Economic Inequality in the U.S.: Capital Gains For Wealthy Lead To Greater Gap Between Rich and Poor
A study released earlier this week found that the wealthiest 1 percent in the nation continue to get wealthier as the gap in income inequality substantially increased during the course of three decades.
Research done by the Economic Policy Institute revealed Wednesday that the richest citizens benefit from capital gains, stock dividends and interest developed from investments more than the bottom 99 percent.
It's easier for the wealthy to gain more money back from investment opportunities, such as stock-related gains, because they can simply invest more money that they already have, according to the Los Angeles Times.
The study suggested that the continuing trend would only widen the gap between the top 1 percent and bottom 99 percent.
"If the trend continues, the top 1 percent will continue to raise its income share as capital income grows in importance and their share of capital income continues to rise," the economic institute said.
According to the organization's data researched from the Congressional Budget Office, the capital income shares for the top 1 percent in 2010 reached to 54 percent, which increased from 33.5 percent in 1979.
In 1979, the three groups comprised of the bottom 90 percent, the top 1 percent and the 9 percent in between each had roughly similar shares as the bottom group claimed 36.2 percent while the 2-to-10 percent took 30.2 percent.
However, by 2010, the bottom 90 percent had a capital income share of 22.9 percent and the 9 percent in between had 23 percent.
Much of the research was derived from a point that French economist and author, Thomas Piketty, who specializes in income inequality, made in his book "Capital in the Twenty-First Century." He wrote that unregulated economic forces could create more opportunities for the rich to earn more money from their own wealth.
"This evidence indicates that Piketty's worries are justified by historical data as the top 1 percent has substantially increased the share of overall capital income that they claim," the economic institute said.