Bloomberg has released a new series of graphs showing what it takes to be in the top 1% around the world.
The graphs are based on a variety of data sources including the World Inequality Database, KPMG’s worldwide tax data and the Knight Frank Wealth report.
“Since the financial crisis, income inequality has garnered increasing attention from economists, politicians, and journalists, and perhaps no income level has been cited more than the so-called 1 percent,” said Bloomberg researcher Ben Steverman.
“Yet that term can describe a wide variety of earners, depending on where they live,” he said.
Steverman’s research shows that unsurprisingly income standards vary wildly around the world.
For example, you might need the combined incomes of eleven 1 percenters in India, a developing market, to equal one in the oil-rich United Arab Emirates, he said.
This is the case in South Africa where you will need $162,000 (R2.21 million) annual pre-tax income to be considered in the top 1% of earners.
This is significantly higher than India (R1.1 million) and China (R1.43 million), but substantially lower compared to developed nations such as the USA (R6.5 million) and the UAE (R12.1 million).
Part of this disparity may be explained by the respective income tax rates in these countries.
France, Austalia, China, the UK and South Africa all have a top marginal tax rate of more than 40%, while citizens in Bahrain and the UAE pay no marginal tax rate at all.
“In most of the developed world, 1 percenters don’t keep everything they make,” said Steverman
“A significant share of their income is earmarked for the government. In many countries, the highest income tax rate applies to only a portion of the 1 percent.”