Rich Americans had a good 2025. Everyone else fell behind

NEW YORK – The share of total wealth held by the richest Americans is now at the highest level since World War II.

The top 1 per cent of households

controlled 31.7 per cent of America’s wealth

in the third quarter of 2025, according to Federal Reserve data. That amounted to US$55 trillion (S$70 trillion), nearly as much as the bottom 90 per cent combined.

Wealth inequality is on the rise after levelling off for several years in the late 2010s and early 2020s, the Fed estimates show. The main driver of the recent surge is three consecutive years of significant stock market gains.

While the affluent are more heavily exposed to stocks and other financial investments, the wealth of middle- and working-class families tends to be concentrated in their homes, whose values have lagged behind after a pandemic-era surge, according to Professor Moritz Kuhn, who teaches economics at the University of Mannheim.

“In effect, inequality has become a race between the housing market and the stock market,” said Prof Kuhn, who has studied US wealth disparities.

The richest of the rich have been driving the recent inequality rise. The top 0.1 per cent boosted their wealth 40 per cent in three years, Fed data show, twice the 20 per cent gain of the bottom 90 per cent.

The Fed estimates date back to 1989, and show both the top 1 per cent and top 0.1 per cent’s shares at an all-time record.

Less recently updated academic estimates covering the entire 20th century, including those of the World Inequality Database, suggest the last time the richest Americans controlled such a large share of US wealth was the mid-1940s.

Even among the super-wealthy, the latest gains are skewed to the very top. In 2025, the world’s 500 richest people added more than US$2 trillion to their collective net worth, according to the Bloomberg Billionaires Index. Since the beginning of this decade, their wealth has doubled to nearly US$12 trillion.

The five richest people in the world, all of them Americans, saw their fortunes jump an average of 31 per cent in 2025, versus 22 per cent for all 500 billionaires on the index. Mr Elon Musk, the world’s richest person, is worth US$668 billion, almost five times more than at the end of 2022.

Taxing the rich

Rising inequality has prompted a range of policy proposals across the United States that would

increase taxes on the wealthy

. One of the most notable is a California ballot initiative that would impose a one-time 5 per cent tax on the fortunes of billionaires in the state.

Economics Professor Emmanuel Saez, at the University of California, Berkeley, said he supports the levy and hopes the wealth tax represents a “turning point” for an era whose disparities he likens to the Gilded Age of the late 19th century.

“American democracy beat the first Gilded Age by finally cracking down on monopolies and great fortunes through monopoly regulation and progressive taxation,” he said.

Others in the state, including some progressive Democratic politicians, have warned the tax could backfire, by incentivising technology companies and their founders to leave California. And not all scholars agree that inequality is in itself always harmful.

“We’re likely to make more progress in living standards, democracy, opportunity, health, and happiness by pursuing these outcomes directly, rather than by hoping to achieve them indirectly via a reduction in income inequality or wealth inequality,” argued Professor Lane Kenworthy, who teaches sociology professor at the University of California, San Diego, in a recently published book Is Inequality The Problem? BLOOMBERG