Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

  • Flying Squid@lemmy.world
    1·
    8 months ago

    You actually think if people worth $100 million getting taxed at 100% above that $100 million equals socialism or communism? Really?

    Either people have unlimited income or its communism?

      • Flying Squid@lemmy.world
        1·
        8 months ago

        It is in no way the same idea.

        Communism is about the workers controlling the means of production and distributing things according to people’s needs. This has zero to do with that.

        I mean it’s not a secret what communism is, so I don’t know why you don’t know what it is, but here-

        https://en.wikipedia.org/wiki/Communism

        Also, Karl Marx wrote extensively on the subject. Believe it or not, limiting upper income levels was not something he ever wrote about. Probably because that wouldn’t even be a thing in a communist society.