Why the shape of inequality matters

If you really want to understand inequality, don't just look at the rich. Look at the very richest.

The wealthy benefit from loopholes.
(Image credit: Laughing Stock/Corbis)

If you're looking for a glimpse into a completely different universe, go read this article in The New York Times. It's not science fiction. Rather, it's the economic, legal, and political landscape occupied by the richest of the richest: the top 400 earners in the country.

This is an intensely rarified community, where the income threshold for entrance is roughly $100 million annually. The article digs into an entire industry of lawyers, accountants, and lobbyists that has grown up around this small population, devoted to altering tax policy, exploiting byzantine loopholes, and negotiating with the Internal Revenue Service (IRS) on behalf of their clients, creating what amounts to a parallel tax system for the super wealthy. As a result, over the last two decades, the portion of their income those 400 pay in taxes dropped from 27 percent to 17 percent — just a hair higher than what families making $100,000 pay.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.