Based on anecdotal evidence, you might conclude that Vermont has experienced an enlargement of its own internal Wealth Gapmeasured as the percent of total income, including capital gainsgoing to the top 1 percent of earners. Some of us critics trace this result to specific long-running state government policies regarding job creation, an oppressive regulatory climate, Big Brother planning and zoning, and so on, but you must also note that enlargement of the Wealth Gap is not only unique to Vermontits a nationwide phenomenon. Historically, the charts show, the share of total income now going to the top 1 percent is at 23 (as of 2006) which is just about where it was at its pre-Great Depression peak in 1926. It bottomed out at 8 percent in 1975. This 1 percent of the population pays 35 percent of all income taxes. If youd rather measure such things in terms of net worth rather than net income, the statistics for that are roughly parallel: I located a little chart on the Internet that shows net household worth peaking at 44 percent of the total owned by the top 1 percent in 1929, dropping to 19 percent in 1976, and rising to 40 percent by 1997. The 1 percent dont pay taxes as the income wealthy do, because just about the only tax, on what you might call stagnant wealth, is the property tax as well as the relatively small intangible assets tax in Florida. If youre a mortgage-free retiree or a trust-funder (with a house bought by your doting parents), its easy to show a comfortably low taxable income flow while sitting on quite a generous nest egg of real value. The underlying reason, based on anecdotal evidence, as to why Vermont is first in the nation for total tax burden, but with high progressivity rates built in (for example, a clear majority of homeowners enjoys property taxes capped at 2 percent of income), is that its quite possible to enjoy wealth in asset form while avoiding taxes on it in income form. I was unable to find a statistic for Vermonts Wealth Gap, but you can see why the stat, even if located, wouldnt reveal too much. You have to look at other indicators. One indicator for high household net worth is second-home ownership. Vermont is second in that category, behind only Maine, the U.S. Census Bureau reports. Nationally, 3.1 percent of the housing stock are second-homes; in Vermont, its 14.6 percent. Another Vermont indicator is the median home value: in 2006, it was $193,000, well above the national average of $186,000, while monthly owner costs including mortgage were at $1,342, well below the national average of $1,402. Unmortgaged houses were lived in more lavishly: $525 per month in Vermont, $399 US average. Beyond such modest markers there isnt much, and wont be until the federal bean-counters publish a new set of relative income and wealth categories from the 2010 Census. The usual median-income stats for personal ($34,623) and disposable ($30,765) put Vermont midway among the states at no. 24. Percent below the poverty line is 10.3 percent, not far from the national average of 13.3 percent. Vermont is no. 1 of all states for acute-care Medicaid spending, but no. 51 for long-term-care Medicaid spending, explicable under a two-tier demographic-split theory where, because of a shrinking middle class, more of the total population than average is at the two extremes, poverty (needing more Medicaid emergency-room aid) and wealth (needing less nursing-home subsidy). The two-tier theory isnt new and didnt originate with this column: its earliest advocate, to my knowledge, was one Frederick Jagels of Cabot, Vt., who opined in print on the subject back in the 1980sa time was well before middle-class out migration had become noticeable. Now, a quarter-century later, a relatively small out migration (about 600 in 2006, according to the American Legislative Exchange Council reports) gives rise to much theorizing about middle-class shrinkage. One stat recited by economist Arthur Woolf has it that Vermont leads the nation in shrinkage of the 25-44 age group; when they leave for economic reasons, they take their kids with them, thus explaining both a lower-than-expected unemployment rate and a 10 percent or so school enrollment decline over the last ten years. If you think more in graphical than in verbal terms, visualize it this way: if the normal income or wealth distribution takes the shape of a bell curvebecause of a large middle-class in the center of the distributionthen Vermonts emerging two-tier economy would show as a reverse bell curve (lower than normal in the center) because of middle class shrinkage, and higher at the two ends. Long-time Vermont observer, architect Martin Harris now calls Tennessee home.