online data from the U.S. government.
According the IRS, there were 2,196 people with a net worth of more than $1.5 million each in 2004, the most recent year for which data was available. Their combined net worth was $9.7 trillion. According to the 2004 edition of the CIA World Fact Book, the GDP of the United States in 2004 was $10.9 trillion. This works out to only about 88% of the GDP for the top seven percent of the population (using a census estimate of 308,745,538 Americans in 2004). This is a far cry from one percent controlling nine percent of the total American wealth. This is even assuming that all of the wealth of the top seven percent is in the United States when in reality much of it is probably international.
The census data also lists individuals with more than $1.5 million in net worth by state. The 2004 data reveals that Georgia was home to 56 of these high net worth individuals. Ironically, most of the states with the largest numbers of high net worth residents are blue states. Of the states that were home to more than 100 high net worth residents, three states, California, New York, and Illinois are reliably Democratic. One state, Florida, is a swing state, and one, Texas, is an established red state.
The statistic is harder to disprove when it is applied to the world at large because many countries simply do not generate reliable statistics. However, a World Bank poverty report from 2008 shows that poverty rates around the world have been falling since 1980. If the world's poor are getting richer, it would seem that they would also be controlling a larger share of the wealth. The report also shows that most of the world’s poor live in underdeveloped and authoritarian regions of the world, particularly Africa, central and southeast Asia, and the former Soviet bloc countries of Europe.
Similarly, in the United States the poverty rate has remained consistently between 12 and 15 percent for the past half century according to census data. In most cases, Americans do not stay in poverty. As the St. Louis Fed pointed out in a 2010 article, there is ample movement between income classes in the United States. Americans might be in poverty after graduating from college or while changing jobs or careers, then quickly move to an upper income bracket. Ironically, the U.S. poverty rate was at the highest level in 20 years as the Great Recession, slow economic growth, and high unemployment took their tolls.
The protesters at Occupy Wall Street, Occupy Atlanta, and the other encampments around the country also ignore an important fact: That the top one percent of income earners pays more than their share of taxes. According to IRS data from 2008, the most recent year available, the top one percent of income earners pays 38 percent of all income taxes. The top ten percent of earners pays 70 percent of all taxes. The bottom 50 percent of earners pay only three percent of taxes. By this measure, the U.S. tax system is one of the most progressive in the world.
If the occupiers believe that millionaires are the root of all that is wrong with America, then they should be encouraged by statistics reported in the Wall Street Journal on August 17, 2011. The number of millionaire tax filers declined by 39 percent from 2007 to 2009. The number of filers with more than $10 million declined by 55 percent. The tax contributions of these demographics declined accordingly as well as the recession hit the wealthy. There is some speculation that the number of millionaires may be on the rise as stock markets recover, however.
In the end, even if the one percent statistic is false or unverifiable, it is still a potent propaganda tool. It is easy to understand, easy to communicate, and ubiquitous. As one of the Occupy Atlanta activists put it, regardless of whether the statistic is verifiable or not, he believes it because it should be “obvious” from “what you see.”
As published on Examiner.com: