Update: What Characterizes the Top One Percent of Income Earners?

publication date: Dec 19, 2013
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Using its polling data over the past three years, Gallup has recently put together an interesting profile of the highest-income earning 1 percent of Americans who are defined as households earning $500,000 or more annually. These folks have been the target of the Occupy Wall Street protests and many political arguments alleging greater income inequalities. Here are the highlights of Gallup's findings:

  • One-third of the nation's "1%" identifies themselves as Republicans, 41% as independents, and 26% as Democrats. This is a mirror image of the "99%," a third of whom are Democrats, with 39% independents and a quarter Republicans.
  • Among the highest-income earners, 39% say their political views are conservative, 41% call themselves moderate, and 20% liberal, similar to the percentages seen among all others.
  • Education is the greatest difference between the wealthiest 1% of Americans and everyone else. 72% of the wealthiest Americans have a college degree, compared with 31% of those in the lower 99 percentiles. Furthermore, nearly half of those in the wealthiest group have postgraduate education, versus 16% of all others. Greater education is strongly correlated with household income.

My Thoughts


Gallup's findings aren't surprising on one level. Folks who invest in education (for example, going to medical school, business school, etc.) generally reap the rewards of a higher paycheck. Of course, there's no guarantee that simply getting more education will "pay off" financially.

It is fascinating that in terms of political ideology, the top 1% of income earners are nearly identical to the other 99%. If you haven't already done so, be sure to read the previous article I did on the composition of Americans' political ideology and how that has changed over the years.

Finally, it's worth noting the fact that the highest income earners work at many occupations (see graphic below). Just like folks who pay property taxes to the public school system yet send their kids to private schools, we should all be grateful for the highest income earners because they are paying the lion's share of taxes towards paying for government services used mostly by others. The income tax burden of the top one percent of income earners now exceeds the income taxes paid by the bottom 95 percent of taxpayers.


Percentage of primary taxpayers in top one percent of income by occupation

Occupation Percent
Executives, managers, supervisors (non-finance) 31
Medical 15.7
Financial professions, including management 13.9
Lawyers 8.4
Computer, math, engineering, technical (nonfinance) 4.6
Not working or deceased 4.3
Skilled sales (except finance or real estate) 4.2
Blue collar or miscellaneous service 3.8
Real estate 3.2
Business operations (nonfinance) 3
Entrepreneur not elsewhere classified 2.3
Professors and scientists 1.8
Arts, media, sports 1.6
Unknown 0.9
Government, teachers, social services 0.8
Farmers & ranchers 0.5
Pilots 0.2

Source: Jon Bakija of Williams College, Adam Cole of the Treasury Department and Bradley T. Heim of Indiana University




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Copyright Eric Tyson, 2008 - 2018 all rights reserved.

Eric Tyson is the only best-selling personal finance author who has an extensive background as an hourly-based financial advisor and who does not accept speaking fees, endorsement deals or fees of any type from companies in the financial services industry or product or service providers recommended in his articles, books and his publications.

 

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