Further figures demonstrate how and why the pandemic, and policy responses to it, have aggravated wealth and income equality across the US (and indeed, many other countries). No wonder tax policy is a hot issue, even if calls for big increases in rates on the "rich" can be misconceived.

Claims that America’s top entrepreneurs and income earners get an unfairly easy ride from the US tax code may be unjustified and based on faulty reasoning. However, the clamor for tax rises on high net worth individuals is unlikely to end soon.

A report in the Wall Street Journal (June 27), citing official statistics from bodies such as the US Federal Reserve, said that US households added $13.5 trillion in wealth during 2020, the largest increase in more than 30 years. The report also showed that many US citizens repaid debt, saved more and refinanced into cheaper mortgages.

It found that more than 70 per cent of the increase in household wealth went to the top 20 per cent of income earners, and about a third went to the top 1 per cent. And the report said that gains were even more heavily concentrated at the top when Americans were grouped by wealth instead of income. 

The report also notes that the pattern is decisively different from other economic downturns, such as US households losing $8 trillion in 2008-2009.

The data from the WSJ article also delves into the different impacts of lockdowns/COVID-19 on labor market behavior, real estate prices, and on specific business sectors, for example. It explains why economic inequality is unlikely to disappear as a hot-button issue for some time to come, and isn’t necessarily something that maps with conventional political lines. And it is hard to ignore the impact of the massive quantitative easing programs of the Fed, the low interest rates and government emergency measures. A big concern for wealth managers, and policymakers more broadly, is what happens if and when the days of ultra-loose monetary policy draw to an end.