Meet the 20 Percent: Wealthy Social Liberals Standing Against Efforts to Fight Income Inequality

[xchrom]

http://www.alternet.org/20-percent-americans-earn-more-250000



You’ve heard about the one percent. Now how about the twenty percent?

The Associated Press’ Hope Yen has a detailed look at the twenty percent of adult Americans who may pose a barrier to lessening income inequality. While these people are socially liberal, they don’t want their taxes raised in an effort to reduce inequality. In the years 2007-2009--a time when many Americans saw their paychecks decrease--twenty percent of working-age Americans saw their salaries stay the same or rise.

Defined as making $250,000 a year or more for at least one year in their lifetime, the twenty percent’s members include older professionals, educated singles and working married couples. Making at least $250,000 a year puts them in the top two percent of earners, though they are also operating in a fragile economy that could easily jolt them out of their comfortable position.

This group of people is less likely to support public assistance programs. According to a Gallup poll released in October, 60 percent of those who earned $90,000 or more said average Americans had a lot of opportunities to get ahead. At the same time, many support the Democratic Party, though Mitt Romney garnered 54 percent of their votes. That fact may temper Democrats’ willingness to air full-throated populism.

“For the Democrats' part, traditional economic populism is poorly suited for affluent professionals,” Alan Abramowitz, a professor at Emory University who focuses on political polarization, told the AP.

[badtoworse]

1. I would say the problem lies in how the money is spent.

I'll suggest that this group opposes spending the increased revenue in ways that do not demonstrably reduce government dependency. If you can't convince this group the government is doing more than handing out checks, they won't support it. Increasing the number of public sector jobs would also be a tough sell.

If the spending led to substantial job growth in the private sector, I believe it would garner a lot more support.

[surrealAmerican]

2. Are they even talking about the same people here?

There will be some overlap, but people who have one year of windfall earnings, people who earn $90,000 or more, and people whose incomes increased between 2007 and 2009, would seem to be three different groups.

[n2doc]

6. This is part of the BS meme that "20%" are rich

It has been going around this week. Some doofus tried to make the point that at some time in a persons life, about 20% of the population makes over 100K. How that is 'rich' is beyond me. All one has to do is look at the income tax numbers to know who is rich and who isn't.

[JHB]

3. This is why defining 'rich' as $250K income undercuts arguments about taxation

By putting orthodontists in the same tax boat as the Koch brothers, Wall Street private equity managers, and other super-high income people it acts as a political shield against raising rates at the top. Especially since the people with ~$250K incomes will feel the effect more because they have less ability to restructure their finances to lower their effective tax to compensate.

I try to call attention to how the distribution of tax rates has changed over time, not simply focus on the top rate. In 1955 there were 24 tax brackets. When the bracket levels are adjusted for inflation:
16 of them affected only taxable income above $250K (two thirds!)
11 of those affected only taxable income above $500K
The top rate kicked in on income above ~$3.5 million

Today, after the increase in top rate during the president's first term, there are:
2 brackets that affect only taxable income above $250K, and
0 that affect only taxable income above $500K.
I don't have the top bracket threshold at my fingertips right now, but it's somewhere in the $400-somethingK range.

With that bit of perspective, discussions of "should we raise rates on the rich" focus where it's really needed: the super-high incomes at the top.

[Scuba]

4. +1 We should tax the super rich until they're only fabulously wealthy.

[stevenleser]

5. Well said. Occupy had it right. Its the policies regarding the wealthiest 1% that are at issue. nt