On Oct 19, 4:24*am, Home Guy wrote:
See also:

http://sociology.ucsc.edu/whorulesam...t_manager.html

The following is taken from that web-page:

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I sit in an interesting chair in the financial services industry. Our
clients largely fall into the top 1%, have a net worth of $5,000,000 or
above, and if working make over $300,000 per year. My observations on
the sources of their wealth and concerns come from my professional and
social activities within this group.

Available data isn't exact, but a family enters the top 1% or so today
with somewhere around $300k to $400k in pre-tax annual income and over
$1.2M in net worth. *Compared to the average American family with a
pre-tax income in the mid-$50k range and net worth around $120k, this
probably seems like a lot of money. *But, there are big differences
within that top 1%, with the wealth distribution highly skewed towards
the top 0.1%.

The Lower Half of the Top 1%

The 99th to 99.5th percentiles largely include physicians, attorneys,
upper middle management, and small business people who have done well.
On earned income in this group, we can figure somewhere around 25% to
30% of total pre-tax income will go to Federal, State, and Social
Security taxes, leaving them with around $250k to $300k post tax. *This
group makes extensive use of 401-k's, SEP-IRA's, Defined Benefit Plans,
and other retirement vehicles, which defer taxes until distribution
during retirement. *Typical would be yearly contributions in the $50k to
$100k range, leaving our elite working group with yearly cash flows of
$175k to $250k after taxes, or about $15k to $20k per month.

The net worth for this group is usually achieved after decades of
education, hard work, saving and investing as a professional or small
business person. *While an after-tax income of $175k to $250k and net
worth in the $1.2M to $1.8M range may seem like a lot of money to most
Americans, it doesn't really buy freedom from financial worry or access
to the true corridors of power and money. *That doesn't become frequent
until we reach the top 0.1%.

The Top Half of the Top 1%

Data on net worth distributions within the top 1% indicate that one
enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top
0.10% with $5.5M and the top 0.01% with $24.4M in net worth.

Unlike those in the lower half of the top 1%, those in the top half and,
particularly, top 0.1%, can often borrow for almost nothing, keep
profits and production overseas, hold personal assets in tax havens,
ride out down markets and economies, and influence legislation in the
U.S. *They have access to the very best in accounting firms, tax and
other attorneys, numerous consultants, private wealth managers, a
network of other wealthy and powerful friends, lucrative business
opportunities, and many other benefits. *Most of those in the bottom
half of the top 1% lack power and global flexibility and are essentially
well-compensated workhorses for the top 0.5%.

Membership in this elite group is likely to come from being involved in
some aspect of the financial services or banking industry, real estate
development involved with those industries, or government contracting.
Some hard working and clever physicians and attorneys can acquire as
much as $15M-$20M before retirement but they are rare. Those in the top
0.5% have incomes over $500k if working and a net worth over $1.8M if
retired. The higher we go up into the top 0.5% the more likely it is
that their wealth is in some way tied to the investment industry and
borrowed money than from personally selling goods or services or labor.

They are much more likely to have built their net worth from stock
options and capital gains in stocks and real estate and private business
sales, not from income which is taxed at a much higher rate. *These
opportunities are largely unavailable to the bottom 99.5%.

The picture is clear; entry into the top 0.5% and, particularly, the top
0.1% is usually the result of some association with the financial
industry and its creations. *I find it questionable as to whether the
majority in this group actually adds value or simply diverts value from
the US economy and business into its pockets and the pockets of the
uber-wealthy who hire them. *They are, of course, doing nothing illegal..

I could go on and on, but the bottom line is this: A highly complex set
of laws and exemptions from laws and taxes has been put in place by
those in the uppermost reaches of the U.S. financial system. *It allows
them to protect and increase their wealth and significantly affect the
U.S. political and legislative processes. They have real power and real
wealth. *Ordinary citizens in the bottom 99.9% are largely not aware of
these systems, do not understand how they work, are unlikely to
participate in them, and have little likelihood of entering the top
0.5%, much less the top 0.1%. *Moreover, those at the very top have no
incentive whatsoever for revealing or changing the rules.

That's the way any aristocracy rules. The velvet glove.