How we got here · Wealth
Where did the gains from growth go?
Concentration, taxes, assets vs. wages
Timeline · newest first
2010s–21Market
Low rates and asset boom
Post-crisis and pandemic-era easy money lift stocks, housing, and private assets. Households that already own capital pull away from those who mainly earn wages.
2001 / 2003 / 2017Law
Top-end tax cuts (and partial sunsets)
Early-2000s and 2017 tax changes lower rates for high earners and capital in various ways. Debates rage over growth effects vs. distributional effects.
1980s→Market
Capital income and top 1% share rise
A larger share of national income accrues to the top of the distribution — via executive pay, capital gains, and pass-through businesses — while wealth concentrates in housing and financial assets.
Nuance Measurement fights are real (tax data vs. surveys, unrealized gains). Direction of rising top shares since ~1980 is the robust finding.
1945–1970sMarket
Postwar compression — the “great leveling” decades
High top tax rates, strong unions, and broad wage growth coincide with relatively lower inequality by later standards. This is the baseline people mean by “the middle-class century.”
1913 / 1916Law
Modern income tax and estate tax
The 16th Amendment enables a permanent federal income tax; estate taxation follows. Progressive taxation becomes the main peacetime tool for taxing large fortunes — always contested.
What people disagree about
- How much rising top wealth is “skill and innovation” vs. “rents and policy.”
- Whether taxing unrealized gains or wealth is workable — or whether the real levers are wages, housing, and antitrust.
Where we are now
Wealth is mostly assets, not paystubs. Rates, housing, and who owns the index funds matter as much as the income-tax rate on a W-2.
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