Upper middle-class families are feeling the pinch. New Fed data suggests everyone is slipping – except the tippy tippy top.
The costs of college, property tax, cars and other services and products upper-middle class families buy are outpacing inflation and pay raises.
Concomitantly, equity ownership has been sliding for these households. For families in the 50th to 90th percentile of net worth, equity ownership has dropped dramatically. Peaking at 23% in 1990, by end 2018 these families owned less than 13% of corporate equities and mutual fund shares.
According to Fed data most of this wealth transferred to the top 1% of households.
On this lovely tax day it is worth noting the most wealthy are getting the best breaks with Trump’s tax cuts too.
Besides changes to the estate tax that benefit the wealthiest, the top fifth of tax payers - families earning more than $350K/year - will have an average -3% reduction to their 2018 taxes.
For comparison the poorest taxpayer - making less than $14K/year - will see a tax reduction of less than -½ of 1%.
Weekly Update, Week ending April 12, 2019 The S&P 500 was up 56bps even as the Dow Jones lost -3bps, the Russell 2000 increased 16bps and the Nasdaq added 58bps.
As for US bonds, they lost -12bps.
Globally, the MSCI World Index added 50bps and the Barclays Global Aggregate Bond Index increased 16bps.
The Euro Stoxx 50 added 9bps in local-currency (Euro) and 84bps in USD. Meanwhile, the Topix was down -1.25% in local-currency (Yen) and -1.52% in USD.
