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Tuesday, September 18, 2012

The rich get richer, illustrated

Mitt and the boys are doing just fine. You little people who don't want to do anything with your lives, not so much. We think this chart in particular tells a story. This table, too:

Comments (24)

Clearly the 80% have been making out like bandits paying no taxes and mooching off the true "job creators." If only they paid their fair share then everything would be peachy and we would be on the road to prosperity.

Whoever said you can't squeeze blood from a turnip clearly hasn't been squeezing hard enough.

Let them eat cake.

Thanks to QE 1 and 2, anyone who has had signficant sums invested can't help but have had significant income increases. Ironically, with Obama, you'll get more of the same, while Romney has signalled that Bernanke and the currency printing presses will be among the first things to go. Go ahead, re-elect Obama, make the rich people's day -- since mostly they don't pay taxes when tax rates go up anyhow (the rich either will increasing avoid income-recognizing transactions or restructure more transactions to make them non-taxable or limit tax liability).

By the way, to actually narrow the inequality gap, adopt pro-business, pro-growth policies that get people at the bottom of the income ladder employed or fully employed.

MAYBE if we worried more about our own economic performance - instead of the economic performance of others we would all perform better economically. Envy does not serve the individual, or the masses, it only seeks to cause division, and diminishes the ability of individual, and weaken his contribution to the community.

Maybe I'm reading it wrong: didn't everybody get poorer?

I am not by any means perfect here, but I am becoming more conscious of where my dollars go to, even in small ways to support small local businesses, small cafes rather than corporate fast food or corporate coffee shops, small shops to buy a birthday card made by locals rather than cards made by huge companies, look for Made in USA and so on.


MAYBE envy has nothing to do with it. MAYBE it's about wanting to have a chance at a fair shake in life without having to be born on 3rd base ala Mittens. Unfortunately that dream is no longer a reality.


A Republican crying about "class warfare" and dividing the masses is RICH considering your party has all about exploiting division since 1968 Goldwater.

Yep, just ignore the monstrosity of wealth some are accumulating and be happy with your cable TV and iphone you ungrateful hippy.

A rising tide lifts all ships and such and such. Horatio Alger is a true American patriot and the rest of us are just whiny moochers.

Figures lie and liars figure. By my calculations, the Top 1% dropped 0.64% per year and the Bottom Quintile dropped 0.70% per year. Probably within the margin of error. Ho hum.

And, of course, over the course of years, everyone stayed in the same quintile.

Oh for goodness sake. Are you people really trying to insinuate that the real-world impact of losing 0.70% per year is the same on those in the top quintile vs. those in the bottom? Get a grip. Maybe people on the Oregonian website are that easily misled, but give the folks here more credit please.

How 'bout you all take a gander at the "Peak Year" column? I doubt there is a better illustration of failed GOP economic policy.

Looking at all the graphics and numbers it is clear that over the last 30-40 years the distribution has become increasingly top heavy.

One must then decide if that is a bad thing or a good thing.

If you like socialism, this is a good thing. In a democracy, where poor people vote, there's no quicker way to increase demand for government programs than to have a vast income gap.

Historically it doesn't even matter if the lower classes are actually doing well, it is the disparity that leads to demand for more and more social services.

Also such a disparity often leads to all kinds of strife, historically. This hasn't happened here. Not yet.

At the individual level you can call it jealousy, you can call it righteous outrage. You can call it stupid mob mentality nonsense, but doing that helps you to ignore the historical precedents.

Like it or not the people will develop a sense that things are not fair. They'll make demands that be 'more fair'. That everyone is part of the system and there is no reason for large swaths to 'struggle' while it appears that others live the good life.

Once the social programs get voted in because of this sentiment, no matter how justified the sentiment, those programs will NEVER GO AWAY. EVER.

So then the question becomes "What do we do about it?"

EDIT: I may have been mistaken when I said social strife hasn't hit the US yet. With world record proportions of our population incarcerated and a well armed and trained police force this 'strife' may have been effectively contained. For now.

Raleigh - Opportunity isn't handed to you, and NOBODY is standing in your way - If you want to aspire to be mediocre - fine, its nobody's fault but your own. YOU make your own opportunity - rich or poor - easy or difficult, it all depends upon YOU! Sure things could be easier, but its YOUR job to make the lemonade, its YOUR job aspire to new and greater challenges. I started out with nothing, made a lot of money, and now things aren't so good, but I know its all up to ME! I did it before and I will do it again.

Mark- congratulations on your successful career as a motivational speaker. Unfortunately I don't have the funds to attend one of your life changing seminars but kudos all the same.

Raleigh - Sure make fun of me, but is really does come down to you, sure blame it on me, or on the world around you, but you are your own worst enemy. I'm starting over again, and I will win, I guarantee I will win, honestly and due to my own hard work!

So if it's all you, who's buying your lemonade?

All of you "pull up your bootstraps for guaranteed success!" folks might want to give The Jungle a quick read.

One problem with this kind of portrayal of is it shows income distribution at a single point in time. But for many households, income changes over time. The low-paying jobs from high school days usually give way to better-paying jobs later in life. For example, nearly 58 percent of the households in the lowest income quintile in 1996 moved to a higher category by 2005 (most recent figures I could find). The reverse also happens. Of those households that were in the top 1 percent in income in 1996, for example, more than 57 percent dropped to a lower income group by 2005.

Bottom line, the groups your chart compares are composed largely of different people.

The top 10% of incomes earned 43% of the income, and paid 71% of all the federal income taxes.

Clearly, our societal problems would all be solved if we could get the top 10% of the population to pay 90% of the federal income taxes.

"Surely you don't believe that income taxes are the only form of taxes people pay."

Of course not - Social Security and Medicare taxes are quite high (particularly when you consider that you employer has to pay Social Security and Medicare, which likely reduces the amount of money your employer is willing to pay you).

Of course, Social Security and Medicare are marketed as social insurance programs, not mere income transfer programs. All the rest of the Federal government is overwhelmingly paid for by high-income individuals.

You are also forgetting things like Excise taxes which constitute a much larger percentage of a low income worker's income than someone in the top 1%.

As the chart I linked shows, people pretty much pay in taxes the percent of income they earn as a percent of total income. This myth of 47% of the population that gets a "free ride" is just that- a myth. Of course they aren't paying as much in total dollars because they are making as much.

If we truly wanted to make taxation as "fair" as possible in a bootstrap make your own way sense we would reinstitute the estate tax but that's another discussion. Also, corporations should stop hoarding their profits overseas and start repatriating it as corporate taxes have declined as a percentage of total revenues thanks to corporate tax holidays that have become more like corporate tax permanent leaves of absence. Instead, it's easier to blame the $10 an hour gas station attendant or Subway employee who "doesn't pay anything" and "has no skin in the game."

The big question is what is income? For somebody working for somebody else, that is fairly easy to determine.

For a person with "independent means", income is how you manipulate the numbers and your ability to hide your assets.

If we truly wanted to make taxation as "fair" as possible in a bootstrap make your own way sense we would reinstitute the estate tax but that's another discussion.

Confiscation of one's property when the die is not "fair" in any sense of the word.

MJ- I wasn't aware that dead people still owned things. It's fine to have some exemptions to protect widowers and children and leave a little something behind to progeny but eliminating the tax altogether in our time of fiscal crisis is a travesty.

There is a reason that aristocracies were overthrown back in the day but it appears you want to return to the days of the landed gentry. That's not a principal that I think America was founded on.

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