A Grand Canyon of wealth disparity in shadow of the Teton Range
JACKSON, Wyo. – Jackson Hole is noted for the sky-piercing Teton Range. But it also has a Grand Canyon-like gap between the ultra-wealthy and everybody else.
The Economic Policy Institute, a think tank based in Washington D.C., recently ranked Teton County as having the most unequal incomes in the United States. The report found that the average income of the top 1 percent was 213 times the average income of the bottom 99 percent of households.
Local economist Jonathan Schechter earlier this year painted more detail in this picture. He cited Internal Revenue Service data that shows Teton County is the wealthiest in the United States based on per capita income. In 2014, the most recent year available, per capita income was $194,585.
Schechter finds this chasm: 9 percent of people accounted for 89 percent of all income in Jackson Hole. Flipped on its head, this means 91 percent of people account for just 11 percent of wealth. That disparity is the most pronounced in the United States.
The Jackson Hole News&Guide observes that the wealth disparity is manifested particularly in housing. The last time a family earning the median income of Teton County could afford a median-priced home was in the mid-1980s. County planners estimate that a family now must make nearly three times the median income to be able to afford a median-priced home.
Earlier this summer, the median price of homes listed for sale was $2.5 million. Only seven single-family houses were listed for under $750,000, according to the Jackson Hole Report issued by David Viehman, a real estate agent.
Aspen and Pitkin County have the fourth greatest inequality in the nation. There, 9 percent of people have 73 percent of the wealth.
Schechter makes the argument that Wyoming’s tax laws also encourage Jackson Hole’s imbalance. Yes, the Tetons are dramatic, he seems to say, but there are some bottom-line reasons why big money is lofting into Jackson Hole.
Wyoming has no income tax. Wyoming residents can also create dynasty trusts to shield property from federal estate taxes for up to 1,000 years. The state also has no real-estate transfer tax, no estate tax, no tax on out-of-state retirement income.
Real estate agents have taken to trumpeting the tax advantages of real estate investment in Jackson Hole. In July, Sotheby’s International Realty ran an advertisement headlined “Wild, wonderful Wyoming—the tax friendly state.”
News&Guide reporter Benjamin Graham’s story also delved into what he called artificial incentives that further encourage wealthy people to buy homes in Teton County. One is the local airport, which has a strong link for easy travel to the nation’s metropolitan areas. But then there’s this: spraying of mosquitoes, which makes summers far more pleasant.
Can Jackson Hole tweak regulations to create a better balance? One possibility is to require more affordable housing be built along with new residential development. The current rate is 25 percent. The regulation comes into play with the construction of homes larger than 2,500 square feet or a new subdivision.
“Whether the community is interested in looking at tweaking regulations and other artificial incentives remains to be seen, but the fact remains that residents have some control and ability to react to the phenomenon of wealthy people relocating here.”