Midday Report: Recovery From Recession? Only for Top 7 Percent

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The wealth gap is turning into a sinkhole for most people: A new report from the Pew Research Center finds the rich are indeed getting richer, while the rest of us are struggling to keep our heads above water.

If your household net worth tops $500,000, you've probably done really well in the two years after the recession ended in 2009. That accounts for about 7 percent of the population.

But for the other 93 percent, it's as if the recession never ended.

Jeff Hutchens, Getty Images
Pew analyzed data from the Census Bureau to determine that the wealth gap kept widening. Overall, household wealth rose by 14 percent from 2009 through 2011.

But the upper 7 percent captured all of those gains. In fact, the wealth of the other 93 percent actually fell by four percent, even though the economy was recovering.

Here's the big difference between the haves and have nots: The affluent are heavily invested in stocks and bonds, but the rest of us are not. And those assets soared in value after the Great Recession ended.

In general, people in less affluent groups have more of their money tied up in their homes – which continued to lose value – and in savings that pay interest. And interest rates have been hovering near all-time lows. And it doesn't look as though this trend is about to change any time soon.

In fact, the author of a Brookings Institution report last month said the long-term trend of growing inequality in America is becoming permanent.

That's one reason why President Obama's budget plan proposes tax hikes that would fall most heavily on very high income households.

About 60 percent of the $800 million in new taxes would come from taxpayers making more than $1 million. Lower income earners would pay more mostly through higher cigarette taxes and a change in the way cost of living adjustments to Social Security and other programs are calculated.

Bottom line: the wealth gap keeps growing.

–Produced by Drew Trachtenberg

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donut999

This could be debated forever, but it is hard to deny the "trend" is those with the gold continue to accumulate more. Has been this way forever and will be this way forever. Nothing really wrong with that, and even if there is, it is reality. The problem rears its' ugly head when those without gold do not participate even on a minor basis, or actually head down the ladder. There is a tolerance factor for the rich getting richer. There is not a tolerance for the rest of population getting poorer.

April 24 2013 at 6:28 PM Report abuse rate up rate down Reply
setanta54s_back

oooooooh please as their RELENTLESS DRUMBEAT OF CLASS WARFARE CONTINUES !
eh ? remember that 1 ? their daily usage of that RELENTLESS DRUMBEAT OF WAR !
well their bs continues unabated.

April 24 2013 at 5:52 PM Report abuse -1 rate up rate down Reply
anthdif

The rich already pay higher taxes in capital gains. What this article is referring to is the increasedd wealth on paper. That wealth is not taxable until such time as the owner cashes in on the gain from his/her investment. So taxing people at a higher rate because they wisely invest their money, in which they don't realize the gain until they take a taxable event and pay a higher rate of tax accomplishes exactly Obama's intended consequence. The fact that other people, even if it is 93% that don't invest in the stock market, a figure that I am certain is wrong because it doens't factor in 401k's and other retirement accounts, it doesn't warrant taxing them at a higher rate when they already pay a higher rate on those gains. The new tax rate jumps from 15% to 20% for the over 450000 mak. That is on long term capital gains. Short term capital gains is taxed at normal tax rate which increases to 39+ percent in the new tax system

April 24 2013 at 5:48 PM Report abuse -1 rate up rate down Reply
COMMON SENSE

No Problem. Obama is Bankrupting America. Keep on Printing that Money and Borrowing from China.

April 24 2013 at 5:46 PM Report abuse rate up rate down Reply
1 reply to COMMON SENSE's comment
donut999

No need to debate the "money printing" issue even though it is not physical, same result, but spread the blame if you want to play the blame game. After Tarp, aig, bs, etc., there was a quiet agreement among all the players that money cost had to be kept more or less at zero for the banks and other financials to dig out of the hole they were in. It was not a left, right or fed initiative, but a joint plan by all. They do not talk about, do not want to talk about it. It is time to put on the brakes. The banks and others rarely go to the window, instead they get their more or less free money on the backs of depositors who they pay nothing to kick in the groin returns. Our government is toting the note so to speak for a song. Can you imagine toting this note at 3-5%?

April 24 2013 at 6:38 PM Report abuse rate up rate down Reply
z4rock

Dianne Feinstein

April 24 2013 at 4:50 PM Report abuse rate up rate down Reply
oldupser

If you think the wealthy will pay the taxes and not the rest you are really foolish. Just take a look at what you now pay more for. Sales tax, property tax, luxury tax, telephone tax and the list goes on. Meanwhile the rich are avoiding paying more with big loopholes. You are really follish to fall for the liberal back door stealing of your money.,

April 24 2013 at 12:21 PM Report abuse +1 rate up rate down Reply
1 reply to oldupser's comment
joethightwad

All the taxes you mentioned are state and local taxes and user fees. The wealthy pay them too. The President's proposed changes address federal income tax rates and deductions.

April 24 2013 at 2:55 PM Report abuse rate up rate down Reply
joey

More Liberal crap

April 24 2013 at 12:11 PM Report abuse -4 rate up rate down Reply