Who is the 1%?

[imagep]

The top 1% averages nearly $1.5 million in income, and you don't even make it into to top 1% unless you make a minimum of about $400k.

Attornies average $90k
Family Physicians average $120K
Engineers $80k
Medical Specialist about $400k
98% percent of all small businesses owners make less than $250k/yr.

None of those occupations seem to fall into the top 1%.

To exactly who are the top 1%?

I know that movie stars, pro athletes, and corporate executives make that type of money. So is one out of every 100 persons a movie star, pro athlete or corp executive?

I would think that freakie incomes would be reserved for people who have rare skills, but 1 out of 100 isn't exactly rare. Tomorrow I am going to a high school football game, I expect a crowed of about 10 thousand people (big game). In that crowed, the 1% is about 100 people. So will there really be 100 movie stars in the audiance (better bring my autograph book)? Will there really be 100 top corporate CEO's? What about entertainers? Can I expect 100 famous celebraties?

So if the 1% arn't doctors and lawyers and other reasonably common occupations, and if I cant expect 50 star professional athletes and 50 of our top actors to come to the high school football game, then who the heck are the 1% and how do they get their money?

 

[ReverendHellh0und]

I am the .0000000143%

 

[imagep]

I am the .0000000143%

So you are unique?

Me too. But I am not in the top .0000000143%

I think thats some guy in Mexico.

 

[Samhain]

The top 1% averages nearly $1.5 million in income.

Attornies average $90k
Family Physicians average $120K
Engineers $80k
Medical Specialist about $400k
98% percent of all small businesses owners make less than $250k/yr.

None of those occupations seem to fall into the top 1%.

To exactly who are the top 1%?

I know that movie stars, pro athletes, and corporate executives make that type of money. So is one out of every 100 persons a movie star, pro athlete or corp executive?

I would think that freakie incomes would be reserved for people who have rare skills, but 1 out of 100 isn't exactly rare. Tomorrow I am going to a high school football game, I expect a crowed of about 10 thousand people (big game). In that crowed, the 1% is about 100 people. So will there really be 100 movie stars in the audiance (better bring my autograph book)? Will there really be 100 top corporate CEO's? What about entertainers? Can I expect 100 famous celebraties?

So if the 1% arn't doctors and lawyers and other reasonably common occupations, and if I cant expect 50 star professional athletes and 50 of our top actors to come to the high school football game, then who the heck are the 1% and how do they get their money?

Your numbers are off tremendously.

There were 1.385 million taxpayers who's AGI put them in the top 1%. That top 1% averaged an AGI of $343,927.

 

[imagep]

Your numbers are off tremendously.

There were 1.385 million taxpayers who's AGI put them in the top 1%. That top 1% averaged an AGI of $343,927.

Do you have a link to that?

I am pretty sure that is not correct. Give me some time and I will post a link to where I got my estimates from. But from just a quick google search I did find this: Top 1 percent has nearly quadrupled income since 1979 - CSMonitor.com and here is a short quote from it:

Top 1 percent has nearly quadrupled income since 1979 - CSMonitor.com

That would indicate to me that the top 1% STARTED at around $347k (4 years ago), so obviously the average would be higher than the starting point.

 

[imagep]

Oh, and I just found this: http://www.nytimes.com/2007/03/29/business/29tax.html
and this: http://www.stateofworkingamerica.org/pages/interactive#/?start=1917&end=1918

 

[Mach]

I know what you mean, but think through this. I felt the same at one point, but it actually makes more sense than you present.

1. Taxes are based on household. Two high incomes in a single household make that far easier to hit the "top 1% tax filers" hurdle.

2. Your salaries are absurd. They are just like those wealth disparity statistics, and they look like an average or entry-level, neither of which tell anyone anything relevant. Just like those career day presenters at high school, bad information is bad. I was destroyed when I learned programmers only made $40K in high school.

3. Look up zip codes for average incomes for a particular area if it interests you. It is doubtful in a low income area that 1/100 will be top 1%, you know? And in some areas, nearly *everyone around you* will be in the top 1%.

4. And here is a hint, most people start off making a low income, and as they gain experience, their income goes...up. They change into managers or highly sought after specialists, they become partner, they start to establish their cilent base/customer base, etc. And over time, compound that, and you end up with executives, senior partners, booming practices, thriving business owners. Saying an engineer makes $80K average in your example looks to "remove engineers" from the picture. Yet I know engineers that as a household qualify for the top 1%, between bonus and dual income, or having started their own business in engineering after 15 years of industry, etc.

 

[OscarB63]

The top 1% averages nearly $1.5 million in income, and you don't even make it into to top 1% unless you make a minimum of about $400k.

Attornies average $90k
Family Physicians average $120K
Engineers $80k
Medical Specialist about $400k
98% percent of all small businesses owners make less than $250k/yr.

None of those occupations seem to fall into the top 1%.

To exactly who are the top 1%?

I know that movie stars, pro athletes, and corporate executives make that type of money. So is one out of every 100 persons a movie star, pro athlete or corp executive?

I would think that freakie incomes would be reserved for people who have rare skills, but 1 out of 100 isn't exactly rare. Tomorrow I am going to a high school football game, I expect a crowed of about 10 thousand people (big game). In that crowed, the 1% is about 100 people. So will there really be 100 movie stars in the audiance (better bring my autograph book)? Will there really be 100 top corporate CEO's? What about entertainers? Can I expect 100 famous celebraties?

So if the 1% arn't doctors and lawyers and other reasonably common occupations, and if I cant expect 50 star professional athletes and 50 of our top actors to come to the high school football game, then who the heck are the 1% and how do they get their money?

given that there are around 310 million people in the US, the top 1% would consist of about 3 million people. take the NFL as an example, the average NFL player salary is $1.9 million the median NFL player salary is $770,000. so they all qualify. consider that there are 32 teams and each team has a roster of 53 players. that's only 1696. if you throw in all the coaches and owners that's another 200 or so guys. so the NFL accounts for around 2000 of the 3.1 million in the top 1% and the NFL has the biggest team rosters.

I would imagine that if you counted all professional sports (and that includes X gamers and NASCAR and boxers, etc) you would get less than 50K people who make in the top 1%

look at your top big money entertainers, at most there are probably less that 20K who make the big top 1% money.

so the question is, just how many big dog CEOs or uber specialized doctors and lawyers are there that make $$$$$.

who makes up the rest of that 3.1 million of the top 1%

(FWIW: my baby brother is a pediatric cardio-thoracic surgeon, doesn't get much more specialized than that and he just barely makes it into the top 1% range)

 

[imagep]

given that there are around 310 million people in the US, the top 1% would consist of about 3 million people. take the NFL as an example, the average NFL player salary is $1.9 million the median NFL player salary is $770,000. so they all qualify. consider that there are 32 teams and each team has a roster of 53 players. that's only 1696. if you throw in all the coaches and owners that's another 200 or so guys. so the NFL accounts for around 2000 of the 3.1 million in the top 1% and the NFL has the biggest team rosters.

I would imagine that if you counted all professional sports (and that includes X gamers and NASCAR and boxers, etc) you would get less than 50K people who make in the top 1%

look at your top big money entertainers, at most there are probably less that 20K who make the big top 1% money.

so the question is, just how many big dog CEOs or uber specialized doctors and lawyers are there that make $$$$$.

who makes up the rest of that 3.1 million of the top 1%

(FWIW: my baby brother is a pediatric cardio-thoracic surgeon, doesn't get much more specialized than that and he just barely makes it into the top 1% range)

OK, we have accounted for 71,000 of the 3.1 million, so there is just 3,030,000 to go.

Actually Mach has a good point that a lot of those people arent really people, they are families that have two high incomes, in which neither income by itself would qualify, but combined they do. That brings me to the concept that there are probably no where near 3.1 million actual people who make that kind of jack. I assume that the 1% figure may actually be 1% of families, but as individuals they may not all make $400k or whatever the cutoff is, and children are probably counted in that 1% based upon their parents income. So maybe that top 1% is actually only like a million families combined incomes and not actually 3 million individuals making that much independantly. That would make the threshold of INDIVIUAL income to be in what we call the top 1% much lower.

That might explain or partially explain the descrepency between figures that I am finding on the internet and the figures that Maybe thats Samhan above quoted.

It's people like your brother who make this top 1% thing odd. If he is just barely in the top 1%, and if the top 1% is 3 million or even just 1 million people, it is somewhat befuddling how apparently common people of his rare skills are.

I just wonder how many of them were born into that kind of income. As in they inherited great wealth and recieve great incomes from that wealth. Maybe something like 25% or 50% or even 75% of the top 1% are simply in the high income due to inheritance class. I dunno.

 

[OscarB63]

I just wonder how many of them were born into that kind of income. As in they inherited great wealth and recieve great incomes from that wealth. Maybe something like 25% or 50% or even 75% of the top 1% are simply in the high income due to inheritance class. I dunno.

I would bet that the bulk of the top 1% would fall into that category. they were born rich and their "income" is actually returns on investments made by their parents/grandparents/etc

 

[conservativeguy]

I am the .0000000143%

Is that based on weight? :lol:

 

[Samhain]

Do you have a link to that?

I am pretty sure that is not correct. Give me some time and I will post a link to where I got my estimates from. But from just a quick google search I did find this: Top 1 percent has nearly quadrupled income since 1979 - CSMonitor.com and here is a short quote from it:

That would indicate to me that the top 1% STARTED at around $347k (4 years ago), so obviously the average would be higher than the starting point.

All numbers are tax year 2009, so about 16 mo old.

The Tax Foundation - Summary of Latest Federal Individual Income Tax Data

top 1% represents about 36% of total AGI. Top 50% represents 97% of total AGI.

My mistake on my 343k number, as thats the bottom of "top 1%".

Top 1% is 1,379,822 tax payers, who reported an AGI of 1,324,572,000,000(1.3 trillion), paid 318,043,000,000(318billion) in taxes. That means they have an average effective tax rate of 24%, but pay 36% of all income taxes.

Bottom 50%, which is 68 million tax payers, reported an AGI of 1,055,215,00,000(1.05trillion), paid 19,511,000,000(19billion) in taxes. That means they have an average effective tax rate of 1.85%, but pay 2.3% of all income taxes.

All figures are straight from the IRS.

Don't forget to check out the difference between 2007 and 2009 for the .01% who's AGI dropped by 50%.

 

[conservativeguy]

I would bet that the bulk of the top 1% would fall into that category. they were born rich and their "income" is actually returns on investments made by their parents/grandparents/etc

I don't think so. If a person was making $340,000 on their investments and the investments was yielding 3% into today's market, that person would need to have $11,333,333 in their portfolio.

For the OP, I will tell you where a lot of these people are.

1) small business owners

2) partners in large accounting firms. I was a partner in a Big 6 accounting firm and the average partner compensation was approximately $650,000 and we had over 1,200 partners. We also had hundreds of non-partners making over 340k.

3) lawyers with a large book of business. The first year lawyers in big firms are making 150k at the get go. Take two three-year partners that are married and you have a family with more than 340k coming in the door.

4) while the average comp per surgeon is close to $340,000, that means as much as half of all speciality surgeons are making more than 340k

5) there are a lot of duel income families that fall in that category, one person may be making 200k while the other spouse is making the same

6) the entire finance industry has a very large number of people making at least 340k

7) super star sales professionals can land in the top 1% during a great year

8) consultants working in firms like McKinsey, Bain, Cambridge Consulting, Navigant, etc. can easily be pulling in those dollars or a lot more

9) the entertainment industry is packed with folks making well over 340k

I could go on but I gave some examples.

 

[conservativeguy]

Don't forget to check out the difference between 2007 and 2009 for the .01% who's AGI dropped by 50%.

Here is another little dirty secret the income inequality folks fail to understand. The top 1% is not a monolithic crowd. People go into that group and fall out of it with surprising regularity. The super super rich in any given year is a constantly shifting group since entry into that category is often the result of a man selling his business and realizing a huge one year game. A business owner could sell his three franchises for $5m in one year and drop out of the top 1% the next year since he is living on his income which hypothetically could be $130,000 ($5m X 85% X 3% (return on his bond investments)).