One of the problems with the mythology of the stock market is that somehow, a high stock market will reflect a booming economy. Today with the casino-like transformation of banking, you can have banks making billion dollar bets on people failing and this will turn a healthy profit. You have trillions of dollars in derivatives being traded in black boxes. None of this of course translates to a real world benefit and each piece of income data seems to reflect that.
Regulation growth is one of many reasons. These become obstacles to new companies and job creation. It also fosters crony capitalism that feeds off of a bloated government rather than a satisfied market. The counties with the highest household income are mostly suburbs of Washington DC.
The actual inequality of wealth and income distribution is less of a concern than its combination with immobility. Regulations and taxes do not punish the rich as much as it punishes those who are trying to get rich.