In America, the wealth gap is turning into a chasm.
As the stock market and AI boom mint wave after wave of new millionaires, wealth is consolidating at the top more than ever. Across three quarters of last year, ultra-wealthy Americans in the top .1% and the super rich in the top 1% held onto their highest shares of wealth ever recorded.
Households in the top 1% increased their net worth by $1.8 million on average from between 2024 and early 2026, according to a new report from left-leaning think tank the Center for American Progress. Above that, the top .1% increased their wealth by $9.6 million. Meanwhile, the bottom 50% of households in the U.S. wealth distribution only added $1,200 in two years. By those numbers, the upper tier of rich Americans grew their wealth by 8,000 times more than any of the 68 million households in the bottom half.
In the U.S., the top 1% of taxpayers made $675,602 in adjusted gross income (income minus deductions) according to the most recent federal income tax data, which lags by a few years. Roughly 1,500 Americans reported over $78.6 million in adjusted gross income in the same time period, drawing from tax year 2023. But that only takes income into account, while high net worth individuals on average hold over 70% of their wealth in corporate stock and private business. People in the bottom half of the U.S. wealth distribution mostly hold theirs in real estate, i.e. the homes they live in.
K shaped economy
These numbers aren’t likely to come as a surprise for anyone living through them.
People in the lower half of the U.S. wealth distribution are struggling to make ends meet, even as high earners enjoy stratospheric wealth gains powered by their investments. That split in the American economic experience is known as the K-shaped economy, a term that reflects the phenomenon where the rich get richer and the poor get poorer.
Americans in the less fortunate part of the “K” are disproportionately impacted by inflation, which has spiked the cost of everyday necessities like food, gas, and other goods. Meanwhile, high-earners in the top of the “K” find themselves relatively insulated from the pain of inflation, protected by a large buffer of wealth, even as the things they buy cost more too. Rich Americans can absorb the cost, but high prices take a bigger bite out of a smaller monthly budget. Wealthy people can also lean on their investments, which may dip here and there, but have trended upward dramatically since 2020.
While comfortable wealth might feel unattainable to most Americans, the U.S. is churning out new millionaires. In 2024, every day roughly 1,000 people crossed the threshold of a $1 million net worth. The bad news is that inflation combined with wealth consolidation at the top means that $1 million doesn’t go as far as it once did, even if it’s still a meaningful psychological threshold.
In 2024, a family needed a net worth of $1.8 million to even crack the top 10% of the wealthiest households according to an economic insight report published last year. Given the flurry of wealth explosions from tech IPOs and ongoing stock market gains, the bar for American affluence has almost certainly gone far higher since then. If you’re not riding high on investments, you might be out in the cold for a while.
