Redistribution of wealth: New figures.

[Openmind]

New CBO Report Reaffirms the Growth of Income Inequality in AmericaBy Phil Scarr On October 25, 2011 The Congressional Budget Office just released a report which shows yet again the growth of inequality in America. We have become a class-based society.
For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007 (see Summary Figure 1).

•For others in the 20 percent of the population with the highest income (those in the 81st through 99th percentiles), average real after-tax household income grew by 65 percent over that period, much faster than it did for the remaining 80 percent of the population, but not nearly as fast as for the top 1 percent.
•For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent.
•For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.
As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979: The share of income accruing to higher-income households increased, whereas the share accruing to other households declined. In fact, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent.

What’s really depressing about this is that American’s don’t understand how unequal America has become. A study by Michael Norton surveyed Americans on the question of what they think inequality is and what they think it should be. His results were startling.



Notice the variation between Ideal and Actual. And the startling line that shows how deluded Americans are as to the real distribution of wealth in the nation.

I challenge anyone to argue that this level of inequality is a good thing for America.

 

[clarkatticus]

The argument would be that it is class warfare and that those in the top 20% earned and deserves all that money. but money is more than just liquid assets, it is the accrued wealth and assets of a whole nation and the power that goes with it. What we are in fact saying is that this 1% to 20% by way of accumulating large wealth now are de facto the ruling class of this nation, the rest of us undeserving of input because we were simply unable for whatever reason to display the necessary amount of wealth. We don't deserve comparable health care, adequate legal representation, working conditions or political representation. All because these wealthy persons are more deserving than us.

 

[Openmind]

The argument would be that it is class warfare and that those in the top 20% earned and deserves all that money. but money is more than just liquid assets, it is the accrued wealth and assets of a whole nation and the power that goes with it. What we are in fact saying is that this 1% to 20% by way of accumulating large wealth now are de facto the ruling class of this nation, the rest of us undeserving of input because we were simply unable for whatever reason to display the necessary amount of wealth. We don't deserve comparable health care, adequate legal representation, working conditions or political representation. All because these wealthy persons are more deserving than us.

You're right, as usual!
Nice to see you back here. . .it gets lonely posting among people who seem to be living in an alternate reality!

 

[PLC1]

I challenge anyone to argue that this level of inequality is a good thing for America.

Oh, surely someone will rise to that challenge.

 

[dogtowner]

Oh, surely someone will rise to that challenge.

One would have to accept that the premise was valid to do so.

 

[BigRob]

New CBO Report Reaffirms the Growth of Income Inequality in AmericaBy Phil Scarr On October 25, 2011 The Congressional Budget Office just released a report which shows yet again the growth of inequality in America. We have become a class-based society.
For the 1 percent of the population with the highest income, average real after-tax household income grew by 275 percent between 1979 and 2007 (see Summary Figure 1).

•For others in the 20 percent of the population with the highest income (those in the 81st through 99th percentiles), average real after-tax household income grew by 65 percent over that period, much faster than it did for the remaining 80 percent of the population, but not nearly as fast as for the top 1 percent.
•For the 60 percent of the population in the middle of the income scale (the 21st through 80th percentiles), the growth in average real after-tax household income was just under 40 percent.
•For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.
As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979: The share of income accruing to higher-income households increased, whereas the share accruing to other households declined. In fact, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent.

What’s really depressing about this is that American’s don’t understand how unequal America has become. A study by Michael Norton surveyed Americans on the question of what they think inequality is and what they think it should be. His results were startling.



Notice the variation between Ideal and Actual. And the startling line that shows how deluded Americans are as to the real distribution of wealth in the nation.

I challenge anyone to argue that this level of inequality is a good thing for America.

I always ask you this, and you never answer it....but here it is again.


If all the "rich" people in the United States suddenly moved all of their money overseas, would any of us be better off? On paper it would even the wealth disparity etc, but would it actually mean anyone is better off?

 

[GenSeneca]

Oh, surely someone will rise to that challenge.

There isn't an argument to argue against... There is only a fallacious premise that is directly contradicted by the data provided.

The fallacious premise is that of wealth being a zero sum game. The title of the thread reveals this is how Open views wealth, not as something capable of being created and grown but some static amount that simply gets redistributed from one person to another - like chips in a poker game.

From the data, the top 20% saw their income GROW by 65%, the middle quintile saw their income GROW by 40%, and the bottom 20% saw their income GROW by 18%. Notice that ALL income GREW? This obliterates the argument that wealth was redistributed, i.e., stolen by the top 20% at the expsense of the bottom 80%.

Now, PLC, lets talk about an hypothetical income gap between yourself, Dogtowner and me...

For the sake of this example, PLC is the top 20%, he can afford to put $10,000 into an hypothetical account that earns 2% interest annually. Dogtowner, will represent the middle class, he can afford to put $1,000 into the same type of account. I'll be the the bottom 20%, and I can only afford $100 for such an account.

After the first year, PLC will have "earned" $200, Dogtowner will have "earned" $20, and I will have "earned" $2.

AN INCOME GAP!

Obviously PLC has "STOLEN!" prosperity from Dogtowner and myself, otherwise there would be no income gap...

It would all be very comical if not for the fact that such people vote like-minded morons into office who then make public policy based on this nonsense.

 

[dogtowner]

There isn't an argument to argue against... There is only a fallacious premise that is directly contradicted by the data provided.

The fallacious premise is that of wealth being a zero sum game. The title of the thread reveals this is how Open views wealth, not as something capable of being created and grown but some static amount that simply gets redistributed from one person to another - like chips in a poker game.

From the data, the top 20% saw their income GROW by 65%, the middle quintile saw their income GROW by 40%, and the bottom 20% saw their income GROW by 18%. Notice that ALL income GREW? This obliterates the argument that wealth was redistributed, i.e., stolen by the top 20% at the expsense of the bottom 80%.

Now, PLC, lets talk about an hypothetical income gap between yourself, Dogtowner and me...

For the sake of this example, PLC is the top 20%, he can afford to put $10,000 into an hypothetical account that earns 2% interest annually. Dogtowner, will represent the middle class, he can afford to put $1,000 into the same type of account. I'll be the the bottom 20%, and I can only afford $100 for such an account.

After the first year, PLC will have "earned" $200, Dogtowner will have "earned" $20, and I will have "earned" $2.

AN INCOME GAP!

Obviously PLC has "STOLEN!" prosperity from Dogtowner and myself, otherwise there would be no income gap...

It would all be very comical if not for the fact that such people vote like-minded morons into office who then make public policy based on this nonsense.

alright PLC... GIMME !

 

[Openmind]

I always ask you this, and you never answer it....but here it is again.


If all the "rich" people in the United States suddenly moved all of their money overseas, would any of us be better off? On paper it would even the wealth disparity etc, but would it actually mean anyone is better off?

Come on Rob. . .they wouldn't do that for the simple reason that they WOULDN"T get as good of a deal on taxes any place else than in the States! AND they would still have to pay US taxes as expatriates!

And, you have never answer the question: Where does that widening of the income inequality stops? When do the wealthy have enough, and start looking at what their continued grab for more wealth does to this country, to the people of this country?

You asked before when I (and people like me) would be satisfied that the tax was fair. . .you even suggested (if I remember correctly) 70%!

Which I said was stupid, because that is certainly NOT what is being proposed by anyone. . .But, whe will the wealthy be satisfied that they pay small enough taxes? When will the wealthy worry about the destruction of the Middle class, our infrastructure, our schools, our health care?

Or is it that, since they can fly their private plane OVER the destruction of our infrastructure they don't care? Or they can send their kids to private schools, so they don't care, or they can afford cadillac health care plans so they don't care?

Well, at least some of them care!

 

[Openmind]

There isn't an argument to argue against... There is only a fallacious premise that is directly contradicted by the data provided.

The fallacious premise is that of wealth being a zero sum game. The title of the thread reveals this is how Open views wealth, not as something capable of being created and grown but some static amount that simply gets redistributed from one person to another - like chips in a poker game.

From the data, the top 20% saw their income GROW by 65%, the middle quintile saw their income GROW by 40%, and the bottom 20% saw their income GROW by 18%. Notice that ALL income GREW? This obliterates the argument that wealth was redistributed, i.e., stolen by the top 20% at the expsense of the bottom 80%. Now, PLC, lets talk about an hypothetical income gap between yourself, Dogtowner and me...

For the sake of this example, PLC is the top 20%, he can afford to put $10,000 into an hypothetical account that earns 2% interest annually. Dogtowner, will represent the middle class, he can afford to put $1,000 into the same type of account. I'll be the the bottom 20%, and I can only afford $100 for such an account.

After the first year, PLC will have "earned" $200, Dogtowner will have "earned" $20, and I will have "earned" $2.

AN INCOME GAP!

Obviously PLC has "STOLEN!" prosperity from Dogtowner and myself, otherwise there would be no income gap...

It would all be very comical if not for the fact that such people vote like-minded morons into office who then make public policy based on this nonsense.

Link for the highlighted data?

 

[BigRob]

Come on Rob. . .they wouldn't do that for the simple reason that they WOULDN"T get as good of a deal on taxes any place else than in the States! AND they would still have to pay US taxes as expatriates!

"If" they would do it or not is not the issue, the question is if they did, and on paper we have suddenly closed the wealth gap significantly...is anyone actually any better off? I think the answer is clearly no...which makes me think the whole debate is arbitrary.

And, you have never answer the question: Where does that widening of the income inequality stops? When do the wealthy have enough, and start looking at what their continued grab for more wealth does to this country, to the people of this country?

If all people are seeing their incomes rise (as you posted was true in your original statement), then what is the issue?

You asked before when I (and people like me) would be satisfied that the tax was fair. . .you even suggested (if I remember correctly) 70%!

I have indeed ask what is a "fair" rate, but I never suggested 70% that I can recall...If I did it was probably a statement like "how much is fair -- 50%, 60%, 70%?" or something like that.

Which I said was stupid, because that is certainly NOT what is being proposed by anyone. . .But, whe will the wealthy be satisfied that they pay small enough taxes? When will the wealthy worry about the destruction of the Middle class, our infrastructure, our schools, our health care?

When will the middle class start worrying about those things? At least more than simply saying "oh, we should spend more on that...as long as someone else spends it."

Or is it that, since they can fly their private plane OVER the destruction of our infrastructure they don't care? Or they can send their kids to private schools, so they don't care, or they can afford cadillac health care plans so they don't care?

Well, at least some of them care!

I think most rich people do care...they just ask the legitimate question of "why does the entire burden of this fall to me...especially if this is some critical national issue that we all need to come together for?"

 

[PLC1]

There isn't an argument to argue against... There is only a fallacious premise that is directly contradicted by the data provided.

and yet, you did argue against that non argument.

So, you think that, if the growing disparity of wealth is not good for the country, it's at least neutral.

And you seem to think that the total wealth of the nation has increased. Were that so, then you would have an excellent argument against that non argument.

 

[Openmind]

"If" they would do it or not is not the issue, the question is if they did, and on paper we have suddenly closed the wealth gap significantly...is anyone actually any better off? I think the answer is clearly no...which makes me think the whole debate is arbitrary

.

You're wrong again. If you had taken the time to listen to the lecture about "income inequality" (a video posted as OP in its own thread in the last couple of days), you would know that it shows that, across the world, income inequality is negative for every population group, including the wealthy. AND that the TOTAL WEALTH of a country (at least in the developped countries) is less important in determining general wellbeing (including each individual criterias) than the income inequality. But, obviously, you were not interested in listening to a serious, academic lecture about a subject that you do not believe in or care about!

If all people are seeing their incomes rise (as you posted was true in your original statement), then what is the issue?

You are missing the point: Go back and read it again, and see what the "growth in income" was for each quintile of population. . .the top quintile rose by 250%. And here is a copy of another paragraph in that OP that you seem to have totally missed or have chosen to ignore:

"As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979: The share of income accruing to higher-income households increased, whereas the share accruing to other households declined. In fact, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent."

I have indeed ask what is a "fair" rate, but I never suggested 70% that I can recall...If I did it was probably a statement like "how much is fair -- 50%, 60%, 70%?" or something like that.

As I said, I didn't remember the "exact" number, but I knew it was a ridiculously high number that NO ONE has ever mentionned (although it was higher than that in from the 60's to the 80's!

When will the middle class start worrying about those things? At least more than simply saying "oh, we should spend more on that...as long as someone else spends it."

You are living in a dream world. .with little to do with what the average person experiences every day. The middle class IS worrying about the spending. ..especially the huge spending to support the corporate greed, the military might, and the do nothing Congress!

I think most rich people do care...they just ask the legitimate question of "why does the entire burden of this fall to me...especially if this is some critical national issue that we all need to come together for?"[/QUOTE

]


The "entire burden????" Are you for real?

Do you think that the poor and the lower middle class are living a life with NO BURDEN? Do you think that the taxes they pay just to SURVIVE is not a much heavier burden to them than a $100,000 tax bill would be for someone making $10 millions?

Maybe the "burden" the wealthy are worried about is the burden of wealth. . how to keep it and how to grow it further, no matter if the rest of the American population loses!
I did say that all wealthy people are not ignorant about the "burden" of the poor! In fact, you may want to look at the organization "Conscious Capitalism," that clearly demonstrate that some VERY Successful people understand that run away capitalism and never satisfied greed is WRONG, morally wrong, and not even good for business!

 

[Openmind]

One would have to accept that the premise was valid to do so.

Why don't you explain what the premise of this chart is all about. . .try to spin it!

 

[BigRob]

.

You're wrong again. If you had taken the time to listen to the lecture about "income inequality" (a video posted as OP in its own thread in the last couple of days), you would know that it shows that, across the world, income inequality is negative for every population group, including the wealthy. AND that the TOTAL WEALTH of a country (at least in the developped countries) is less important in determining general wellbeing (including each individual criterias) than the income inequality. But, obviously, you were not interested in listening to a serious, academic lecture about a subject that you do not believe in or care about!

Again...you simply take your side as gospel and discount all other positions.

There is a study out of the Adam Smith Institute in London that address this very issue. You can find it here.

From a Washington Times article about such study:
Income inequality can easily increase in societies in which everyone, including the very poorest individuals, is becoming better off. In the United States, as well as in Europe, indicators of income inequality have grown during the past 30 years. Yet this rise is just an artifact of the inappropriate use of income as a measure of welfare. In real terms, the poorest members of Western societies are better off than they were 30 years ago.

Much of that has to do with the rise of cheap imports from countries such as China and new forms of large-scale retailing, epitomized by Wal-Mart and Sears, which have given the low-income groups access to goods that previously were enjoyed only by the rich. In terms of the actual material conditions of living, developed countries appear to be more equal than ever before.

Data reveal that inequality in subjective life satisfaction is not on the rise, either. Bill Gates‘ net worth might be higher by a factor of 5 million compared to that of the average American family. However, in spite of his wealth, he certainly is not 5 million times happier than a typical American.

You are missing the point: Go back and read it again, and see what the "growth in income" was for each quintile of population. . .the top quintile rose by 250%. And here is a copy of another paragraph in that OP that you seem to have totally missed or have chosen to ignore:

No...you are missing the point. Can you accept that on paper income inequality can rise, and yet all people can be vastly better off?

"As a result of that uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979: The share of income accruing to higher-income households increased, whereas the share accruing to other households declined. In fact, between 2005 and 2007, the after-tax income received by the 20 percent of the population with the highest income exceeded the aftertax income of the remaining 80 percent."

So this is simply about "income growth"...by your own words....so as I said originally, it seems you are upset that the share of growth is slowing for certain groups...however the does not negate that there is growth, and they are better off.

As I said, I didn't remember the "exact" number, but I knew it was a ridiculously high number that NO ONE has ever mentionned (although it was higher than that in from the 60's to the 80's!

And as I said, I am pretty sure I never said that to begin with...however you keep dodging my question of "you always talk about a 'temporary' tax increase, when is it that you see this ending?"

You are living in a dream world. .with little to do with what the average person experiences every day. The middle class IS worrying about the spending. ..especially the huge spending to support the corporate greed, the military might, and the do nothing Congress!

The middle class is indeed worrying about the spending...they just want someone else to pay the bill to bail them out. How about a little "shared sacrfice"?

The "entire burden????" Are you for real?

Was there a tax increase proposed on the Middle Class that I was unaware of?

Do you think that the poor and the lower middle class are living a life with NO BURDEN? Do you think that the taxes they pay just to SURVIVE is not a much heavier burden to them than a $100,000 tax bill would be for someone making $10 millions?

All people have burdens in their lives. Do you think "rich" people have no burden? Does a CEO who is responsible for 10,000 employees jobs carry no burden?

Maybe the "burden" the wealthy are worried about is the burden of wealth. . how to keep it and how to grow it further, no matter if the rest of the American population loses!

Yes..the poor "lose" by having their incomes grow.

I did say that all wealthy people are not ignorant about the "burden" of the poor! In fact, you may want to look at the organization "Conscious Capitalism," that clearly demonstrate that some VERY Successful people understand that run away capitalism and never satisfied greed is WRONG, morally wrong, and not even good for business!

Greed is good...you can attempt to change that all you want, but there is no system devised that is better. Milton Friedman said something along the lines of if you look where people are the worst off, it is in places where they attempt to control market forces and not let greed work.