Top Wealth in America: New Estimates Under Heterogeneous Returns*.

This article presents new estimates of wealth concentration and composition in the United States using administrative tax data linked to sources of capital income and novel methods to capture return heterogeneity within asset classes. It finds that the top 0.1%, 0.01%, and 0.001% wealth shares increased substantially from 1989 to 2016, reaching 15.7%, 7.1%, and 3.2%, respectively, with wealth inequality remaining high and rising over recent decades. The study highlights that the wealthiest individuals earn significantly higher returns on fixed-income assets—about 3.5 times the average—due to greater exposure to higher-yield, riskier fixed-income sources, and that pass-through business and C-corporation equity constitute the largest components of top wealth, while pensions and housing dominate wealth for the bottom 90%. The authors also develop refined valuation methods for private businesses, pensions, and housing, and demonstrate that accounting for return heterogeneity modestly adjusts but does not overturn prior estimates of top wealth concentration. These findings have implications for understanding wealth inequality, capital tax policy, and savings behavior, emphasizing the importance of entrepreneurs and stockholders in wealth accumulation.