Interesting. Is that from windfalls like inheritances or big insurance payouts?

> inheritances

No, because this study analyzes historical tax filings, and inheritances are not counted as taxable income.

> big insurance payouts

On average, probably not, because big insurance payouts are (by definition) actuarial anomalies. They're tail-risk events.

I don't see how so many people can be in the top 5% unless selling your house counts as income and you are counting the econonic activity when someone sells the family home to downsize in their senior years. At any rate without an illustration of how the claims about income works in practice I don't know what to make of this article. Most people aren't going to spend a year as high level executives.

> Most people aren't going to spend a year as high level executives.

I think you might be over-estimating what it takes to be in the top 5%

Here are the numbers -> https://dqydj.com/income-percentile-calculator/

If you earn $170,000, you're in the top 5%. That's absolutely attainable within 5 years of graduating into a high-skill job.

That's also attainable within one's lifetime if they end up doing any sort of management or decision-making (as opposed to just manual labor all their lives).

It's my understanding that 170,000 per year is more than most managers will ever make in most parts of the country. However I can maybe see 170,000 making sense if it's based on household income and a household may have two manager class employees making 90,000 a year.

That said i'm still having a hard time believing the claim that a large number of households will have top 5% earnings. I'd love to see a blog post or something along those lines contexualizing that journal article.

Sure thing! I typically like to only link to primary source so as to avoid accusations of bias.

Here are some articles that summarize the primary source:

https://web.archive.org/web/20160327182251/https://taxfounda...

https://www.aei.org/carpe-diem/evidence-shows-significant-in...

Thanks. That first link makes more modest claims than the second one. They also appear to use different methodology (surveys vs tax returns). I appreciate the different links.