It's not necessarily limited to the ultra wealthy, but outside of a few key areas (as someone mentions, those profiting off of the inflationary spike, those in the real estate market, etc) it is more or less the case, yes.
The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.
This report is only about wages, so even if the ultra-wealthy reported their real sources of income, they wouldn’t shut up as “labor” the way this defines it.
Capital gains not being considered earned income is simply sensible use of terminology to categorize different ways of amassing purchasing power. For example, in order to carry out the linked analysis.
I used to think this - but when I talked to a tax lawyer friend and we walked through the steps they take, usually they're just deferring taxation that does end up getting paid by an entity eventually.
If they donate the wealth to their own foundation to continue to hold close and control, it doesn't get taxed. If they borrow against the wealth at low interest rates until they die and the basis is stepped up ("buy, borrow, die"), it doesn't get taxed. Certainly, deferment is a component, but there are obvious examples of the very wealthy operating in a manner to avoid taxes entirely when they're able to (realizing the benefit of the wealth without having to realize a taxable event). Trust stacking is a recent fad as well, although I don't have enough data to say whether it is a material concern from a tax revenue perspective.
im going to be controversial and say no one should have anything other than labor as their main income until they retire.
anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management is labor too.
if your income comes from a trust fund or owning properties that you dont manage thats a passive reward for doing nothing. you are not productive. you are a parasite living on the back of everyone else and expecting indefinite rewards for a fixed amount of work you or your parents did years ago.
Not American here. I know a couple of people who took out a second mortgage to buy a small appartement to rent out when mortgages rates were at 1%. They probably have €300k in equity in both the primary and secondary home. And around €600 in income from the rental. I do not consider that wealthy.
How do you know that you're not the one hanging around the "wrong people" to know better? You could just as easily be surrounding yourself with wealthy people as they could be with non-wealthy.
Without data, it just sounds like "my social circle is more indicative of reality than yours". Maybe it is! But maybe not, so it's not particularly convincing
I'm not the only one with access to data though, if you're wanting to hold to your beliefs unless someone does the legwork for you and attempts to force it on you, I think your bias will overcome. Here is a source to begin anyway.
The middle class (especially upper middle) saw their share of income drop, but the bottom 50% increased.
Bottom 50% is increasing income with the top 10%, it's the middle class that's declining in the last 5 years. This was a quick google search, so I'll ask you to provide a source that's contrary else your comment was purely rhetorical and made in bad faith.
There is but you have to ignore the lived reality that Americans are struggling to afford healthcare, housing, utilities, education, and food costs all while the ultra wealthy are demanding the public invests trillions into vaporware.
Not at all. The real estate share of income is probably at its highest among a lot of people who belong to the non-labouring class, but are far from ultra wealthy. But it's nice to have a scapegoat, isn't it?
If you belong to the 'non-laboring class' you are by definition the ultra wealthy. It's wild how much people are willing to slide goalposts to make themselves feel better.
It's not necessarily limited to the ultra wealthy, but outside of a few key areas (as someone mentions, those profiting off of the inflationary spike, those in the real estate market, etc) it is more or less the case, yes.
The annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.
This report is only about wages, so even if the ultra-wealthy reported their real sources of income, they wouldn’t shut up as “labor” the way this defines it.
Capital gains not being considered earned income is simply sensible use of terminology to categorize different ways of amassing purchasing power. For example, in order to carry out the linked analysis.
It has nothing to do with the IRS or taxes.
Income goes straight to a person, capital gains is a little return from other people generating income. Basically a MLM lol.
even with this scam the top 1% of earners still have more annual income than ~75% of the population
I used to think this - but when I talked to a tax lawyer friend and we walked through the steps they take, usually they're just deferring taxation that does end up getting paid by an entity eventually.
Capital gains tax is clearly lower than income tax. So why did you change your mind?
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If they donate the wealth to their own foundation to continue to hold close and control, it doesn't get taxed. If they borrow against the wealth at low interest rates until they die and the basis is stepped up ("buy, borrow, die"), it doesn't get taxed. Certainly, deferment is a component, but there are obvious examples of the very wealthy operating in a manner to avoid taxes entirely when they're able to (realizing the benefit of the wealth without having to realize a taxable event). Trust stacking is a recent fad as well, although I don't have enough data to say whether it is a material concern from a tax revenue perspective.
Silicon Valley Is Obsessed with 'Trust Stacking,' and the IRS Doesn't Like It - https://news.ycombinator.com/item?id=48727963 - June 2026
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Was your ‘friend’ Jeffery Epstein?
It’s not. There are plenty of non-wealthy people who make money from things other than their labor.
Small-time landlords are an example, as would be anyone who owns a small business and draws cash from profits rather than taking a salary.
im going to be controversial and say no one should have anything other than labor as their main income until they retire.
anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management is labor too.
if your income comes from a trust fund or owning properties that you dont manage thats a passive reward for doing nothing. you are not productive. you are a parasite living on the back of everyone else and expecting indefinite rewards for a fixed amount of work you or your parents did years ago.
What if you volunteer 30-40 hours a week but pay your bills with rental income? What's your position on that?
> non-wealthy
> landlord
If you think these two things are compatible you need to talk to more people outside of your bubble.
Not American here. I know a couple of people who took out a second mortgage to buy a small appartement to rent out when mortgages rates were at 1%. They probably have €300k in equity in both the primary and secondary home. And around €600 in income from the rental. I do not consider that wealthy.
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Most landlords are leveraged up to the hilt. They may look wealthy from the outside but a close look at the figures says otherwise.
The original comment said "ultra wealthy".
You don't have to be especially wealthy to own a second house and rent it out. That isn't poor, certainly, but I wouldn't call it wealthy either.
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How do you know that you're not the one hanging around the "wrong people" to know better? You could just as easily be surrounding yourself with wealthy people as they could be with non-wealthy.
Without data, it just sounds like "my social circle is more indicative of reality than yours". Maybe it is! But maybe not, so it's not particularly convincing
I'm not the only one with access to data though, if you're wanting to hold to your beliefs unless someone does the legwork for you and attempts to force it on you, I think your bias will overcome. Here is a source to begin anyway.
The middle class (especially upper middle) saw their share of income drop, but the bottom 50% increased.
https://equitablegrowth.org/u-s-income-data-for-2024-shows-t...
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Data is the answer, it's just that so few people are willing to look at unbiased data. Although the start is asking a more measurable question.
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Source for this statistically?
https://equitablegrowth.org/u-s-income-data-for-2024-shows-t...
Bottom 50% is increasing income with the top 10%, it's the middle class that's declining in the last 5 years. This was a quick google search, so I'll ask you to provide a source that's contrary else your comment was purely rhetorical and made in bad faith.
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There is but you have to ignore the lived reality that Americans are struggling to afford healthcare, housing, utilities, education, and food costs all while the ultra wealthy are demanding the public invests trillions into vaporware.
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Not at all. The real estate share of income is probably at its highest among a lot of people who belong to the non-labouring class, but are far from ultra wealthy. But it's nice to have a scapegoat, isn't it?
If you belong to the 'non-laboring class' you are by definition the ultra wealthy. It's wild how much people are willing to slide goalposts to make themselves feel better.
It hurts the definition of the words when you use ultra wealthy to refer to the top 50%...
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Ultra wealthy literally means "beyond wealthy". A double digit percentage of the population, maybe 30-50% belong to the non-laboring class.
If I was talking about "ultra obese" people, you wouldn't assume I was talking about everybody who has a couple of extra pounds?