Most Expensive Bottle of Wine Ever Sold at Auction

What does a $29,000 glass of wine taste like?

An Asian buyer is about to find out–at least, if they decide to pop the cork.
Three bottles of Châteaux Lafite-Rothschild 1869 were just sold at a Hong Kong auction by Sotheby’s. The hammer price of $232,692 a bottle set a record for the most expensive bottle of wine ever sold at auction. It may well be the most expensive bottle ever sold, though there are no records of private sales.

“Wine history was made today,” said Serena Sutcliffe, head of Sotheby’s International Wine Department.

Top first-growth wines, of course, have had a huge run lately because of demand from Asia–primarily newly wealthy Chinese buyers. The Sotheby’s auction raked in a total of $8.4 million–more than triple the initial estimate. All 284 lots were sold. The wine came directly from Domaines Baron de Rothschild, giving them “perfect provenance,” in wine speak.

A total of seven bottles hit more than HK$1 million, or $128,205 each.

By way of comparison, billionaire William Koch paid $500,000 for the four bottles of Bordeaux (vintages 1784 and 1787) that many now believe to have been counterfeit.

At $232,692 a bottle, the Lafite 1869 works out to about $29,000 a glass, or more than $2,000 a sip.

Worth it? We may never know. The buyer is unlikely to ever drink them. More likely they were purchased as investments or well-lit and highly protected centerpieces to a wine cellar.

But if they do decide to take a sip, let us hope they post a review.

The Real Life ‘Bond Girls’ Who Serve the Rich

The concierge business–for all it is high-priced aura–is actually quite mundane. It is about as satisfying the daily needs and whims of the wealthy, from getting concert tickets and restaurant reservations to household staffing and travel bookings.

But one London concierge company is spicing things up a bit. They are touting their all-female–and not unattractive–staff.

An article in Forbes by Hannah Elliott says Concierge has a “highly trained force of femmes fatales” who cater to the firm’s wealthy clients. “It’s Charlie’s Angels meets Miss Moneypenny,” the article says. Or just an army of real-life Bond Girls.

Concierge’s customers pay $20,000 a year, plus $80 an hour for the company’s services. The Concierge femmes might help “buy, renovate and decorate a home in the Scottish Highlands or cook brunch for 20 in Ibiza when the private chef shows up drunk,” the article says.

The company only hires female employees because “women more often possess the skills required to predict and fulfill the most minute client needs,” according to CEO Flora White.

Clients say their appearance doesn’t hurt.

“Perhaps this sounds awful–but the girls look fantastic,” said India Jane Birley, a Concierge member and daughter of a nightclub mogul. “If you passed them in the street, you’d say, ‘What a nice-looking girl.’ They’ve got nice clothes and are incredibly well-mannered.”

The women also have to be determined. They endure a rigorous interview process that involves time-trials for planning such events as a Napa Valley, Calif., family vacation or a dinner for a VIP. Once hired, their assignments can be challenging. Whether they can survive a pool full of piranhas is unclear. But Philippa Hose, a tall, blonde Concierge employee, had to scale a security fence while wearing a pencil skirt and heels in order to disable a client’s alarm system during a storm.

Ms. Hose says she has one main ground rule: never be rude. “You must be someone who is charming,” she says.

Will the Bond Girl strategy work? Perhaps. These are uncertain times for the increasingly competitive concierge business, which exploded during the boom times but now is grappling with a customer base that is increasingly careful about its spending. Any thing that helps a business stand out is, I’m sure, helpful.

But separating the wealthy from their money right now may take more than a pretty face.

Millionaire Optimism Hits 3-Year High

At least someone’s feeling good about the economy.

The latest Spectrem Millionaire Investor Confidence’s Index, which polls people with $1 million or more in investible assets, rose substantially in October.

Spectrem Group, a Chicago consulting firm, said its Millionaire Index jumped six points in October to the highest point since the good old days of December of 2007.

The reason: the recent stock market climb. Millionaires cited “stock market conditions” as the factor most likely to affect their investment decisions. Interestingly, the “political climate,”
which had been among the top concern for months, is now among the least of their concerns (only 8%).

Of course, millionaires aren’t exactly popping the champagne corks. The index is now at zero, meaning “neutral” territory. “While the stock market’s October gains clearly contributed to this positive trend, underlying economic fundamentals remain a top concern for America’s wealthiest investors,” said George H. Walper Jr., President of Spectrem Group.

Still, some economists expect the affluent and wealthy will continue to fare better than the rest of the country. A report from Bank of America Merrill Lynch economist Neil Dutta, titled “High Hopes for the High End,” says luxury spending by top earners is likely to be a bright spot in the consumer landscape.

He cites four reasons:

No. 1–Savings. “High-income earners have more savings to draw down, and generally are less likely to adjust their spending behavior substantially based on business cycle swings.”

No. 2–Investments. “Upper-income households have less exposure to housing and greater exposure to the equity market. So their balance sheets tend to be significantly healthier than the lower income cohorts.”

No. 3–Rewards of Good Behavior. “With interest rates already very low, the Fed’s push to reduce rates even further will likely increase refinancing activity among good credits, which typically are upper-income earners.”

No. 4–Jobs. “The labor market is significantly tighter for college-educated individuals, and those with more education generally enjoy stronger earnings growth.”

All of that is true. But these days, the confidence of the wealthy seems more tied to the stock market than any other indicator. And that means the spending and investing of the wealthy isn’t a sure thing. In fact, it could change by the week.

After all, it was only three months ago that the index fell 11 points to levels last seen in June 2009, a decline that was interpreted as indicating that millionaires were “mildly bearish.”

Do you think the millionaire optimism will be sustained through this year or next?

The Biggest, Richest Party Ever

The developed world is struggling to emerge from recession and high unemployment. Inequality is soaring around the globe. Many countries are grappling with record deficits and spending cuts.

What better time for the wealthy to throw a party? And not just any party. The biggest, richest party ever!

A London-based group of hedge-fund managers is planning The Global Party, a 24-hour blow-out for 80,000 of their closest friends on Sept 15, 2011. Their aim is to make it into the Guinness Book of World Records as the largest party ever.

It’s inspired by Phileas Fogg, the protagonist in Jules Verne’s “Around the World in Eighty Days.” As such, the Global Party will be held at more than 80 venues around the world, from Amsterdam to Rio to New York and Dubai and Shanghai. Or as the party’s website puts it:

80,000+ OF THE WORLD’S ELITE…
80+ OF THE WORLD’S FINEST LOCATIONS…
ALL WITHIN 24 HOURS…

Among those expected to attend are Liz Hurley, Uma Thurman and Simon Cowell. A table is reported to cost 100,000 pounds. (Click here for a list of venues, sponsors and flashy pre-party pics). The invitation includes a
special edition Key-2 Luxury silver key ring, which gives the holder “access to thousands of personal contacts and exclusive VIP privileges for life, and is not available to purchase by the general public.”

Before we get all judgemental, let’s be clear that this is all for charity. The money – an expected 5 million to 10 million pounds — will go to the charity ARK (Absolute Return for Kids), founded by hedge-fund manager Arpad “Arki” Busson (aka “Mr. Uma Thurman”).

The hosts include Mr. Busson, entrepreneur Tom Singh, a Pakistani Prince and Stanley Fink, the hegde funder and Tory Party Treasurer.

Mr. Fink told the Times of London that such parties are ultimately altruistic.

“Yes, to the average man in the street they do look obscene but they do an incredible amount of good.”

He said that when he threw a big bash last year for his wife’s birthday, “Somebody said to me, ‘Are you sure you should be throwing a party in the middle of a recession?’ And I said, ‘This party will give employment to several dozen people and if people like me who have been prudent during the good times don’t start spending now in the bad times, what hope has the country got?’ ”

Mr. Fink is right, to a point. The money raised and the employment the party generates will no doubt provide help to those who need it. But is the Global Party the most efficient or best way to raise money for charity? The Red Cross last year raised $32 million through online giving, without the black-ties and caviar boats and pop stars.

That’s not to mention the negative press that’s sure to follow such a grand and global display of wealth in the midst of economic hardship.

But perhaps some people need a bit of glamour and ego-stroking to separate them from their wallets.

Do you think the Global Party is a good way to raise charity money?

The Three Golden Rules of Old Money

“Marketplace,” a radio program from American Public Media, has just aired a special report on wealth. It is titled “What is Rich? A Closer Look at America’s Income Gap.”

The segments and discussions range from “Is $250,000 Rich?” to “What Makes Us Feel Wealthy?” (Full disclosure, I was interviewed for a few of the segments). It also has a great playlist of “Music That’s Rich,” which features songs like “A Tease of Money” from the Ventures to “Beautiful Dirty Rich” by Lady Gaga.

My favorite segment is titled the “Burdens of Wealth,” which looks at the joys and trials of inherited money and includes interviews with wealthy people. It also makes some interesting distinctions between old and new money.

One featured guest is Mike Lapham, who thought he was growing up in a middle-class family in Rochester, NY. It was only later–after the age of 16–that he learned he was going to inherit enough money that he probably didn’t need to work.

“It was an adjustment, let’s say, to go from thinking you’re just like everyone else,” he says.

Mr. Lapham says his family taught him some fundamental “dos” and “don’ts” about money.

“Don’t tell anyone, because they’ll treat you differently. Don’t show that you have wealth. Certainly don’t spend it.”

His advice could well be read as the Three Golden Rules for Old Money. And in today’s show-me-the-money culture, where rich TV housewives compete over mansion sizes and lip augmentations, and where hyper-luxury is once again on the upswing, it is refreshing to hear about the virtues of wealth restraint.

Yet some say the reserve of old money isn’t just about humility. “Inheritors have less conspicuous consumption and that sometimes is from not having the confidence that they could recreate that fortune,” said Thayer Cheatham Willis, an heir to the Georgia-Pacific lumber fortune who now counsels the rich. “Whereas successful entrepreneurs often have the confidence, ‘Well I did it once I can do it again.’ ”

Inheritors also can feel guilty about having wealthy the first place, since they didn’t earn it.

Of course, some New Money behaves like Old Money. Yet I wonder if, as a whole, New Money could benefit from some of the teachings of Old. Not letting your children know your family is rich until they are teenagers may help to create more motivated, less-entitled children.

Not flashing your cash may have practical virtues, like staying under the radar of pesky fundraisers and the IRS.

Are there other valuable lessons (if any) that New Money could learn from Old Money?

Why Women Are More Charitable Than Men

The public face of philanthropy today is predominately male: Bill and Warren, Ted Turner, George Soros.

Yet among nonbillionaires, women seem to be the ones giving more, and more often.

A new study, called Women Give 2010, from the Women’s Philanthropy Institute and the Center on Philanthropy at Indiana University, found that women are more likely to give to charity than men.

The study looked at single men and single women to determine if there are gender differences on giving. The study also broke the groups into income quintiles, with the lowest earning $23,509 or less and the highest earning more than $103,000.

The study found that women were more likely to give in every income category. At the top quintile, 96% of women in the study were likely to give compared with 76% for men.

Women also tend to donate more dollars. In the top quintile, women said they planned to $1,910 an year (this was in 2007, so the numbers may have come down since then, given the recession). That is more than twice the amount planned by men of the same income group.

The study doesn’t offer any explanations for the differences, aside from describing women’s rising earning power and education levels. Are men and women wired differently when it comes to charity? Would the results still hold true for millionaires? These questions have yet to be studied.

What is more, many of the today’s top philanthropists are husband-wife partnerships, such as Bill and Melinda Gates, or Herb and Marion Sandler.

Yet the Women Give study states that “women at all income levels have the desire and capacity for giving and do give to charity. Savvy nonprofit organizations and fundraisers will change the way they approach donors, will include more women in their fund-raising strategies, and reach out to ‘half the sky’ to fulfill their mission.”

Do you think women are more charitable then men, and if so, why is that so?

‘Wealth Hormone’ May Lead to Longer Life

It is a sad fact of socioeconomics that the wealthy tend to lead healthier, longer lives than do the poor. Now scientists have gone a step further, finding a specific hormone that links wealth with a longer life.

The hormone is called DHEAS–or dehydroepiandrosterone sulfate–a natural steroid produced by the brain, adrenal glands and sexual organs. Those with higher levels of DHEAS tend to exercise more, have more hobbies and have closer relationships with friends and family. They also tend to live longer.

Researchers from the University College London, working on the English Longitudinal Study of Ageing, studied thousands of people over the age of 50 and found that wealthier people had higher levels of DHEAS.

They also found higher levels of a second hormone–growth factor I (IGF-I)–in those who are wealthier. The two hormones help regulate the body and control reactions to stress.

“A striking new finding is that the hormone dehydroepiandrosterone sulfate [DHEAS] that predicts life expectancy also follows a social gradient: less wealth, lower levels of DHEAS,” said Prof. Michael Marmot of the university’s Department of Epidemiology and Public Health.

The implication is that wealth brings freedom and time to eat well, exercise, enjoy various pastimes and stay closer to family and friends.

To some, this might seem like another case where money is destiny. Once again the rich seem to be winning the race and widening the gap, not just in financial terms but also in the far more important measure of life expectancy.

But ultimately the report could be good news for rich and poor alike. If DHEAS can be artificially produced in the future–and if its antiaging properties are real–it could be more widely distributed.

What is more, people may be able to produce more of their own DHEAS even if they aren’t wealthy, by leading more DHEAS-friendly lives–more exercise, more friendships and more hobbies–though, as the article notes, production of DHEAS is greatest in childhood and teenage years, gradually declines thereafter.

Of course, if you spend time doing all that, you might not get wealthy.

Do you think greater wealth leads to a longer life?

Millionaires Have No Time for Facebook

A new poll suggests that a majority of millionaires have signed up for social media sites. There is just one problem: They don’t have time to actually use them.

The poll from SEI Wealth Network, a wealth-advisory firm, showed that 70% of respondents with $5 million or more in investible assets are users of Facebook and other social media sites. That is more than the 61% of the broader population who use such sites.

SEI touted the results as proof that the rich are social-media animals. “Wealthy individuals are engaged with social media even more than the rest of the American public,” said David McLaughlin, Senior Managing Director for the SEI Wealth Network

That would be true–if the wealthy spent time on the sites. But the poll also showed that only 17% of the multimillionaires use the sites on a daily basis. That is far less than the broader population, in which 38% use such sites at least once a day.

The main reason: the wealthy are squeezed for time. Apparently, catching up with old high-school friends and adopting virtual sheep on FarmVille is less of a priority that running a business or trying to stem the losses on a $10 million portfolio of hedge-funds and stocks.

For those who do have time, Facebook is the preferred site of multimillionaires, with half saying they are users. A little more than a third use Youtube and another third uses LinkedIn.

Most of the respondents said they use the sites for personal, rather than business reasons. I should hope so.

Do you think social-media sites are useful for the wealthy? If so, how?

The Texas Billionaire’s Estate Tax–Part Deux

In June, I wrote about natural-gas tycoon Dan Duncan and his untimely death–especially untimely, it appeared, for the IRS.

Mr. Duncan, who had a fortune estimated at more than $12 billion, passed away in March from a brain hemorrhage. His death prompted widespread reports and speculation that his heirs would avoid a major tax bill, since the estate tax has temporarily vanished for 2010. The New York Times estimated Mr. Duncan’s heirs might have saved billions of dollars in taxes.

Forbes even highlighted the children’s newfound wealth in its latest list of richest Americans, listing the four Duncan offspring for the first time, with more than $3 billion each. The 27-year-old Scott Duncan is now one of the country’s youngest billionaires.

Now, comes a statement from the Duncan family’s closely held company, Enterprise Products Company, that suggests Mr. Duncan’s heirs might not have benefited from the estate-tax lapse after all.

The statement says that well before his death, Mr. Duncan transferred his economic interest in his company to his four children. The statement says the children “are not materially benefiting from the lapse in the federal estate tax as promulgated under current tax law.”

The statement says that while “Mr. Duncan controlled the family’s privately-held company, which owns limited partner interests in Enterprise Products Partners L.P. and Enterprise GP Holdings L.P., and the value of these limited partner interests were attributed to him by a major business periodical prior to his death, the Duncan children have owned substantially all of the economic interests in the privately-held company for many years. Other than specific bequests, the bulk of Mr. Duncan’s estate will pass to his charitable foundation as outlined in his will.”

In other words, the children already owned the company, so there was little to pass down or tax after his death. Besides, the company says, most of what was left will go to charity, which wouldn’t be subject to taxes regardless of the estate-tax policy.

Still, all of that doesn’t solve the mystery of the “controlling interest.” The children may have owned the economics, but Mr. Duncan held the controlling interest–which was separated from the economic interest–until his death. Wouldn’t the controlling interest in a company have a value? And would that have been passed down without being subject to the estate tax?

The company won’t say. A company spokesman, Rick Rainey, declined to comment on the controlling interest or its value.

Whatever the value, the case highlights how clever and complicated estate plans for the wealthy have become. Mr. Duncan continued to control the family company, but to the tax authorities, the company belonged to his children. It is unclear exactly how the assets were passed to the children. This article on culturemap quotes a probate attorney saying Mr. Duncan could have used a common structure in which he placed his interests into a general partnership that was then passed to the heirs.

Do you think his “controlling interest” would have been taxed if we had an estate tax in 2010?

The Platinum Ceiling: Why Women Billionaires Are Declining

There is a fascinating chart (reproduced below) in the new Global Wealth Report issued by Credit Suisse Group.

Its focus is women of large wealth, and it shows a sharp drop in the number of women on the Forbes list. Since 1986, the number of women on the Forbes list has fallen by more than half, to 41 in 2009 from 89 in 1986. That is the bad news.

The good news is that the number of women with “new” money–i.e., not from inheritance–has increased. The number of nouveaux ultrarich women has nearly quadrupled, to 31 in 2009 from from 8 in 1982.

Credit Suisse posits that this owes to a “reduction in the importance of inherited wealth, as the waves of entrepreneurship, de-regulation, and technological change since 1970 has led to a rise in wealth mobility.”

That partially explains the drop. Inherited money–which along with divorce historically was the path to great wealth for women–has clearly been eclipsed by the larger fortunes of self-made entrepreneurs and executives.

But it doesn’t explain why so few women have ridden the “wave of entrepreneurship”to the top of the Forbes list. Especially if you consider that of the 41 women on the Forbes list today, most achieved their money through marriage.

The 2010 Forbes list of self-made women billionaires shows that of the more than 1,000 billionaires in the world, only 14 are women. Five of those 14 co-founded businesses with their husbands, though that doesn’t diminish their success as entrepreneurs.

This remains a mystery to me, especially as women dominate the rest of the economy. They now account for more than half the work force and more than half of all college grads. Why are women doing so well in the broader economy, but remain so under-represented in the Forbes economy?

Explanations often focus on the innate attitudes toward risk–men take more risks than women, and getting super-rich requires taking risks. Others point to the challenges women have in raising capital and marketing themselves. Another reason is that men tend to want to tout their wealth more, so there could be far more self-made women billionaires who just want to stay under the Forbes radar.

Or, perhaps, schools and colleges could do a better job at encouraging women in science and math, the building blocks of much of today’s large wealth.

Why do you think self-made women are so underrepresented on the Forbes list?

World’s Richest Man: ‘Charity Doesn’t Solve Anything’

Carlos Slim has always had a complicated relationship with philanthropy.

The Mexican billionaire, who Forbes still lists as the world’s richest man, said in 2007 that he could do more to help fight poverty by building businesses than by “being a Santa Claus.”

Mr. Slim’s signature also has been noticeably absent from the Gates-Buffett Giving Pledge. At a conference in Syndey last month, Mr. Slim said that charity accomplishes little.

“The only way to fight poverty is with employment,” he said. “Trillions of dollars have been given to charity in the last 50 years, and they don’t solve anything.”

As for the Giving Pledge, he said: “To give 50%, 40%, that does nothing,” Slim said. “There is a saying that we should leave a better country to our children. But it’s more important to leave better children to our country.”

In a speech in Mexico City Thursday, he reiterated his point that the best way to fight poverty is to create jobs.

Now Mr. Slim isn’t un-charitable. He has contributed hundreds of millions of dollars to his foundation and has funded millions of dollars in joint-venture projects with the Bill and Melinda Gates Foundation.

So he clearly isn’t against charity entirely. His point seems to be that society would benefit more if the wealthy channeled their creative energies and talents toward building job-creating businesses rather than doling out cash. It is the 21st century billionaire version of the old adage, “give a man a fish and he eats for a day, teach him to fish and he eats for a lifetime.”

In these populist times, some might argue that Mr. Slim is being a selfish billionaire who is simply justifying his own wealth accumulation. But he poses two good questions–ones I have heard from an increasing number of wealthy entrepreneurs:

Would Bill Gates and Warren Buffett be doing more for society by putting their time and money into new businesses rather than funding philanthropy?

Has philanthropy solved any major social problems in the past 50 years?

Wealthy Candidates to Spend More Than $400 Million on Elections

Rich political candidates have provided the country with immeasurable entertainment this election season. There was Jeff Greene’s party yacht. There was Linda McMahon’s crotch-kicking video. And of course, Meg Whitman’s angry maid.

But the greatest contribution has been their money. According to data I’ve compiled from Followthemoney.org and Opensecrets.org, wealthy candidates running for state-wide or national office have poured $396 million into their campaigns for the current election cycle. The number is likely to soar well past $400 million by election day, according to campaign-finance analysts.

The biggest spender for national office is Linda McMahon, the Connecticut Senatorial candidate who has contributed $22 million to her campaign. For state races, the leader is Meg Whitman, who has contributed $140 million or more to her campaign.

For state races, self-funded candidates have spent $243 million, up from $230 million in the 2006 mid-terms, according to followthemoney.org. For national races, candidates have spent $153 million, up from $145 million in 2006, according to opensecrets.org.

Their combined spending has become a small stimulus program of sorts. Just think of all advertising, campaign workers, buses, planes and cars, and pizza deliveries that $400 million has supported. Not to mention the pricey consultants hired to make rich candidates sound like normal people.

That $400 million is equal to the government’s total spending on its Healthy Food Financing Initiative, Michelle Obama’s pet project.

Of course, lots has been made of the fear that the rich are buying their way into office. (Though the failed campaigns of Jeff Greene, Steve Pagliuca and others prove that money alone can’t buy an office).

An equally fair question is what will happen when all this rich-candidate-stimulus program runs out. The rest of the wealthy–fearful about the country’s economic future–seem to be pouring their money into gold, cash and other nonproductive uses. Wealthy politicos seem to be the only rich people really spending to create jobs right now. After all, it is their money, they should be able to spend as they please.

Granted, $400 million is a drop in the bucket of the country’s $14.6 trillion GPD. But in this economy, every little bit helps. Perhaps we should hope that the richest candidates face long and expensive run-offs elections.

Do you think the $400 million has been a positive for the economy?

Ralph Lauren Will Show You His Cars–For $150,000

Ralph Lauren’s “Pink Pony” online charity auction has all kinds of unusual items up for bid.

You can buy a Teepee inspired by the RL Ranch (current bid: $3,750). You can get modeling and catwalk tips from the supermodel Valentina (current bid: $1,000). Or you can have your dog (or your child) star in a Ralph Lauren ad (current bids $2,500 and $9,250, respectively). All proceeds go to fund the fight against cancer.

Yet one item on the list stands out as a bit, well, pricey.

That would be the tour of Ralph Lauren’s car collection. The estimate for the tour is $150,000. That’s right, $150,000 to look at–not to own–some vintage cars. Oh, you also get a book.

Granted, it is an impressive collection. He owns vintage Ferraris, Porsches and a 1936 Bugatti Atlantic, which is valued at north of $30 million. As the bidding description states, “You and a friend will receive a tour of this extraordinary private collection of classic cars given by Ralph Lauren himself.” The day ends with a ride in the 1936 Bugatti. The winner also get a signed copy of “Speed, Style, and Beauty: Cars from the Ralph Lauren Collection.”

I love cars as much as the next guy (and maybe more). Having some quality car-talk time with Ralph would be an experience to remember. But for $150,000? For that amount, I think I would rather buy my own Porsche or Ferrari.

This is, however, for a cause, and someone may well hit the estimate. Even if they don’t, the tour is likely to raise a large chunk of change. So far there have been four bidders and the top bid is $42,500.

How much would you pay for a tour of Mr. Lauren’s cars?

The Rising Threshhold for Being in America’s Top 1%

Inflation may be low in the real economy. But not at the top of America’s income ladder.

A new analysis of IRS data by the Tax Foundation tells us how much it takes to be included in the 1 Percent Club, or to be among America’s top 1% of earners.

The result: the threshold for the One Percent Club has more than quadrupled since 1980. While the cut-off fell slightly in 2008–about 7% owing to recession and global financial crisis–it will likely resume its steady march higher in 2009 or 2010.

How to explain such a rapid increase? Inflation is part of the equation. A salary of $80,580 in 1980 would be $207,920 in 2008 dollars. But that still is far lower than the $380,354 required to make the 2008 cut-off.

The rest of the increase is likely attributable to the rising salaries of top executives and business owners, as well as higher returns from investments and asset sales. Those rising salaries at the top have–over the long term–increased the share of income going to the top 1%. In 2008, the top 1% accounted for 22.8% of the nation’s reported income, up from 8.46% in 1980. (As we know, their share fell in 2008, though it still is above 2004 levels.)

Here is the chart, going back to 1980 (numbers are adjusted gross income and are not inflation-adjusted).

1980 — $80,580
1985 — $108,134
1990 — $167,421
1995 — $209,406
2000 — $313,469
2005 — $364,657
2007 — $410,096
2008 — $380,354

*The Tax Reform Act of 1986 changed the definition of AGI so numbers aren’t strictly comparable.

How much do you think it will take to be in the top 1% of income earners in 2015?

Why the Wealthy Are Paying Less of America’s Taxes

The debate over raising taxes on the wealthy has turned largely on a single premise: the rich are running away with a disproportionate share of the nation’s income but paying ever lower taxes.

As the tax-supportive Warren Buffett said in a speech yesterday: “The question is, do we get more money from the person that’s going to serve me lunch today, or do we get it from me? I think we should get it from me.”

New data from the I.R.S. and an analysis by the non-partisan Tax Foundation, show the rich are indeed paying a lower share of the nation’s tax burden. But that’s because the rich are losing income. And while their share of the nation’s earnings is falling, their average tax rate is rising.

The data show that in 2008, the top 1% of tax returns paid 38% of all federal individual income taxes and earned 20% of adjusted gross income.

That marked a big drop from 2007 — the peak of the boom — when the wealthy paid 40.4% of income taxes and earned 22.8% of income. In fact, the share of income held by the top 1% was the lower in 2008 than it was in 2000.

That suggests that after years in which the rich increased their share of national income, their share may now be shrinking.

At the same time, the tax rate paid by the rich is actually going up. The top 1% paid an average income tax rate of 23.27%, up from 22.45% in 2007 — the first increase since 2000. The study attributes the increase to the fact that the wealthy are earning more of their income from wages and salaries rather than capital gains and dividends (which are taxed at a lower rate).

“Overall, these data on high-income tax returns appear to confirm that the recent recession had the same diminishing effect on income inequality that most recessions have, and that it occurred for the same reason, a sharp decline in income at the high end,” the report said. “This appears to contradict recent reports based upon Census data suggesting the opposite, that this recession had actually increased income inequality.” (For more on why the IRS and Census data confict, click here).

Yes, the wealthy still have a huge share of income and taxes. The report states that the top 5% of tax-payers earn 34.7% of income and pay 58.7% of taxes.

And of course, 2009 and 2010 may tell a different story.

But the report calls into question the prevailing notion that the rich are gaining their share of income while paying ever lower tax rates.