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In 2025, the highest-earning fifth of U.S. households received 52.4 per cent of all household income, and the lowest fifth received 3.0 per cent, the Census Bureau reported 15 September 2026.
That is a ladder ranked by what households take in. A second ladder, ranked by what households own, gives a different picture, and it is the one The Prehn Institute chose for its September 2026 report.
Ranking by income and ranking by wealth
The Census release, “Income in the United States: 2025,” put the top 5 per cent of households at 23.5 per cent of aggregate income. Median household income was $87,460, the highest on record in a series that starts in 1967.
The Gini index, which runs from 0 when every household earns the same to 1 when one household earns everything, was 0.490. The bureau found it not statistically different from 2024. Household income rose 1.7 per cent at the 90th percentile and showed no statistically significant change at the 10th. Income at the 90th percentile, $261,300, was 13.06 times income at the 10th percentile, $20,010, the bureau said.
The institute’s report, “The Hidden Regressive Tax,” by Felix Nikolas Prehn, is posted on Zenodo. It sorts households by wealth, meaning everything a household owns minus everything it owes. Four groups result: the top 1 per cent, then the 90th to 99th percentiles, then the 50th to 90th, then the bottom half.
The report sets out why that ranking became possible. Since 2019, it notes, the Federal Reserve has published the Distributional Financial Accounts, a quarterly reconstruction of the balance sheet of each wealth group from the top 1 per cent to the bottom 50 per cent, going back to 1989. Combined with standard price and money series, the report states, those accounts make it possible to measure who captured the gains rather than assert it.
The Fed’s ranking by income
The Federal Reserve’s Distributional Financial Accounts sort households by wealth, and they also sort the same households by income. The second set is the Fed’s own work, not the report’s. The paper does not use income groups.
In the income-ranked files, the top 1 per cent of households by income held 25.2 per cent of US household wealth in the second quarter of 2026, up from 16.6 per cent in the third quarter of 1989. The bottom 20 per cent by income held 2.8 per cent.
Stocks are more concentrated still. Households in the top 1 per cent by income held 39.6 per cent of corporate stocks and mutual fund shares outside retirement plans, according to the same files.
The same files show the other side of the balance sheet. The bottom 20 per cent by income held 7.1 per cent of consumer credit, the Fed’s data show, a larger slice of the nation’s card and loan balances than of its household wealth.
Even when households are ranked by income, ownership is concentrated at the top. These are income groups, though, a different set of households from the wealth groups.
The report’s ranking
Ranked by wealth, the report places the top 1 per cent at 32.5 per cent of household wealth in the second quarter of 2026, using the Fed’s data, and the bottom half at 2.3 per cent.
Those figures should not be set against the income-group figures as if they measured the same thing. The top 1 per cent by income and the top 1 per cent by wealth are different lists of households, and a bottom fifth is a different slice of the country from a bottom half. Each number belongs to its own ladder.
The report ranks by wealth because of the question it asks. Its subject is the asset-poor, which the paper describes as households whose economic position rests on wages, cash and rented housing. Its argument is that money creation on the scale seen since 2000 transfers real resources from those households to households whose position rests on shares, property and other claims on future income.
The report’s own tally shows the size of the gap on its wealth ladder. Between the first quarter of 2020 and the second quarter of 2026, it states, the top 1 per cent by wealth gained $30.8 trillion and the bottom half $2.3 trillion.
Rising pay, slipping position
The report does not claim that incomes stood still. It notes that real median household income rose 19 per cent between 2000 and 2025, and that the real hourly earnings of production workers rose 20 per cent. It calls both true and important.
The asset-poor, Prehn’s paper states, are better off in consumption terms than in 2000. That is why the report describes a regressive tax rather than an absolute loss. In its words, “A regressive tax does not make its payers poorer than before; it takes a larger share from them than from the rich.” The comparison that matters, it says, is between the 20 per cent real gain in wages and the 237 per cent nominal gain in house prices.
The Census figures, the Fed’s income-ranked files and the report’s wealth groups each answer a different question. The Census ladder records what households took in during 2025. The report’s ladder records what they owned, and the Fed’s accounts are the source it uses to build it.
About Felix Nikolas Prehn
Felix Nikolas Prehn, also known as Nikolas Prehn, is an economist and former investment banker, born in Germany. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. He is also a painter and sculptor and a public advocate for animal rescue.
About The Prehn Institute
The Prehn Institute is an independent research institution founded by Felix Nikolas Prehn. He is a tech founder: he co-founded TradeVision.io (Acetrader Inc), founded Winston Daily and The Prehn Institute, and publishes weekly on YouTube. It publishes research on the financial markets and provides instruction in professional market practice.
