Myth-Busters Follow-up - Rising Tide Sinking Boats
Jeff Alworth
Last month I posted the second in my exciting series entitled "Myth-Busters" (awards pending), and as a quickie follow-up, there's a report out today that further diffuses the idea that funneling money to the ultra-rich trickles down to the rest of us. The report, analyzing IRS data, came from economists Thomas Piketty and Emmanuel Saez. They found:
- Since 2002, the top 1% has seen their inflation-adjusted incomes rise 42%. The average income for the bottom 90% has risen just 4.7%
- The share of wealth held by the top 1% increased from 15.8% in 2002 to 20% in 2006.
The top 1% haven't held that much of the nation's wealth since 1928. - The top .1% made out even better, increasing 58%, or $1.8 million, since 2002.
And have a look at this nice table at right. It shows that from 1945-'76, the per capita increases were greater than they were from '76-'96 (90% growth versus 64%) and that these gains were greater for bottom 90% of income earners. By contrast, in the current 30-year period, gains for the bottom nine-tenths of the country were only 10% in inflation-adjusted terms. For that last tenth? Growth was 232%. That's a lotta kielbasa! Lowering marginal tax rates and capital gains taxes really do make the tide rise, don't they?
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Aug 13, '08
sorry to go off topic here but do you know where i can get a copy of the 2008 democratic party platform that was approved at the committee meeting a few days ago? ABC has a very skewed version of the abortion plank and I want to read the actual text, free of corporate spin. Thanks.
Aug 13, '08
You're statistics are not that good, but you can blame the IRS for that. A better source is the (little known) Federal Reserve's Survey of Consumer Finances.
The true share of private wealth held by the top 1% of the population was pegged at 34% in 2004. That can be further emphasized if you subtract home equity wealth. In 2004, the top 1% owned 43% of "non home" wealth. The 20% you are citing is what economists familiar with these statistics call "Income Wealth." I'm not exactly sure what that means, but it's not a measure of the kind of wealth guys like Democratic Senator John D. (you might call him "Jay") Rockefeller IV have.
Aug 13, '08
YOUR statistics.... Apologies for the grammar.
6:57 p.m.
Aug 13, '08
Actually, your analysis of the improvement in the position of the top 1% over the last 30 years doubtless understates the success of that group since very few of those in the top 1% at the end of the period were probably among the top 1% at the beginning.
The growing inequality in income (real and measured) is a legitimate issue and, in my opinion, concern. Unfortunately, I don't think it lends itself to so simple an analysis as to attribute it all to changes in the tax code.
Aug 13, '08
...And total private, personal wealth in the USA is about $50 trillion (with a "T"). So the delta between 20% and 34% is mind boggling in its proportion.
Maybe it's time to start thinking in terms of a "personalty" tax, or wealth tax, over a certain threshold. The top 1% could, theoretically, pay off America's nominal national debt by themselves and still have several trillion to split.
8:04 p.m.
Aug 13, '08
Ted, you gotta offer some sources if you want to be taken seriously. I've shown mine, now let's see yours.
<h2>Jack, don't misconstrue my last snarky comment as full analysis of the cause of the declining fortunes of the middle class (read: bottom 90%). Follow the first link for a fuller take.</h2>