Americans Are Horribly Misinformed About Who Has Money
Americans have a really distorted view of how wealth is distributed in this country.
This chart is from a paper called "Building a Better America One Wealth Quintile at a Time" by Dan Ariely and Michael I. Norton.
The top row shows the actual distribution of wealth in America. The richest 20 percent, represented by that blue line, has about 85 percent of the wealth. The next richest 20 percent, represented by that red line, has about 10 percent of the wealth. And the remaining three-fifths of America shares a tiny sliver of the country's wealth.
Below that, the "Estimated" rows show how different groups think wealth is distributed. As you can see, in people's misinformed minds things are much more equitable.
Matt Yglesias explains what's interesting here:
What’s interesting here is the extent to which the public vastly overestimates the prosperity of lower-income Americans. The public thinks the 4th quintile has more money than the median quintile actually has. And the public thinks the 5th quintile has vastly more wealth than it really has.
You can easily see how this could have a giant distorting effect on our politics. Poor Americans are simply much, much, much needier than people realize and this is naturally going to lead to an undue slighting of their interests.
Indeed. It's fine if reasonable people have different ideas about whether we should extend the Bush tax cuts for people making more than $250,000. Or disagree about the fairness of estate taxes. But when we have those debates, it's critical that everyone has a clear understanding of how things really are. We're becoming a plutocracy.