U.S. income gap widens, richest share hits record

[UpInArms]

Source: Reuters

WASHINGTON (Reuters) - The gap between America's richest and poorest is at its widest in at least 25 years, with the wealthiest taking home a record share of the nation's income that exceeds even the previous high in 2000.

According to recent data from the Internal Revenue Service, the richest 1 percent of Americans earned 21.2 percent of all U.S. income earned in 2005. That is a significant increase from 2004 when the top 1 percent earned 19 percent of the nation's income.

The previous high over the past 25 years, when such data were compiled, was in 2000 when a bull market brought the figure up to 20.81 percent.

The Tax Foundation, a nonpartisan tax research group based in Washington, said the wealthy benefited in 2005 from a healthy, growing economy and higher-than-average price inflation.

The IRS data included all of the 132.6 million tax returns filed in 2005 with a positive adjusted gross income, or AGI, also including people who did not earn enough to owe taxes.

Read more: http://www.reuters.com/article/domesticNews/idUSN1241503820071012

[lonestarnot]

1. I think we should recruit some modern day Robin Hoods to office.

[ThomCat]

2. Every non-millionare who votes republican

is a damned fool.

And any non-millionare who doesn't evaluate the democratic candidates for pro-corporate, pro-wealthy biases is also a damned fool.

It's time to start taxing unearned income at higher rates than earned income. The investing class should learn that hoarding wealth is a privilage, not a right.

[Mountainman]

3. Is Rush giving this news to his ditto heads today?

According to this close to half of those filing income tax returns with AGI paid no tax using deductions. Now the poor don't have deductions so who were these folks. I'll wait and see if Rush will tell us.:sarcasm:

[Quantess]

4. Rich were already getting richer and poor were already getting poorer when I was 13 years old.

Reagan had only been in office a few years before we started to see the income gap widen. (For the younger DUers out there, Reagan was first elected in 1980.) The rich-poor disparity has sometimes slowed in growth since Reagan, but the gap has been growing over the years.

[FatDave]

5. Absolutely right

This all started with Reagan. The Economic Recovery Tax Act of 1981 cut the top bracket tax rate from 70% to 50%, and the bottom rate from 14% to 11% over 3 years. 20% cut for the rich, 3% cut for the poor. Funny how that worked.

But if that wasn't enough, 5 years later came The Tax Reform Act of 1986. This cut the top rate from 50% to 28% and...wait for it...raised(!) the bottom rate to 15%, which is higher than when Reagan took office.

So over the course of about 7 years, the richest Americans went from being taxed at 70% to 28% and the poorest from 14% to 15%. And around that time we started seeing the gap between rich and poor grow rapidly.

Clinton slowed things a bit with the Omnibus Budget Reconciliation Act of 1993, which raised the top rate to 39% among other things. But that's still nowhere near the pre-Reagan 70% level, then W came along and cut that back to 35% anyway.

We really need a new new deal in this country. Shame none of our elected officials have the guts to say anything even close to that.

References:
http://en.wikipedia.org/wiki/Economic_Recovery_Tax_Act
http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986
http://en.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993
http://en.wikipedia.org/wiki/Economic_Growth_and_Tax_Relief_Reconciliation_Act_of_2001

[Flirtus]

8. Post of the Year Winner!

This is what it's all about, thanks for the succinct message I'll use again and again!

[FatDave]

14. Wow, thanks!

I can't say I agree with you, but I appreciate the kind words just the same.

[donkeyotay]

10. More fuzzy republican math. Cut the rate from 14% to 11%, and then

raise it to 15% when nobody is looking and proclaim a tax cut. That's the same rate those hedge fund managers making over a billion a year are paying. It could certainly be argued - as we witness the latest evidence of corruption in the markets - that those who make their living off those casinos should pay, if for no other reason, the taxes necessary to regulate them and provide bailouts periodically.

[Union Thug]

6. Time to bring back the guillotine.

Just saying...

[1932]

7. Mission accomplished.

[bdamomma]

9. let those 1% roll in it, every dog has its day, and they should

not be so confident to screw everyone else.

[CatholicEdHead]

11. How does this compare to the 1920's?

[fascisthunter]

12. Regardless of Anyone's Background

this should tell folks that their is one consistant trend in the US and around the World: the Wealthy get wealthier and everyone else can go to hell.

Wake up America!

[fencesitter]

13. Hurry up and kill the inheritance tax...

So the "death tax" won't wipe out their hard earned estate.