I’ve been digging through some historical tax receipts data (#NerdAlert) to determine whether investment income — defined as net income from taxable interest, dividends, capital gains, and rent — has been rising as a share of gross income. To my surprise, it has been fairly flat at around 10% in recent years (see Exhibit 1).

Given the run-up in asset prices over the last two years, maybe this picture will change along the lines of the tech bubble and the lead-up to the global financial crisis. We’ll have to see once the 2016-17 data are released.

In any event, one of the more interesting facts that I stumbled upon is the growth in royalty income, particularly as a share of rent + royalties. (This is a bundle that the IRS uses). Net income from royalties grew from $5 billion in 1995 to $22 billion in 2011 (the last year for which complete data are available; see Exhibit 2).

This finding is in line with the conclusions of Jonathan Haskel and Stian Westlake’s Capitalism without Capital: The Rise of the Intangible Economy. It’s a thought-provoking book with helpful frameworks for understanding intangible assets.

My key takeaways from the book include:

1. New frameworks for thinking about value creation; and,
2. Questions to ask oneself when developing a business model.

I finished the book excited about creating some new entrepreneurial ventures. If you’re looking for a synopsis, Martin Wolf has a good piece here.