Millionaires' Income Soars in 2021: A Fresh Look
Substantial rise in the count of prosperous individuals, defined as millionaires, reported during the year 2021. - Rapid growth in the number of millionaire earners observed during 2021
Hey there! Let's talk about how the income of millionaires in 2021 took a leap.
Last year, the average income of millionaires stood at a staggering 2.8 million euros, according to the statistical office, marking a substantial increase of 200,000 euros from the previous year. After accounting for inflation, this figure is 12% higher compared to 2020, surpassing the average inflation-adjusted increase of 6% between 2010 and 2021.
Why the rise? Pandemic-induced special effects likely played a part, as revealed by the statisticians.
Now, you might be wondering where this cash is coming from. Here's the breakdown: Around 60% of these millionaires made their dough through business operations, 19% from predominantly non-self-employed work, and 15% from self-employed endeavors.
In 2021, approximately 134,000 taxpayers paid the top tax rate of 45%. This bracket applied to individuals who earned at least 274,613 euros individually or a combined 549,226 euros.
The data source? The 2021 wage and income tax statistics, provided by none other than the Federal Statistical Office. It's important to note that these figures generally become available about three and a half years after the end of the tax year.
Now, here's a food-for-thought tidbit. The escalating income of millionaires often coincides with an increase in poverty. Bettina Kohlrausch, the scientific director of the Institute for Economic and Social Research at the Hans Böckler Foundation, points this out, stating that this pattern raises valid concerns among Germans regarding social inequalities. She argues that this perception fuels dissent against the democratic order, denoting that economic disparities call for careful consideration.
Interested in learning more about the long-term trends in the rise of income millionaires in Germany? Let's dive into the details of how the number of these high-income earners has evolved over the past decade.
From 2010 to 2021: An Overview
The number of income millionaires in Germany has seen a substantial increase from 2010 to 2021, with approximately 34,500 individuals boasting incomes of at least one million euros. This figure represents an increase from previous years[4]. Specifically, compared to 2020, the number of income millionaires grew by about 18% in 2021[4]. Adjusted for inflation, this increase was about 12%[4].
Several factors might have contributed to this trend, particularly in 2021: inflation, pandemic-related economic factors, economic recovery, and economic policies& taxation. Inflation can lead to a rise in nominal incomes, potentially pushing more individuals into the millionaire category. Pandemic effects may have created specific opportunities or challenges that influenced income levels. The economic recovery and certain economic incentives might also have played a role. However, specific details about policies affecting Germany in 2021 are absent from the given data.
Community policy and employment policy are two crucial factors influencing the economic well-being of millionaires, as many of them generate their income through business operations or employment. In the case of millionaires, their financial status significantly impacts not only their own livelihood but also the broader business landscape and overall income distribution within the community.
Footnotes reveal that in 2021, around 34,500 income millionaires were reported, showing an increase of approximately 18% compared to the previous year, even after adjusting for inflation. This rise in high-income earners highlights the importance of understanding the role of employment policies, taxation, and other economic factors in shaping income distributions within the community.
