to know I have a good view from high up in the pyramid ponzi.

chindit13's picture

I'm all for setting a cap on the maximum allowable wealth, just so long as it's twice my current net worth.

Seriously, how does a nation, or the planet, stop the drift of wealth toward the elite?  What constitutes fair?  Who determines fair?  With a total supposed wealth of $50 trillion, the average (not median or mode) American is worth a bit over $160K.  In the world, however, the average inhabitant has only a net worth of about $28K.  Anyone reading this who favors some sort of cap or redistribution to something constituting somebody's definition of fairness is going to take quite a lifestyle and standard of living hit if their druthers are implemented.

On a relative basis in this world, even an American whose net worth is below the planet's average probably lives far better than that $28,500 figure would indicate, so if sacrifice is called for, almost everybody in the US is going to pay.  Or do people prefer limiting caps and standards to within national borders?

Perhaps someone can comment on how things can be made more equitable, other than the obvious of not allowing ever again anything resembling TARP in all its forms.

snowball777's picture

I don't think you could realistically enforce the limits across national borders or that capping wealth is necessary (it's the frighteningly steep ratio between top and bottom that is at issue).

There's plenty of room between the status quo and 'fair' to be played with...e.g. getting our Gini coefficient from ~50 back to mid-30s (ala the mid 60s).

chopper read's picture

"capping wealth", as though possessing 'wealth' hurts other people.  funny.  very well-reasoned, snowball.  ha, ha. 

JR's picture

From The Tax Foundation: October 6, 2010

For the past few years, the IRS has also been presenting data on a small subset of the top 1 percent (AGI over $380,354), the top 0.1 percent (the top 10 percent of the top 1 percent).

In 2008, this top 0.1 percent filed 140,000 tax returns, reporting nearly 10 percent of all adjusted gross income earned and paying approximately 18.5 percent of the nation's federal individual income taxes. The average income for a tax return in the top 0.1 percent was $6.0 million in 2008, while the average amount of income tax paid was $1.36 million, indicating an average effective individual income tax rate of 22.7 percent. Both the income figures and tax figures for this group in 2008 were down significantly from 2007 levels.

[Note: This very top income group actually has a lower average effective income tax rate than the rest of the top 1 percent of returns because these extremely high-income returns are more likely to have income from capital gains and dividends, which are typically taxed at lower rates…]  (IOWs, Buffett pays 15% of his income to tax, while his secretary pays 30%.)


On the other hand, the nation’s middle class is being shrunk by the low-wage global labor pool.  Said Sally Kalson, a columnist for the Post-Gazette on September 26, 2010 :

“Increasingly, American companies are shipping jobs to destitute people overseas willing to work long hours for a fraction of what American workers need to get by.  The good jobs that used to pay the mortgage, grocery and doctor bills, with enough left to save for a vacation and the kids’ college funf, are outsourced to places like China (where a garment worker makes 86 cents an hour) and Cambodia (where the wage is 22 cents an hour).  Meanwhile, some 40 percent of employed Americans are working in service jobs, often very low paying.”