the rich get richer, the public gets poorer

[hfojvt]

so what else is new, eh?

But I have been going through some IRS stats from table 5 here http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html

Here is a summary.

In 1986, the top 1% had 11.299% of all income. In 2006, they had 22.062%. In order to be in the top 1% you need a household AGI of $388,806.

In 1986, the bottom 50% had 16.661% of all income. In 2006, they had 12.515%. In order to be in the bottom 50% you need a household income of less than $31,987. In 1986, that number was $15,786. But in 2006 dollars, that 1986 number is $31,823. Thus, in real terms, the bottom 50% has only gained $164 in twenty years. The lower income of the top 1% has gone from $218,543 to $388,806 - a gain of $170,263. Their average gain was no doubt much higher since their total income went from $524.48 billion in 1986 (in constant 2006 dollars) to $1,791.886 billion in 2006. It more than tripled, while total income for the bottom 50% went from $773.55 billion to $1,016 billion in 2006 - a gain of only 31%, which is even smaller if you consider that population grew by 22.2% between 1990 and 2007, and by 24.6% from 1980 to 2000. (at this point I cannot find population figures for 1986 and 2006.)

The tax side is quite astounding as well. In 1986, the top 1% paid an average tax rate of 33.13%. This fell to 26.4% in 1987 (thanks to the Gipper) and to a low of 23.246 by 1990. It climbed to 25.05% in 1992 and to 28.01 in 1993 and was over 27% until 2002 when it was 27.248%. Then it went to 24.31% to 23.49% to 23.13% and finally to 22.79% in 2006.

The revenue that could have been taken in if tax rates on the top 1% had stayed the same is a staggering $1.287 Trillion. But 43.8% of that comes from just the last 4 years 2003, 2004, 2005 and 2006, and probably continues into 2007, 2008, 2009 and 2010.

Of course, to the David Koch types (of Americans for Prosperity), those lower tax rates for the rich have created prosperity. The data, however, shows that the prosperity has been created mostly for the prosperous. As their share of the pie has gone from 11.3% to 22%. Which is why that organization really needs to be called "Americans for the Prosperous".

[Goldstein1984]

1. Revolution is the solution

Fortunately for the Few, the Many are more concerned with reality television than with reality itself.

Imagine the impact if the Many became just self-aware enough to organize and do something as simple as boycott all nonessential spending for one year. In an economy based 70% on consumption, and in a world economy where American consumption is still a major factor, we could bring the Few to their knees.

[hfojvt]

7. I don't think that is much of a solution

a much less violent answer would simply be reversing the Bush tax cuts for the top 1% with the long term goal of getting the top rate back up to at least 50%.

[Goldstein1984]

8. I don't think holding our breaths while waiting for either solution

is a good idea.

[readmoreoften]

16. "Simply" doing that obviously isn't possible. Hence the need for revolution.

Health insurers killing 43,000 Americans a year is violent. There isn't much about this system that isn't violent. And I suspect the rich will be the ones to initiate the violence. Unfortunately, we aren't even close to being ready to fight a 2nd revolution. Not even close.

[hfojvt]

19. I don't think there is anything violent about indifference

it's what we all do. I was sorta hit by an example when Osawatomie got flooded. http://www.kmbc.com/news/13637920/detail.html
Hundreds of people suffered devastating losses there. I rented a car and went down to help out a couple of days. The same day I was doing that my brother and sister, who live nearby, were going boating on a local lake.

They were like most people. They went on with their lives and ignored the suffering of their neighbors of within a hundred miles.

Other examples abound. My neighbor's house started on fire. It turned out, I hear, that they had no heat and the kids there were trying to use candles or other combustibles to keep warm and the fire got out of control. Nobody got hurt, but there I was, clueless as to the fact of my neighbors not having any heat.

But I don't think that indifference is violent, even if it had turned out that all those kids died in the fire.

I think it would be totally foolish for the rich to initiate violence in order to avoid higher taxes. In many ways, the Clinton years were better for the rich than the Bush years. The bottom of the 1% grew from $261,383 in 1992 to $366,967 in 2000. A gain of $105,000 in 8 years. Then there were the Bush years. From 2000 to 2006, that level only grew from 366,967 to $388806. A gain of less than $22,000 in six years.

Their total wealth grew from $523,586 in 1992 to $1,336,773 in 2000. A 155% growth rate. From 2000 to 2006 it only grew to $1,791,886 a mere 34% growth rate. They gained $68.79 billion in 2002 compared to $136.3 billion in 1997. $136 billion at a 28% tax rate is still better than $69 billion at a 22% tax rate. No matter how much you hate taxes, $97.9 is better than $53.8. True, the rich made some decent gains in 2003,2004, 2005 and 2006, but I think they lost some in the latest crash.

[pattmarty]

23. I ain't busting on you, but how would that happen in today's climate?.......

.........After over a year and with large majorities we can't even get healthcare reform. You know if & when the Republicans get in control again (and they eventually will) the rates will even go lower. My opinion is that it will have to get so bad here again (like the 30's) where different groups of people will march, boycott, strike etc. Now will that ever happen again? With American Idol and all the other idiot shows, I think not.

[hfojvt]

32. one thing that I think would help

is getting the information out there. I also think that healthcare reform is trickier than progressive taxes. One of the things they keep hitting us with is the deficit. Well, if I can project $1.3 Trillion going backwards, then why can't we project that going forwards?

[prolesunited]

14. And what does this revolution look like?

What will be the outcome?

[readmoreoften]

17. Right now, it looks like nothing because there aren't enough people organized.

If you look at the history of uprisings here and elsewhere, we'll need an uptick in generalized struggle (strikes/demonstrations/occupations) before we can think of organizing as united proles. The reactionary role of the media is unprecedented in history. If it did look like something, it would have to be organized in concert with workers from other nations (capitalism is global).

My guess is that we will have a fascist populism before we have an organized left. The Democratic Party's role is little more than a place for the rich and connected to reconcile working class grievances with state control. The Democratic Party going to the left is unlikely. Progressives have been pushing it for years, but it seems more and more like a waste of time.

[Echo In Light]

30. For now. The more brazen the corp/state nexus has become, though, the greater the chances of legit..

opposition from the masses

[bergie321]

29. The top 1%

Only control 1% of the votes. The problem is that they also control 99% of the media which they use to effectively spew their propaganda. We won't be able to change the hearts and minds of the pro-rich poor people (Republicans) until either we are better able to spread our message or the rich finally completely destroy the economy(apparently worse than they did over the past 8 years).

[Marr]

34. I don't think you actually need revolution. All you need is a credible

threat of revolution.

And that means the general populace has to be willing to shut down the machine, take the brunt of violence their government is certain to dish out, then do it again. And again.

They say these things tend to pop up when no one's expecting it, but it certainly doesn't seem to me like we're anywhere near that point. Most of us are sitting on our fat asses watching television.

[upi402]

2. Please try to focus on what's important. Sports. Dancing Stars

Never mind that the Forbes 500 richest list is peppered with more and more Americans, as our country is destitute and friendless.

[hfojvt]

5. but that just makes me think

that so many of those sports stars - Tiger Woods, Peyton Manning, Brett Favre, Bill Self (go KU!! Oops, sorry) Bobby Knight, Kobe Bryant, Derek Jeter, Kurt Schilling (wasn't he just campaigning for a Republican? Is there a connection?) are in the top 1%, making well over $390,000 a year.

[OHdem10]

3. More prosperity for countries where the rich outsourced jobs.

[midnight]

4. Reminds me of this old tune-listen

http://www.youtube.com/watch?v=y041-eT6QrI

[hfojvt]

6. that was sorta painful

I would go for this oldie

http://www.youtube.com/watch?v=igADRpd7ncc

or even this one

http://www.youtube.com/watch?v=wk11Ywen5a4

[midnight]

13. Sorry-your selections are better.

[hfojvt]

9. a couple other factoids

The cost of Bush tax cuts to the top 1% from 2001-2006 = $683 billion. Surprisingly, no teabaggers took to the streets about this addition to the deficit.

Also, in 2000, 50% of taxpayers made less than $32,406 (in constant 2006 dollars). After just five years of the Bush administation, that number had dropped by $419.

Contrast that with the Clinton years when it rose from $29,892 to $32,406, and the years 1986-92 when it fell from $31,824 to $29,892. Reaganomics is bad for the lower 50%.

[Egalitariat]

10. Were the Top 1% the same people in 2006 as in 1986? What % of all taxes do they pay?

[hfojvt]

11. the data do not track that

although you can be sure that many are not. Tiger Woods, for example, was mostly unknown in 1986. He didn't turn pro until 1996. Peyton Manning was only ten years old (although Archie Manning may have been in the top 1%).

I am not sure what difference either of those questions makes. They got something like $400-600 billion from the Bush tax cuts. Surprisingly, this left them paying a higher percentage of the total income taxes than they did before. Somehow all those little $200-1200 tax cuts for the millions of poorer people really reduced the percent of total income taxes paid by the working class.

And yet, and yet, that does not make my own $1800 tax cut better than their average $350,000 tax cut (Not to mention the average tax cut of $45.8 million that went to the Fab 400 http://journals.democraticunderground.com/hfojvt/123)

Nor does it change the fact that $150 billion in tax cuts for the top 1% are a much bigger impact on the deficit than "welfare" is at $20.9 billion.

[hay rick]

36. Paying a higher percentage of total income taxes.

Actually, nothing surprising about that. Using the statistics you cite: from 1986 to 2006, the income share of the wealthiest 1% virtually doubled, rising from 11.299% to 22.062%. The (effective, I assume) tax rate for the top 1% stood at 33.13% in 1986. To maintain, their "share" of the income tax burden, the wealthiest 1% would have to have had their tax rate reduced to 16.97%- but it was only reduced to 22.79%- so their share of income taxes paid increased. The point that they are paying an increased share of tax revenues is frequently mentioned on their behalf.

Some more math: share of national income after taxes (take home pay) = percent of total income x (100 - effective tax rate).
1986 percentage of all take home pay for the wealthiest 1% = 11.299% x 66.87%(100-33.13) = 7.56%.
2006 percentage of all take home pay for the wealthiest 1% = 22.062% x 77.21%(100-22.79) = 17.03%.

I'm still waiting to see these kinds of calculations in print (but not holding my breath).

[hay rick]

38. Correction.

The "more math" numbers derived above would be "take home pay as a share of all income" rather than "percentage of all take home pay." The latter numbers would be higher...

[safeinOhio]

12. It's not the money

Money is not real and is only a symbol of power. What the rich really want is more power. They want that gap between them and the rest to widen so they can feel more important and in control. When the masses rise up they'll scatter like cockroaches when the light is turned on.

[hfojvt]

18. money is the way they keep score, but it buys things too

and it buys security. I don't really want to demonize these people in the top 1%. I don't want to put them up against the wall or in a guillotine. I just want them to pay a slightly higher income tax rate. I think probably some of them are decent people and sometimes very talented. Tiger Woods is an excellent golfer. Lebron James is an excellent basketball player. And Bill Self is an excellent coach.

He's gonna make $3 million a year until 2018 unless he gets fired and gets a multi-million dollar settlement like Mark Mangino. Mangino was football coach for KU and Self is the basketball coach of the number 1 team in the country which just one another double big twelve championship.

But neither of them are trying to rule the world, although coaches are often very authoritarian and also excitable. But even at $3 million a year, I think they are probably just trying to have a good life. I think most people are like that. They want nice houses, nice cars, good colleges for their kids, good health care, etc. $1,500,000 is a lot of money to get every year, but I am sure that if I made $3,000,000 a year that I would not be doing cartwheels about paying $1,500,000 in taxes. And probably neither would you.

But I also will not lose any sleep over adding $300-500,000 to their tax bill. Paying $1.5 million in taxes would suck, but it would be balanced out by the awesomeness of living on $1.5 million (of course there are also state income taxes to pay as well as $85,000 in FICA taxes but I think they will live, and live well).

[RaleighNCDUer]

28. OTOH, is he really WORTH 3 million/yr? Is ANYBODY worth

3 million/yr?

I suggest that when the top 1% STARTS at 388K, that anyone making that kind of money is vastly overpaid. I don't care if they are your favorite coach, your favorite musician, your favorite actor or your favorite wall street bloodsucker - they are not WORTH that much money. Only people who have completely lost comprehension of the value of money would believe they are deserving of so much.

[hfojvt]

31. that's up to the people who pay him

If I was working a job and somebody offered me $3 million a year do you think I would say "no, that's way too much, how about paying me $700,000 instead"? Almost nobody is gonna do that. He may have done some pushing to get the three million. I don't know. But that's logical too. If, say Oklahoma State, where he went to school, might offer him $2.5 million then why should he settle for $2 million to stay? Who wouldn't want another $500,000 or a million a year for their family? I think that makes him human, not some kind of demon. Not a saint either, but not the worst person in the world who just wants to rule the world and make the rest of us into slaves.

One thing that I think can blunt the incentive though, is a higher marginal tax rate. Suppose, for example, that the top tax rate was 70% like it was when I was in high school. Then if somebody was offered another $1,000,000 in salary, they would only get to keep $300,000 of it. I think that takes away some of the incentive to grab another million. Another thing under that scenario is that even if another million IS offered and accepted, a good portion of it goes right back to the public to fund things like interstate highways, monetary assistance for low income people to buy insurance, and, of course, the bombing of Afghanistan.

[hay rick]

37. Higher marginal tax rates.

Table showing top marginal tax rates, 1913- 2003: http://www.truthandpolitics.org/top-rates.php

Through most of the 50's and into the early 60's the top marginal rate was 91%- and income inequality wasn't nearly as great as it is today. I think a confiscatory top tax rate is needed now and would serve at least two important purposes: 1) the money is desperately needed to prop up our rapidly decaying society and, 2) a steeply progressive tax rate would reduce the incentive to seek extravagant incomes. The absolute highest rate could be north of 90% and applied only as a marginal rate for income over some amount like $10 million or $20 million.

After all the public relations blather is washed away, today's highest incomes are just a form of legalized looting.

[Greyhound]

15. As bad as this is, the reality is even worse. K&R.

[malaise]

20. Excellent post

Rec

[ck4829]

21. K&R

[KharmaTrain]

22. We're Reaching A Tipping Point...

One can only get wealthy when there's wealth to spread around. Today we have a middle and poor class (the majority) that are flat broke...beyond broke...into serious debt and not ready to put any more on the card. The big spending spress of the past 50 years is coming to an end and the rich are starting to get a rude awakening. Most corporate profits are down...or nowhere near they were a couple years ago and things are getting worse. They've screwed their customers too many times and are just starting to wake up that the well had gone dry.

I'm strongly in favor of either raising taxes on those who earn over $150k a year (100k is fine as well) or let the booosh tax breaks to the rich expire next year. But that's only a half step...to restore a consumer economy in this country, the rich will have to invest in THIS country...not continue to offshore or downsize. Maybe they'll realize the more money in the hands of the masses, the more they will spend and the less they'll be peaking at the books.

[zeemike]

27. Actually they do spread the wealth around

But it is to people that will aid them in making even more money....
It is really no different than a Kingdom...the king has a court and gives out titles to those that force the peasants to honer him....and with those titles one can rise to a better position in the society.
If you do favors for a wealthy man and do what you are told you can be appointed to a board of directors of some company and you will do very well....as long as you are loyal subject.

[bloom]

24. What happened to Obama's plan

to increase the tax for those making $250,000+?


Excellent post.

[RuthK]

25. Wealth Distribution

It is not just the income, but the wealth behind it. Check out the site "Who Rules America"

http://sociology.ucsc.edu/whorulesamerica/

Click on "Wealth, income, and power" and look at the pie charts of total and financial wealth. The 80% of the poorest people have only a diminishing sliver of the chart.

[hfojvt]

39. that is a good site

I have read and linked to it in the past, when I wanted stats on wealth distribution.

and welcome to DU :hi:

[RUMMYisFROSTED]

26. 1% Income vs. Wealth.

22% of income
A staggering 38% of wealth

[inna]

33. Even worse: Income and wealth inequality in the United States is at an all-time high,

surpassing even levels seen during the Great Depression, and rapidly accelerating:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7732854

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7387970

[hfojvt]

35. that first thread was real good

I haven't read the other one yet. Perhaps my work was redundant.