I have been pestered, from several sources (including http://blogs.telegraph.co.uk/finance/ianmcowie/100008153/government-spending-review-tax-and-spend-explained-in-beer/), with a piece of analysis that supposes we can show the redistribution and taxation regime as represented by ten men paying for and drinking beer.
The distribution of income and wealth is a lot more concentrated than can be described by having 10% income bands all lumped together.
When it comes to making a contribution, wealth is as important as income. For example to be in the top 2% of the population who possess about 30% of the wealth of the country you need to have a net worth of about £0.5m. And that just the start of it.
Looking at it from an income perspective, the ‘almost top 9%’ (top 10% excluding the top 1%) earn an average of about £50k i.e. twice the total taxpayer average of about £25k. Whereas the top 1% earn an average of over £200k i.e. four times even that of the ‘almost top 9%’ and more than eight times the taxpayer average.
So, the ‘richest one of ten men’ is not a consistent concept or a useful average.
Just for completeness, the top 0.1% earns an average of £780k per year i.e. five times the income of even his closest mates in the rest of the top 1%.
And that’s only the stats…