Observations on Wealth-Income Inequality (from Federal Reserve Reports)

There’s a profound difference between assets that produce no income and those that produce net income.
To those of us nutty enough to pore over dozens of pages of data on wealth and income in the U. S., the Federal Reserve’s quarterly Z.1 reports and annual Survey of Consumer Finances (SCF) are treasure troves, as are I. R. S. tax and income reports.
Allow me to share a few observations on family wealth and income drawn from my review of these documents:
Changes in U. S. Family Finances from 2013 to 2016 (42 pages)
Financial Accounts of the United States (198 pages)
Corporate profits clock in at $2.135 trillion annually, around 11% of the nation’s GDP (gross domestic product). (Page 10 of Z.1) This has changed very little over the past few years; corporate profits totaled $2.140 trillion in 2014.
Most people who follow financial matters closely probably know corporate profits have been around $2 trillion annually for awhile.
But how many know that proprietors’ income from small businesses ($1.375 trillion) and rental income of persons–i.e. not corporations–($740 billion) together equal corporate profits? ($2.115 trillion for small biz/rentals, $2.135 trillion for corporate profits.

This post was published at Charles Hugh Smith on FRIDAY, OCTOBER 27, 2017.