Forum Post: FACTS About the Transfer of Personal Income from 95% of the Taxpayers to 5% of the Taxpayers – 1986 to 2007.

FACTS About the Transfer of Personal Income from 95% of the Taxpayers to 5% of the Taxpayers – 1986 to 2007.

IRS Spread Sheet 07in01etr.xls contains the Personal Income Tax statistics for the years 1986 to 2007. These statistics document the transfer of $8.650 TRILLION dollars in Taxable Personal Income (TPI) from the Bottom 95% of taxpayers to the Upper 5% of Taxpayers during the 21 tax years of 1987 to 2007.

Spread Sheet 07in01etr.xls was uploaded to the Internet in early 2010. To date, no one in the Corporate Media has downloaded the spread sheet, analyzed these statistics and reported on the transfer of $8.650 TRILLION dollars from the pockets of the middle-class and working-class families in the United States to the pockets of Top 5%.

There are six Income Classes in the 1986 to 2007 TPI statistics. They are (1) the Top 1%, (2) the Top 1.01% to 5%, (3) the Bottom 5.01% to 10%, (4), the Bottom 10.01% to 25%, (5) the Bottom 25.01% to 50%, and (6) the Bottom 50%. [Top = GAINERS, Bottom= LOSERS]

In 1986, 102,087,635 family and individual taxpayers had a Total Taxable Personal Income (TTPI) of $2.524 TRILLION dollars. Of this, the TTPI SHARE of (1) the Top 1%: $285.2 BILLION (11.3% of the TTPI - 1.4 million tax returns); (2) the Top 1.01% to 5%: $323.3 BILLION (12.81% - 4.1 million tax returns); (3) the Bottom 5.01% to 10.%: $278 BILLION (11.01%- 5.1 million tax returns), (4) the Bottom 10.01% to 25%: $603.7 BILLION (23.92%-15.3 million tax returns), (5) the BOTTOM 25.01% to 50%: $613.4 BILLION (24.3% - 25.5 million tax returns), and (6) the Bottom 50%: $420.6 BILLION (16.66% - 51 million tax returns). 1986 TTPI SHARES: Income Groups 1 and 2=24.11%; Income Groups 3, 4, 5 and 6= 75.89%.

In 2007, 141,070,124 family and individual taxpayers had a TTPI of $8.799 TRILLION dollars. The TTPI SHARES were (1) Top 1% (22.83%-GAIN 11.53%), (2) Top 1.01% to 5% (14.62%- GAIN 1.81%), (3) Bottom 5.01% to 10% (10.61% - LOSS 0.4%), (4) Bottom 10.01% to 25% (20.66% - LOSS 3.26%), (5) Bottom 25.01% to 50% (19.04% - LOSS 5.26%), and Bottom 50% (12.26% - LOSS 4.4%) 2007 TTPI SHARES: Income Groups 1 and 2=37%; Income Groups 3, 4, 5 and 6= 63%.

Salaries and Wages as a percent of the TTPI in 1935 (the depth of the Great Depression) was 58%. By 1945 and the end of World War Two, it had increased to 76.4%. From 1946 to 1970, it increased to and peaked at 83.2% of the TTPI in 1970. It was 82.19% in 1980, but had decreased to 78.7% in 1986 due to the tax code changes of 1981. By 1993 it was down to 76.92%, down to 69.37% in 2000, and down to 67.2% in 2007.

If detailed statistics were available for the tax years before 1986, the best tax year for determing a FAIR SHARING OUT of the TTPI would be the peak Salaries and Wages year of 1970. Lacking those statistics, I had to settle for the tax year of 1986 when the Salaries and Wages percentage of the TTPI was 78.7% - a drop of 4.5% from the peak year. The question: What would have been the DOLLAR AMOUNT GAINS or LOSSES on the Taxable Personal Incomes of Middle-Class and Working-Class families if TTPI SHARES of 1986 had remained the same for each susequent tax year up to and including 2007?

Because it is zero-sum, when an Income Group GAINs or LOSES TTPI SHARE in each tax year, other Income Groups LOSE or GAIN TTPI SHARE. In 1986, the TTPI SHARE of the Bottom 50% of taxpayers was 16.66%. In 1987, it was 15.63%, a SHARE loss of 1.03%. The DOLLAR AMOUNT loss is calculated by multiplying the 1.03% loss times the 1987 TTPI of $2.814 TRILLION dollars. The result was a loss of $28.948 BILLION. For 1988, 16.66% [1986 SHARE) minus 14.93% [1988 SHARE] equals a loss of 1.73%. This percentage times the 1988 TTPI equals a loss of $54.238 BILLION. The total loss for the Bottom 50% for the tax years 1987 to 2007 was $3.131 TRILLION dollars.

The Bottom 25.01% to 50% Income Group loss from 1987 to 2007 was $3.578 TRILLION. The Bottom 10.01% to 25% Income Group loss was $1.919 TRILLION. The Bottom 5.01% to 10% Income Group actally had DOLLAR AMOUNT gains in 13 of the 21 years from 1987 to 2007 with a total GAIN of $112.1 BILLION, and losses in 8 years with a total LOSS of $133.948 BILLION. The actual NET LOSS for this Income Group was $21.85 BILLION.

The TTPI SHARE of the Top 1% increased every year from 1986 to 2007 with a total DOLLAR AMOUNT gain of $7.039 TRILLION. The TTPI SHARE of the Top 1.01%to 5% also increased in every year for a total DOLLAR AMOUNT gain of $1.61 TRILLION.

The NET GAIN for the two top Income Groups (5% of taxpayers) was $8,649,947,322,384. The NET LOSS for the four bottom Income Groups (95% of the taxpayers) was $8,649,947,289,616. The difference is due to rounding-out errors.