To begin, it is critical to define what we mean by “INCOME”. Let us know ‘What Percentage Of The Population Earns More Than 400k?’.
What Percentage Of The Population Earns More Than 400k?
Income refers to the money earned or received by an individual, household, or business through various sources, such as wages, salaries, bonuses, interest, dividends, capital gains, and rental income. It is an important measure of an individual’s or household’s financial resources and is a key factor in determining their standard of living.
The distribution of wealth has become a significant topic of discussion in recent years, as income inequality continues to be a pressing issue. One key factor in determining income inequality is the percentage of the population who earns more than a certain amount. In the United States, earning over $400,000 per year is a significant threshold, as it is the income level at which the top marginal tax rate kicks in for single filers. In this article, we will explore the percentage of the population in the United States who earn over $400,000 per year, the implications of this concentration of wealth, and potential policy solutions to address income inequality.
Current state
The U.S. Census Bureau reports that the median household income in 2020 was $65,000. So, half of all households had incomes that were higher than this level, while the other half had incomes that were lower. Nonetheless, the income distribution is very skewed, with a tiny minority of households generating an excessively large proportion of the overall income.
- In fact, according to data from the Internal Revenue Service (IRS), only about 1% of households in the United States earn more than $400,000 per year. This translates to roughly 1.4 million households out of a total of 140 million households in the country. Despite being a small percentage, this indicates a substantial wealth concentration.
- To put policies in place that promote economic mobility, such as expanding access to education and job training programmes. By giving more people the opportunity to succeed and move up the income ladder, we can help to reduce the concentration of wealth and create a more equitable society.
- It’s likely that the discussion of wealth inequality in the US will last for a while. However, it’s clear that the percentage of the population who earns more than $400,000 is relatively small. So, who are these wealthy individuals, and how do they obtain their wealth?
Composition/Intensity
- The concentration of wealth also has important implications for tax policy. The $400,000 threshold is significant because it is the income level at which the top marginal tax rate kicks in for single filers in the United States. In 2021, the top marginal tax rate for single filers is 37%, which means that any income above $400,000 is subject to this tax rate. The joint filing threshold for married couples is $450,000.
- The concentration of wealth among a small segment of the population has important implications for society. The possibility of social and political instability is among the most significant. When a small group of people controls a large share of the wealth, they also have a disproportionate amount of power and influence. Those who feel left behind may feel unfairly treated and resentful as a result of this.
- Moreover, income inequality can have concentration effects on economic growth and development. When too much wealth is concentrated in too few hands, it can limit the overall purchasing power of the population. This, in turn, can limit the demand for goods and services, which can ultimately slow down economic growth.
Data
- According to data from the IRS, the majority of high earners are male. In 2018, 64% of tax filers who earned more than $400,000 were male. Additionally, the most common occupation among high earners is “executive, managerial, and financial,” which includes CEOs, investment bankers, and other high-level business executives. Doctors and other medical professionals come next, followed by dental and veterinary services.
- It’s interesting to note that high earnings are geographically concentrated throughout the United States. According to a study by the Economic Policy Institute, the top 1% of earners in the United States are concentrated in just a few metropolitan areas. In 2015, the New York City metro area alone accounted for 8.5% of all income earned by the top 1% of earners in the country. Boston, Los Angeles, and San Francisco are among the top metro areas for high earnings.
Conclusion
In conclusion, the percentage of people who earn more than $400,000 per year is relatively small, but the concentration of wealth among this group is significant. This concentration of wealth has important implications for society, including the potential for social and political instability, as well as negative effects on economic growth and development. There are several policy options that can be used to address this issue, including raising taxes on high earners and promoting greater economic mobility. We can make society more just and equitable by taking steps to alleviate economic disparity.
