This is just crazy. Just the increase in income for the top 1% is more than the total income of the bottom 20% from 2003-2005. Something fundamentally wrong with the structure of an economy that generates #s like this. Chasm widens between rich and poor in U.S. By David Cay Johnston Sunday, December 16, 2007 NEW YORK: The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office show. The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher. The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the 3 million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed. The report is the latest to document the growing concentration of income at the top, a trend that President George W. Bush said last January had been under way for more than 25 years. Earlier reports, based on tax returns, showed that in 2005, the top 10 percent, top 1 percent and fractions of the top 1 percent enjoyed their greatest share of income since 1928 and 1929. The budget office report takes into account a broader definition of income than tax returns; it is known as comprehensive income. It includes untaxed Social Security benefits, welfare, food stamps and part of the value of Medicare benefits, giving a fuller picture of incomes at the bottom than the tax data. Much of the increase at the top reflected the rebound of the stock market after its sharp drop in 2000, economists from across the political spectrum said. About half of the income going to the top 1 percent comes from investments and business. In addition, Congress in 2003 cut taxes on long-term capital gains and most dividends, which advocates said would encourage people to turn untaxed wealth into taxable income. Some economists have said that the increase in incomes at the top is illusory and is in good part simply converting untaxed assets into taxed income to take advantage of reduced tax rates. The Congressional Budget Office report made no attempt to explain the increases in income in its annual report on effective federal tax rates paid by people at different income levels. Asked how much of the increase at the top was from the tax cuts rather than market gains, Peter Orszag, the budget office director, said, "I can't give you an answer to that because we just don't know." Chris Frenze, Republican staff director for the Congressional Joint Economic Committee, said the increase in top incomes is much more modest if viewed over longer time periods. Since 2000, he said, the average income of the top 1 percent has risen $97,900, or 6.7 percent, the same percentage increase this group had from 1992 to 1997. Jared Bernstein, an economist at the Economic Policy Institute in Washington who characterizes the Bush administration's policies as "yo-yo" economics, an abbreviation of You (Are) on Your Own, said the differences in income growth explained why so many Americans have told pollsters that they are feeling squeezed. "A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all," Bernstein said. "It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone." At every income level, Americans had more income, after adjusting for inflation in 2005, than in 2003, but the increases ranged from almost imperceptible for the poor to modest for the middle class and largest for those at the top. On average, incomes for the top 1 percent of households rose by $465,700 each, or 42.6 percent after adjusting for inflation. The incomes of the poorest fifth rose by $200, or 1.3 percent, and the middle fifth increased by $2,400 or 4.3 percent. The share of all federal taxes paid by the top 1 percent grew, but only slightly more than half the rate of their growth in incomes because of the tax rate cuts. The top 1 percent paid 27.6 percent of all federal taxes in 2005, up from 22.9 percent in 2003, while the share paid by the middle fifth of taxpayers declined to 9.3 percent from 10 percent in 2003. The share of income that the top 1 percent paid in income taxes and all federal taxes fell. The total tax rate dropped 1.8 percentage points, to 31.2 percent, from 2003 to 2005 while the average income tax rate for the top 1 percent declined one percentage point, to 19.4 percent, largely because of the cuts in taxes on capital gains and dividends. http://www.iht.com/bin/printfriendly.php?id=8762568
So what is your solution, communism? I guess when you aren't in the top tier, you blame the system. The problem with that is that this is America, land of opportunity. Everyone has a chance. What you make of that chance, is on you. The top 1% of wage earners pay close to 40% of ALL TAXES. So money is already being funneled from the successful to the poor.
A government that represents all the people instead of one that is beholden to who can give the most money would be a good start. But that means everyone... 99.9%... has to vote to diminish the cash of special interests... which is, of course, one of the reasons the modern Republican party invests so much time and effort in keeping the vote down.
HA! I love the selectively picked dates he used. Let's include the stock market crash in our time frame, but lets take out the huge stock market run up in 1998-1999. "If we take out the years incomes likely increased the most, then the income hasn't increased that much!" Nice spin.
Well, many of the people on the bottom voted in these congress and president didn't they? If they think abortion and gun rights and what ever are more important than their living standard, what more can you say? I know if I am rich I would vote for Bush and twice on Sundays.
So how do you decide who is selectively picking dates? Also, the market has been performing badly this year and probably next and I bet incomes our closer. Maybe we should run our economy into the ground so things look fairer.
So there is no middle ground betwwen communism and this? I would support moving closer to European style government but not all the way.
hello!!!! the same top 1% suffered during the crash since they are heavily invested. the stocks rebounded so they being heavily invested also did. you can't ignore half of the equation.
The whole article is a red herring. I prefer equality of opportunity, even if there are some who advance more (and these same people may have started at the bottom, by the way).
no fair! someone has more than me quit, someone do something for me because i dont want to improve myself
Exactly. The author barely acknowledges the fact that every income bracket has increased wealth while doing his dead-level best to convince the reader that since the wealthy are doing better, he or she must be doing worse. Class envy in this country is stupid. Overwhelmingly, the wealthy in this country are the hardest-working, most innovative, and biggest risk-takers. It's as true now as ever.
Yes - I know. He took 1992-1997 and 2000-2006 in order to make the former and latter look equal for the wealthy. But what he did was include a market crash in the latter, and take out a market jump in the former. If you took 1994-1999 and 2000-2006, you'd likely show a much bigger jump in the first one. If you took 2000-2002 and 2003-2005, you'd see a much bigger jump in the latter. It all just depends on what you want to show. The GOP guy quoted wanted to show that the gap is the same pace as in the past, so he picked his dates selectively. What I found humerous was that, to do so, he had to take two years out of the mix that had huge income growth for the wealthy. At least pick consecutive time periods. Ultimately, it's a trend that's been going for a long-time. What would be most helpful is to see if that pace is accelerating or decelerating and how that has trended over time, and compare it to changes in tax policy or government spending policy or whatnot.
I was reading that all recent numbers show that the US is now lower in regards to economic movement. I can't remember the specifics and the US is still better than most but "the land of opportunity" mantra apparently doesn't fit anymore.
So using an analogy to confirm the class warfare proponents' line of thinking, when Shaquille O'Neal misses a free throw, it's the NBA's fault for putting a system in place that isn't fair. It's not Shaq's fault for not preparing himself to make free throws or actually performing. Great, thanks.
