The American Oligarchy: How Extreme Concentration of Wealth Skews Our Economy—and Our Democracy

Opinion · By Dexter Dow

The core claim

America has an oligarchy problem. Wealth and political influence have consolidated so tightly at the top that broad prosperity and majority preferences are routinely sidelined. That’s not a slogan; it’s what the best data says about income distribution, wealth concentration, and who actually shapes public policy. 

The long arc of inequality

Start with incomes. The Congressional Budget Office’s long-running series shows that since 1979, income growth has tilted heavily toward the top, even after taxes and transfers. CBO’s September 2024 report, covering 1979 to 2021, found that income grew for every quintile but increased most among households in the highest quintile. Pandemic transfers and taxes reduced inequality in 2021 “by almost as much as in 2020,” CBO found, “but income inequality increased nonetheless,” reaching its highest level after transfers and taxes since 2012 (CBO).

On market incomes (before taxes and transfers), the shift is starker. Using tax data, economist Emmanuel Saez estimates that the top 1% received 23.6% of total pretax income in 2022, down only from a record in 2021, and that top 1% families captured 81% of real income growth per family from 2019 to 2022.

From unequal paychecks to captured balance sheets

Inequality in wealth (what families own minus what they owe) is even more extreme than inequality in income (what families earn in a year). Federal Reserve Distributional Financial Accounts show the top 1% held 32.5% of all household net worth in the second quarter of 2026, roughly one-third, and the top 0.1% alone held 15.0%, the highest share since the series begins in 1989.

The Federal Reserve’s 2022 Survey of Consumer Finances shows the spread: median family net worth was $192,900 and mean net worth was $1,063,700, while the bottom quarter of families had a median net worth of $3,500. When asset prices surge—as they did in 2020–2023—the asset-rich pull further away. 

Zoom in on the ultra-rich: during the pandemic and its aftermath, U.S. billionaire wealth nearly doubled, rising 87.6% from $2.947 trillion on March 18, 2020, to $5.529 trillion on March 18, 2024, according to Institute for Policy Studies calculations of Forbes real-time billionaire data. Forbes figures are estimates, not audited accounts, but the size of the jump is hard to miss.

Market power, markups, and monopoly rents

Why has so much of national income migrated to capital owners? Part of the answer is market power. A broad empirical literature finds rising markups (prices over marginal cost) since about 1980, driven by the upper tail of firms with the most power. Higher markups mean profits accrue to owners rather than workers or consumers. In the best-known study, De Loecker, Eeckhout and Unger find that aggregate markups rose from 21% above marginal cost in 1980 to 61% by the end of their data, driven mainly by the upper tail of firms, while the median markup did not change.

Oligarchy isn’t just about money—it’s about power

The political science here is blunt. In a widely cited study of 1,779 policy issues from 1981 to 2002, Gilens and Page conclude that economic elites and business groups have substantial independent impacts on U.S. policy, while average citizens have “little or no” independent influence. You don’t need to love the paper to absorb its warning: concentrated wealth begets concentrated power. 

Campaign-finance jurisprudence has supercharged that dynamic. Citizens United v. FEC (2010) held that corporations and labor unions cannot be barred from making independent political expenditures, which widened the role of big money and “outside” spending in elections. The FEC’s case summary notes that the Court upheld disclaimer and disclosure requirements for that spending.

What changed for the median American?

A 2020 RAND working paper by Carter C. Price and Kathryn A. Edwards reframes the last half-century as a counterfactual: what if the post-war distribution of growth had merely held steady after 1975? Answer: workers below the 90th percentile would have taken home roughly $47 trillion more (1975–2018) than they actually did. That is a staggering drag on household security and aggregate demand. 

New Hampshire: a “high-income, high-inequality-after-taxes” paradox

New Hampshire’s median household income, $96,838 in 2023, was among the five highest in the nation, according to the Census Bureau. Its Gini index (a standard inequality measure from 0 to 1) was 0.445, below the national 0.483, so before taxes the state is less unequal than the country. Taxes change the picture. The Institute on Taxation and Economic Policy (ITEP) ranks New Hampshire’s state and local tax system the 18th most regressive in the country: the lowest-income fifth of Granite Staters pay 8.9% of their income in those taxes, the middle fifth 6.7%, and the top 1% 2.8%, thanks to heavy reliance on property and consumption taxes and the absence of a broad income tax. That’s how you get a prosperous state where the ladder’s bottom rungs still snap. 

Why this matters (beyond fairness)

Extreme concentration isn’t just morally itchy; it’s economically inefficient and politically destabilizing:

• Weaker transmission of growth: When income gains pool at the top, the marginal propensity to consume falls; growth depends more on asset prices than paychecks. Fed wealth data and SCF trends tell you who benefits when markets boom. 
• Rent extraction over innovation: Rising markups point to profits powered by market power, not pure productivity—an economy collecting tolls instead of building lanes. 
• Policy capture: The empirical link from money to policy outcomes is not hypothetical; it’s measured. 

What would bend the curve?

Practical, evidence-based moves exist. None is a silver bullet; together they’d dent oligarchic power and widen the gains from growth:

1. Tax the top effectively (not theatrically).
   • Enforce the tax code we already have: the Inflation Reduction Act’s IRS investments, as enacted in 2022, were projected to yield substantial revenue from high-income tax evasion; preserving enforcement capacity is a no-brainer.
   • Consider targeted surtaxes on very high incomes and reforms to capital income preferences; internationally, the OECD documents how post-tax redistribution differs across rich countries—ours is middling given our pre-tax inequality. 
2. Close wealth-shielding loopholes. End games like stepped-up basis abuse at death, lightly taxed pass-throughs that function as wage shelters, and dynasty-trust strategies that turn tax deferral into de facto exemption. (These are standard recommendations across inequality and tax-policy literature; IPS’s billionaire wealth work tracks the stakes.) 
3. Rebuild antitrust for the age of platforms and private equity. The markup literature signals where enforcement should focus: the upper tail of dominant firms. A modernized antitrust posture—merger scrutiny, interoperability mandates, and limits on anticompetitive roll-ups—aims directly at monopoly rents. 
4. Democratize political finance. Within the bounds of Citizens United, states and Congress can expand small-donor matching, require real-time disclosure of independent expenditures, and tighten coordination rules between campaigns and outside groups. The legal baseline is clear; the policy space is large. 
5. Wage and ownership ladders. Proven tools—tight labor markets, stronger wage floors, and sectoral bargaining—raise labor’s share. Pair that with broad-based asset building (auto-enrolled employee ownership, baby bonds, matched savings). The macro goal: more households with something to lose and to invest.
6. Fix New Hampshire’s regressivity. If we won’t adopt a broad income tax, we can still relieve bottom-quintile burdens: circuit-breaker credits against property taxes, renter credits, and a graduated real-estate transfer tax that asks more of eight-figure deals than starter homes. These are consistent with ITEP’s diagnosis of where the tilt lives. 

The bottom line

An economy where a thin slice of households claims a third of the wealth and growing policy sway is not a free-market Eden—it’s a rigged marketplace with a democratic façade. The remedy isn’t envy; it’s engineering: enforce the laws, restore competition, rebalance tax burdens, widen asset ownership, and detox our campaign-finance ecosystem. That’s how you turn an oligarchy back into a republic.

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Sources & further reading

• Income distribution: Congressional Budget Office, Trends in the Distribution of Household Income From 1979 to 2021 and The Distribution of Household Income in 2021 (September 2024).
• Top income shares: Emmanuel Saez, “Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2022 estimates)”, March 2024.
• Wealth concentration: Federal Reserve, Distributional Financial Accounts (top 1% and top 0.1% shares).
• Household wealth detail: Federal Reserve, Changes in U.S. Family Finances from 2019 to 2022 (Survey of Consumer Finances, October 2023).
• Market power: Jan De Loecker, Jan Eeckhout and Gabriel Unger, “The Rise of Market Power and the Macroeconomic Implications,” Quarterly Journal of Economics (2020).
• Democratic responsiveness: Martin Gilens and Benjamin I. Page, “Testing Theories of American Politics”, Perspectives on Politics (2014).
• Campaign finance baseline: Federal Election Commission, Citizens United v. FEC case summary.
• Billionaire wealth surge: Institute for Policy Studies, “U.S. Billionaire Wealth Is Up 88% Since the Pandemic” (March 2024), from Forbes data.
• Counterfactual income: Carter C. Price and Kathryn A. Edwards, “Trends in Income From 1975 to 2018”, RAND (2020).
• NH distribution & taxes: U.S. Census Bureau, Household Income in States and Metropolitan Areas: 2023; ITEP, Who Pays? New Hampshire (7th edition).

Related from Granite State Report: What Motivates the One Percent

Corrections: Granite State Report corrects verified errors promptly and appends a dated note identifying what changed and when. The corrections policy and the corrections register are public, and correction notes are never removed.