A new analysis from the nonpartisan RAND Corporation has revealed a staggering economic shift: since 1975, $79 trillion in wealth has been transferred from the bottom 90 percent of earners to the top 1 percent. This massive redistribution, driven by policies favoring corporations and the wealthy, has reshaped the American economy, creating one of the most extreme levels of income inequality in U.S. history.
The findings, published in a working paper by economist Carter Price, quantify the extent to which middle- and working-class Americans have lost income due to rising inequality. Had earnings growth remained more equitably distributed, as it was in the mid-20th century, the majority of workers would have collectively earned nearly $4 trillion more in 2023 alone.
Senator Bernie Sanders (I-Vt.), responding to the study, pointed to tax policies and corporate influence as major drivers of this wealth transfer.
“Over and over again, my Republican colleagues have expressed their deep concern about the redistribution of wealth in America, and they are right,” Sanders said. “The problem is that it has gone in precisely the wrong direction.”
The report arrives as congressional Republicans push for additional tax cuts for the wealthy, while proposing deep cuts to social programs such as Medicaid and food assistance. The implications of this study raise fundamental questions about how the U.S. economy has been structured to benefit the wealthiest few at the expense of the majority.
The RAND study paints a grim picture of wage stagnation for most Americans while the top 1% has seen exponential income growth. According to the report:
• Since 1975, the bottom 90 percent of earners have lost a total of $79 trillion in cumulative earnings due to income inequality.
• In 2023 alone, $3.9 trillion in wealth was redistributed from workers to the richest Americans.
• If wages had kept pace with pre-1975 trends, the average full-time worker in the bottom 90 percent would have earned an additional $32,000 last year.
• Median household income today would be double its current level if inequality had remained at 1975 levels.
While the U.S. economy has continued to grow, the benefits have overwhelmingly gone to the wealthiest Americans. Between 1975 and 2018, the top 1 percent saw their real incomes grow by 321.6 percent, nearly three times faster than the overall economic growth rate. Meanwhile, wages for the bottom 90 percent have remained largely stagnant, failing to reflect the rising productivity of the workforce.
Sanders, who has long advocated for economic reforms to address income inequality, warned that the nation is at a breaking point.
“The massive income and wealth inequality in America today is not only morally unjust, it is profoundly damaging to our democracy,” he said.
The RAND report aligns with a well-documented trend: starting in the late 1970s, U.S. economic policies increasingly favored corporations and the wealthy, leading to the greatest concentration of wealth in modern history.
Before 1975, income gains were more evenly distributed across the workforce. Wages grew in tandem with productivity, and corporate profits were shared more equitably through higher wages and benefits. But starting in the late 20th century, a series of policy changes fundamentally altered the balance of economic power.
One of the most significant shifts came in the 1980s under President Ronald Reagan, who slashed the top marginal income tax rate from 70 percent to 28 percent. This dramatically reduced the tax burden on the wealthiest Americans while corporate tax rates were lowered, leading to a rapid accumulation of wealth at the top.
Throughout the 1990s and 2000s, further tax cuts under Presidents George W. Bush and Donald Trump continued to benefit the wealthiest Americans, exacerbating inequality. The 2017 Trump tax cuts alone delivered an estimated $1.1 trillion in tax breaks to the top 1%, while providing little relief for middle- and low-income workers.
The decline of labor unions has played a critical role in suppressing wages for the majority of workers. In the 1950s and 1960s, union membership was high, and collective bargaining ensured that workers received a fair share of economic growth. However, anti-union policies and corporate lobbying efforts weakened labor protections, leading to lower wages and fewer benefits for millions of workers.
By 2019, the share of taxable income earned by the bottom 90 percent had fallen to below 47 percent—a dramatic decline from 67 percent in 1975. This shift reflects the growing economic power of corporations and the wealthy, who increasingly dictate wage structures and employment conditions.
The RAND study reveals how decades of pro-wealth policies have led to deep economic insecurity for the majority of Americans. As wages have stagnated, the cost of housing, healthcare, and education has skyrocketed, making it increasingly difficult for working families to stay afloat.
Despite the overwhelming evidence of growing economic inequality, House Republicans are advancing new tax cuts that would further benefit the wealthiest Americans. Last week, House GOP members passed a budget resolution paving the way for additional tax breaks while proposing deep cuts to Medicaid, housing assistance, and food programs.
“Given this reality, we cannot provide another $1.1 trillion tax break to the top 1 percent by making massive cuts to healthcare, housing, education and nutrition assistance as President Trump and Republicans in Congress want to do. We must do the exact opposite,” Sanders said.
The continued erosion of middle-class wealth has led to:
• A housing affordability crisis, with homeownership increasingly out of reach for many Americans.
• Rising healthcare costs, leaving millions burdened by medical debt.
• Student loan debt at record highs, making it harder for younger generations to achieve financial stability.
• Declining economic mobility, with many Americans earning less than their parents did at the same age.
Progressives argue that policy changes are necessary to reverse the growing wealth gap and ensure that economic growth benefits all Americans—not just the richest few. Proposals include:
• Raising the federal minimum wage to reflect inflation and productivity growth.
• Implementing a wealth tax on billionaires and closing tax loopholes that allow the ultra-rich to avoid paying their fair share.
• Strengthening labor protections to empower workers and restore collective bargaining rights.
As the 2024 elections approach, economic inequality remains one of the most pressing issues facing the country. The RAND study underscores how decades of policies have redistributed wealth upward, and without intervention, this trend is expected to continue.
The $79 trillion shift in wealth from the bottom 90% to the top 1% is not just an economic issue—it is a crisis with far-reaching social and political consequences. As Republicans push for further tax breaks for the wealthy while proposing cuts to essential programs, progressives argue that the country must choose between continuing policies that fuel inequality or implementing reforms to rebuild a fairer economy.
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