The richest 1 percent of New Yorkers received one-third of all city personal income in 2009, almost twice the share prevailing nationally, according to a new report.
“Such a wide income gap has financial consequences for the city,” said city Comptroller John Liu, whose office conducted the survey.
“Income inequality can weaken or destabilize the local tax base, reinforce patterns of racial and economic segregation and undermine the vibrant social, cultural and economic mix that is the foundation of New York City’s identity,” Liu said. “It also threatens the very fragile economic recovery that we are now experiencing.”
The study found that city tax filers in the top 1 percent accounted for 32.5 percent of the city’s entire reported income in 2009, based on the most recent micro-data available from the state Department of Taxation and Finance.
By comparison, the top 1 percent across the nation accounted for 16.9 of income, the report said.
The report showed that the income gap is further highlighted by the concentration of income among the wealthiest. The most affluent 15,000 city households — the top 0.5 percent of tax filers — took in 26.7 percent of income in the city. The top 2,000 households — the top 0.5 percent of tax filers — accounted for 18.9 percent of all income in the city.
The top 1 percent of earners ended the past decade with an average income of $2.2 million, the same level at which they started in 2000. This reflected the volatile nature of investment income earned by the ultra-wealthy.
But the gains made by these top filers in the boom years from 2003-07 show the speed with which income disparity grew in the city, the report said.
In the boom years, New Yorkers in the 99 percent of income earners experienced slow gains that raised their average annual income from $41,000 to $50,000. At the same period, the income of the top 1 percent shot skyward, more than doubling from $1.5 million to $3.9 million.
“We must not repeat the pattern of the last decade when a few gathered enormous wealth, while the vast majority of New York families were left behind or saw very modest gains,” Liu said.
“Economists have offered a variety of explanations for the polarization of incomes,” the survey said. “Among these explanations are globalization and immigration, the decline of labor unions, increasing demand for specialized skills and higher education, the rise of ‘superstar’ economy and changes in executive compensation practices,” the survey said. “Evaluation of the evidence for and against each of those theories is beyond the scope of this research report.”
The survey examined tax filings from the city on income earned for the period from 2000-09 with the figures adjusted for inflation.
Liu, the city’s top financial officer and former chairman of the City Council Transportation Committee, is expected to run for mayor.
Reach contributing writer Philip Newman by e-mail at firstname.lastname@example.org or phone at 718-260-4536.
©2012 Community News Group
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