Sunday, October 30, 2011

Ninety-Nine Percent

In the last 30 years the top 1% of Americans saw their real, after-tax  income increase nearly fourfold. And how about the "other" 99%? Look below (click to enlarge)...


One picture is worth a thousand words

The chart appears in an article in The Economist (Income Inequality in America:The 99 Percent), which includes the following passage:

...the data are powerful because they tend to support two prejudices. First, that a system that works well for the very richest has delivered returns on labour that are disappointing for everyone else. Second, that the people at the top have made out like bandits over the past few decades, and that now everyone else must pick up the bill.

Couldn't have said it better myself (and I don't frequently agree with The Economist).


The chart in The Economist article comes from a very interesting study done by the US Congressional Budget OfficeThe following chart is on its cover.





21 comments:

Anonymous said...

Now is it not interesting that this all starts with 1979 and the election of one Ronald Reagan.

And those that served under him still get some sort respect as does this one Ronald Reagan.

Wow brain-washing actually does work.

camabron said...

..."prejudices" or realities?

JP said...

The graph shows the Unraveling/Third Turning, or K-cycle Fall. We had some wonderful debt expansion and massive credit manias.

We are now in the Crisis Era/Fourth Turning, or K-cycle Winter. Now we get to deal with the fallout.

This has all happened before. It will all happen again. Well, as long as the West continues.

markincorsicana said...

Interesting that Kondratieff was executed by the NKVD.

"Wow brain-washing actually does work."
I think Dorothy and Toto
said it best "What's the Matter With Kansas?"

ajohor said...

More interesting was that the greatest gains were in 1990s where the Clinton administration came in.

jay matt said...

Hello can you provide the link to a post you did a while back on the US Dollar as the reserve currency vs the total value of the global energy complex.... how it is all transacted in dollars

Anonymous said...

Keep in mind that these graphs are of income, not wealth. Wealthy people don't work, because they are rich and don't have to.

Anonymous said...

It only shows that 1% work smarter than the rest.

In the 90s, everyone tried to pick stocks and were chasing internet stocks. They made fun of Buffet sticking to old dodgy companies. Now that it turns out that Buffet was right and 99% were wrong, the 99% group decides to gang up on Buffet claiming unfairness.

Brian Woods said...

@ anon: Nov 6th: 1:34

"Hey up!" I think Buffo made a horse's ass out of some stuff he was promoting.

Just rem that Dr Malthus was right too - just not yet.. But soon, soon!

The 99 are ganging up on folk who broke the laws of the land!

Brian

Hellasious said...

To Jay Matt re: link to older post.

I think you are referring to a post titled "The Greenback: Toward A New Monetary Policy". Here is the link:


http://www.blogger.com/blogger.g?blogID=4102429195693595750#editor/target=post;postID=3741113300178806188

Regards,

H.

Daniel said...

Yes, but what's also fascinating is how the top 1% is paying nine times as much in taxes as they paid in 1979 over a period where their income increased roughly four-fold.

You can at least say the 99% is getting its pound of flesh. But it begs an enormous question: If we're getting so much more money out of the top 1% now, and income inequality got worse, how does it follow that raising taxes still more will help income inequality at all? I ask this question in all honesty.

Dan @ Casual Kitchen

[PS: The data is here: http://ow.ly/7a2r7 and here: http://ow.ly/7a2s3. The first page is from the CBO's website, the second is wikipedia data on total personal income tax reciepts. The top 1% paid 18% of about $240b in taxes in 1979 (about $43b). In the most recent year they paid 39% of about $1 Trillion in tax receipts (about $390b).]

camabron said...

Daniel, actually their taxes have fallen by a third (roughly 30%) during that same period.

camabron said...

...Daniel, their tax RATE that is. You are measuring their contributions (dollars paid) which is not the same and is misleading. Their contributions have increased naturally since their wealth has grown ten fold, but the percentage they pay has decreased by a full third. Stop kidding yourself and stop doing the bidding of the 1%. It's against your economic interests.

camabron said...

Low tax rates evidence here

Daniel said...

@camabron Don't worry, I will do my very best to avoid doing the 1%'s bidding. :)

Try not to think in static terms. Taxes are paid in dollars, and the more dollars collected the better, right? Yet 39% of a trillion (tax collected from the top 1% in 07) is WAY bigger than 18% of $240 billion (tax collected from the 1% in 1979). On every metric.

And yet this higher collection occurred in an environment with a lower top bracket. What do you think will happen when we take that top bracket and put it back to the 1979 levels?

Anyone who wants to maximize the personal income tax collections of the federal government has to grasp this. Understand your enemy my friend, or you're lost.

DK

camabron said...

Agreed. The solution, logic would indicate, lies half road: higher tax rates for the very wealthy and corporations (if not higher rates, at least their due share, not the single digit rates they currently pay), and slashing government spending (defense for example, as Ron Paul suggests).

Rufus said...

Another window into the Federal taxes, not the progressive "income tax" certain propagandists like to tout: When politicians talk about cutting "social programs" they include payroll tax items such as SS and Medicare, so let's include those taxes in the mix.

Payroll tax is why lower wage earners pay more of a percentage of their income than the super rich.

Sources of Federal tax revenue: 45% from income tax, 36% from payroll taxes. Payroll tax is the most regressive of taxes, levied on individuals at a flat rate up to 90K of income. "Taxes for Medicare, combined with periodic increases in Social Security taxes, caused payroll tax revenue to grow from 1.6 percent of GDP in 1950 to more than 6 percent since 1990."

Revenue from the corporate taxes fell from between 5 and 6 percent of GDP in the early 1950s to 2.1 percent of GDP in 2008.
http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm

Capital gains tax was $137 billion in 2007. That's at a tax rate of 15%. Tax that at 35% and you have $320 billion.
This is why the super rich such as Warren Buffet pay less of a percentage of their income in taxes than their secretaries.

http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html

Another view of the shrinking share of corporate federal taxes. Corporations went from 39% of the total in 1950 to 17% of the total in 2010.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203

Anonymous said...

"The 99 are ganging up on folk who broke the laws of the land! "

Then they could protest against the law-breakers, not '1%'. If I show statistics showing that Jews are wealthier than others on average, is that an excuse to break the windows of all Jewish houses?

Rufus said...

A good amount of the 1% benefited from the fraud and misfeasance of the financial institutions.

Financial firms rewarding failure to top executives through record bonuses, after they bankrupted these same firms? It is fruit from the Poisonous tree. Time to take it back. It's called justice.

camabron said...

Well said Rufus.

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