Occupy Wall Street has a famous slogan "we are the 99%", refering to the "fact" that 1% of the people in the US take nearly the quarter of the national income. However, this does not seem to consider that many people with extreme incomes have very variables revenues and have to borrow a lot from the private sector to finance their source of revenue, and that this revenue is unstable. Are there any studies/data confirming that the 1% that has nearly 25% of the national income is in fact nearly composed of the same people year after year? Any data that considers "permanent income" instead of "annual income"?
I've not see a strict analysis of the top one percent but I have seen an analysis of the top 400 tax payers, the very highest income taxpayers:
Who are the rich? It depends who you ask and when. Since 1992, the IRS has tracked the top 400 earners in terms of adjusted gross income—the so called fortunate 400. ... Most importantly, this IRS report demonstrates there is a lot of income mobility at the top. Of all the filers who have made the list since 1992, 73 percent were on the list just once. Virtually no one remains on the list for all 18 years, but for privacy concerns the IRS did not report exactly how many did, if any. In last year’s report, just 4 people remained on the list for all 17 years. This suggests that most top earners do not have a portfolio of big investments that can be cashed in year after year, but rather one big asset, such as a family farm or business or stock, the sale of which triggers a capital gain.
A slightly more targeted answer:
Considering those whose information was found in both years, approximately half of taxpayers in the lowest and highest income quintiles remained in the same quintiles 20 years later. Nearly one-fourth of those in the bottom quintile moved up one quintile, while 4.7 percent moved to the top quintile. About one-fourth of those in the top 1 percent were also in the top 1 percent 20 years later, but nearly 70 percent remained in the top income decile. The overall results suggest that, while there is considerable persistence among observed taxpayers, there is also meaningful movement even within this narrow age cohort. Some taxpayers start from the bottom and move to the top and vice versa.
NEW PERSPECTIVES ON INCOME MOBILITY AND INEQUALITY Gerald Auten, Geoffrey Gee, and Nicholas Turner (2013)
To answer the question: Yes, the 1% is relatively stable. From The Economist:
Membership in America's 1% is relatively stable; three-quarters of the households in the percentile one year will still be there the next.
Also your "belief" that the vast majority of the income that the 1% receive is variable, from borrowing, etc, isn't actually true.
The richest 1% earn roughly half their income from wages and salaries, a quarter from self-employment and business income, and the remainder from interest, dividends, capital gains and rent.
So half isn't variable at all, a quarter is slightly variable and, a quarter isn't all that variable, but is subject to market shocks.
And that isn't even getting into whether or not this question has any relevance. There's two big problems with your question:
- Is income even the stat we should be looking at?
The wealth gap, as measured by net worth, is much more extreme than the chasm as measured by income.
The Times had estimated the threshold for being in the top 1 percent in household income at about \$380,000 dollars. That is 7.5 times median household income. But for net worth, the 1 percent threshold for net worth in the Fed data was nearly \$8.4 million dollars, or 69 times the median household’s net holdings of \$121,000. source
The government goes after income more than it goes after wealth. For example, you can live in a \$8 million mansion and get Universal Healthcare subsidies if you make less than ~$94,000 a year with a family of four.source
At the end of the day, when Bill Gates retired from Microsoft, he wasn't suddenly poor. If you think there is a problem with wealth inequality, looking at income isn't a great way to find out if you are right or not.
- If there are socio-economic problems cause be income inequality, how does the fact* that the faces of the ultra rich change factor into those problems? Does it factor into it at all?
If there's 5 people, with enough food for 5 people and person 1 eats it all today. Tomorrow person 1 leaves and a new guy comes in. He eats all of today's food. When the 4 people sitting there starving start complaining that the share of the food is unequal and that they are starving, what does it matter that it wasn't the same guy who ate it all twice in a row? The problem here is the inequality itself not who is getting the unequal treatment.
*Not actually a fact. Data shows this is the opposite of a fact.