Forum Post: Slammersworld is a God Damn liar. He is a God damn lying coward pig. When I addressed total effective tax rates for the classes, I was ALWAYS referring to percentage of income. The middle class and the rich pay about the same rate overall. THATS A FACT.
Posted 12 years ago on Jan. 7, 2012, 8:40 p.m. EST by ModestCapitalist
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I was working all day and just signed on this evening to find that Scammersworld edited his 'challenge' page. Now, he swears that I stated that the middle and lower classes paid an equal 'amount' in taxes as the top 10%. TOP TEN PERCENT.
THATS NOT WHAT I SAID. I NEVER SAID THAT. SCAMMERSWORLD IS A GOD DAMN LIAR.
I HAVE STATED FROM THE VERY BEGINNING THAT WHEN YOU ACCOUNT FOR ALL FEDERAL, STATE, AND LOCAL TAXES AND FEES, THE MIDDLE CLASS PAY ABOUT THE SAME RATE AS A PERCENTAGE OF INCOME AS THE RICHEST ONE PERCENT. IN FACT, THE 2ND PERCENTILE ACTUALLY PAYS A HIGHER RATE ON AVERAGE THAN THE RICHEST ONE PERCENT. THATS A FACT.
THERE WAS NEVER ANY DEBATE REGARDING THE TOP TEN PERCENT OR THE SHARE OF FEDERAL TAXES PAID BY THE TOP TEN PERCENT. MY POSITION HAS ALWAYS BEEN REGARDING TOTAL FEDERAL, STATE, AND LOCAL EFFECTIVE RATES FOR THE CLASSES AS A PERCENTAGE OF INCOME.
Not only has Scammersworld been dead wrong on a dozen issues, now he can't even stick to the record. He is a God damn liar.
I can't spend a lot of time on this tonight because I have too much work to do this evening and tomorrow. But rest assured, I will be back online tomorrow evening or the following day to drive home the following issues like a runaway train through Scammersworld's back yard.
FACT: The richest one percent and the middle class pay about the same effective tax rate when you account for all Federal, State, and Local taxes and fees.
FACT: A significant portion of income for the richest one percent has been subsidized for decades with Federal, State, and City revenues and resources.
FACT: The single greatest factor driving up the cost of living has been and remains the incredible greed of the richest one percent.
FACT: There has been a multi-trillion dollar transfer of wealth from the middle and lower classes to the richest one percent over the last 35 years.
FACT: That concentration of wealth continues as we type causing economic instability in the US and around the world.
FACT: Wages have fallen for the majority of US workers over the last 35 years when you adjust for inflation. Household incomes for the lower majority have risen on average only because so many more households now require 2nd providers and retirees returning to work in order to compensate for the drastic increases in key items like energy, food, health care, housing, and higher education.
FACT: Energy, food, and home sale prices ARE NOT considered when core inflation is calculated.
FACT: The richest one percent have nearly tripled their income and more than doubled their actual buying power over the last 35 years while the middle and lower classes have lost actual buying power and net worth.
FACT: Consumer debt in America is nearly or possibly exceeding TWO TRILLION dollars. This is FIVE TIMES what it was 35 years ago even after you adjust for inflation and population growth.
FACT: The bulk of consumer debt is held by the lower 90%.
FACT: Its a direct correlation. When the rich get too rich, the poor get poorer.
FACT: Those trends continue as we type. If they are not partially reversed soon, there will be a GLOBAL DEPRESSION.
FACT: The first Great Depression was also caused by a heavy concentration of wealth. The recovery involved a partial redistribution.
FACT: My critics can not prove their outrageous claims that the richest one percent on average pay the highest total effective tax RATE. THATS RATE. NOT AMOUNT. THE MIDDLE CLASS PAY ABOUT THE SAME TOTAL EFFECTIVE RATE.
FACT: My critics can not prove their outrageous claim that the middle class has expanded over the last 35 years. Only a die-hard conservative head-in-the-sand partisan puppet would even have the nerve to imply such a thing.
FACT: My beef HAS NEVER been with the richest 10%. NOT ON ANY ISSUE. Its been with the richest 1%. THE RICHEST ONE PERCENT. THEY hold 43% of all financial wealth in America. THEY run the energy, health care, and finance industries. THEY hire corporate lobbyists. THEY own our government. THE RICHEST ONE PERCENT. So don't let Scammersworld or anyone else divert your attention from the incredible greed and corruption of that richest 1% by lumping them in with the upper class in general.
ITS A TRICK. DON'T FALL FOR IT.
FACT: I'll be back tomorrow evening or Monday at the latest to slam through Scammersworld's BS like a runaway train through a picket fence.
Don't let ANYTHING he types fool you. There is ALWAYS another side to the story. Always without exception.
Another thing: Beware of OWS lookalike sites. I landed on one yesterday. It looks identical and appears to be linked with this site. But the internet address was entirely different. My system hasn't been the same since. As a precaution, I tried to change my password on this site. But I can't. Perhaps NewEnglandPatriot or another tech savvy user can advise us further.
One last thing: I see somebody has been busy voting down my comments with their multiple IDs. I lost 49 points in one day. It really doesn't matter. I have exchanged PMs with over a dozen users who share similar views. Most of you OWSers know that I'm on your side. We may not agree on every issue, but we agree on most.
This is another previous entry in which I cite multiple sources for the quotes of experts who have gone on record acknowledging the link between concentration of wealth and economic instability.
Does the "detailed look" make one single reference to the record high concentration of wealth reached in 1929? If not, its diversionary hogwash.
John Kenneth Galbraith and Marriner Eccles Explained 50 Years Ago that Inequality Causes Crashes
Preface: If you think that only liberals are concerned about inequality, please read this.
In his definitive study of the Great Depression, The Great Crash, 1929, John Kenneth Galbraith wrote:
Galbraith wrote that in 1954.
Marriner S. Eccles - Federal Reserve chairman from 1934 to 1948 - made a similar point in his 1951 book Beckoning Frontiers:
Numerous prominent economists in government and academia have since agreed that large inequalities can cause - or at least contribute to - financial crises, including:
Paul Krugman and Simon Johnson are also open to the possibility..
http://georgewashington2.blogspot.com/2011/02/john-kenneth-galbraith-explained-that.html
Some of Einsteins comments regarding the concentration of wealth and the relationship to economic instability were made in a long essay published in 1949. First, a quote, then a link.
http://patrickmylund.com/blog/albert-einstein-on-capitalism-and-socialism/
Just for the record: I don't want socialism. I never have. I never will. I want modest capitalism.
The poor pay a MUCH higher % of their income to taxes both direct and imbeded than the rich do. THAT, is a fact. Why is it so hard to understand?
The following are quotes from the CBO (Congressional Budget Office) which confirm the rapid rise in inequality and the growing concentration of wealth.
"FACT: The CBO Study Notes That Rising Income Inequality Slowed During Recessions But Points To Different Causes
CBO: Income Inequality Rose Over 30-Year Period, Except During Recessions. From the Congressional Budget Office's report, "Trends in the distribution of Household Income Between 1979 and 2007": "The dispersion of household income rose almost continually throughout the nearly 30-year period spanning 1979 through 2007 except during the 1990-1991 and 2001 recessions. The recent turmoil in financial markets, the prolonged recession that began in December 2007, and the ongoing slow recovery may have caused a pause in that upward trend, but the present analysis does not extend beyond 2007." [Congressional Budget Office, October 2011]
CBO Report Measures Change In Income Inequality From 1979 To 2007 Because Those Years Both Preceded Recessions And Therefore Had "Similar Overall Economic Activity." From the Congressional Budget Office's report, "Trends in the distribution of Household Income Between 1979 and 2007": "To assess trends in the distribution of household income, the Congressional Budget Office (CBO) examined the span from 1979 to 2007 because those endpoints allow comparisons between periods of similar overall economic activity (they were both years before recessions)." [Congressional Budget Office, October 2011]
Despite Similar Economic Forces In Both Years, Income Inequality Has Risen "Substantially." From the Congressional Budget Office's report, "Trends in the distribution of Household Income Between 1979 and 2007": "The distribution of after-tax income (including government transfer payments) became substantially more unequal from 1979 to 2007 as a result of a rapid rise in income for the highest-income households, sluggish income growth for the middle 60 percent of the population, and an even smaller increase in after-tax income for the 20 percent of the population with the lowest income."
The Congressional Budget Office also included in its report the following chart showing the share of after-tax income enjoyed by each quintile in 1979 and in 2007:
CBO: "Major Reason" For Rising Income Inequality Between 1979 And 2007 Was Wealthier Households' Share Of Market Income Increased. From the Congressional Budget Office's report, "Trends in the distribution of Household Income Between 1979 and 2007":
CBO: Change In Market Income Occurred Because Sources Of Income Became More Concentrated With The Wealthy And Because Capital Gains, Which Are Skewed Toward The Wealthy, Grew. From the Congressional Budget Office's report, "Trends in the distribution of Household Income Between 1979 and 2007":
This is a portion of a previous response to scammersworld in which I quote a research group and provide a source.
Note: There are no official government reports on total (Federal, state, and local) effective tax rates for any income group. There never have been. These studies have only been done by independent research groups. There are conflicting figures but all independent studies have indicated that the middle class end up paying about the same effective rate as a percentage of income when all Federal, State, and local taxes are considered.
Sorry about the profanity. Scammersworld had it coming.
"When you include these many Federal, State, and Local taxes and fees, the middle class end up paying about the same rate as a percentage of income as the rich. The difference is within 5 percent. In fact, I state that disclaimer just to be safe. It's probably more like 2 percent. You want a source? You tell me to "put up or shut up"?
Check out this report from Citizens For Tax Justice:
http://www.ctj.org/pdf/taxday2009.pdf
Fucking read it bitch. In the meantime, read this quote from the report:
"The total federal, state and local effective tax rate for the richest one percent of Americans (30.9 percent) is only slightly higher than the average effective tax rate for the remaining 99 percent of Americans (29.4 percent). From the middle-income ranges upward, total effective tax rates are virtually flat across income groups." "
And another:
"If you still have even the slightest doubt, watch this video of independent economist and former Secretary of Labor Robert Reich debunking 7 lies about the economy. Pay special attention to that 7th lie.
http://m.youtube.com/index?desktop_uri=%2F&gl=US#/watch?v=mM5Ep9fS7Z0
I type the truth. When you account for all Federal, State, and local taxes, the middle class pay about the same effective rate as the richest one percent."
Between the years 1990 and 2008, key living expenses like energy, food, health care, housing, and higher education increased far beyond the rate of inflation.
For example:
Housing: UP 56%. Health care expenses: UP 155% Four year public college education: UP 60% Four year private college education: UP 43%
I don't have figures for energy and food but everyone knows that they have risen DRASTICALLY over the last few years alone.
Then you have consumer debt. Its nearly $2,000,000,000,000. THATS NEARLY TWO TRILLION DOLLARS. MORE THAN FIVE TIMES WHAT IT WAS 30 YEARS AGO EVEN AFTER YOU ADJUST FOR INFLATION AND POPULATION GROWTH.
The majority of that debt is NOT held by the lower 50%. Its held primarily by the lower 90%. That drastic increase in consumer debt along with the stagnated and dropping wages of the majority (Thats wages. Not household income.) over the past 30 years along with the points regarding inflation vs ACTUAL living expenses and 2nd providers/retirees working in order to compensate shatters any claim that the middle class has not lost strength.
It appears that I hit a nerve when I challenged scammersworld to put his record of making accurate predictions up against mine. I also hit a nerve each and every time I caught him in some stupid mistake.
Like the time he swore that those with "higher than average" incomes shared just 46% of total income (a mathematical impossibility). That was dead wrong. Or the time he swore that all State and Local taxes and fees were flat or progressive without exception. That was dead wrong. Or the time he swore that real estate taxes in particular were flat or progressive without exception. That was dead wrong. Or the time he swore that a recession didn't technically and by definition involve two consecutive quarters of negative growth. That was dead wrong. Or the time he swore that capital gains were not income. That was dead wrong. Or the time he swore that there was no such thing as a negative corporate tax rate. That was dead wrong. Or the time he swore that "combined Local/State/Federal taxes in the US are far in excess of any rates anywhere else in the world". That was dead wrong. Or the time he swore that no business enterprise paid taxes ever, they simply passed every penny onto the consumer. That was dead wrong. Or the time he swore that corporate profits made overseas could never be taxed in the US under any circumstances. That was dead wrong. Or the time he swore that there was no link whatsoever between distribution of income and/or wealth and economic stability as long as all levels expand. That was dead wrong. Or the time he swore that yearly deficits were cut by 18% from January of '03' to January of '07'. That was dead wrong.
If scammersworld tries to weasel his way out of these mistakes like he did on the pages which he made them, I will simply paste my responses from those pages which explain each mistake one at a time in detail.
I have been criticized for my relentless persecution of the rich and my particular brand of protest. I've been told that nothing 'positive' can come from it. Thats a load of albino lobster crap. The truth is just the opposite. Nothing positive can come from our toleration of the rich. That toleration got us in this mess to begin with. It prevents us from doing what must be done in order to reverse this obscene concentration of wealth, save the middle class, and prevent another Great Depression.
Let me put it this way. If everyone felt the way I do about greed, and made a statement to that effect with their wallets, the wealth of this country would be significantly less concentrated in one year. After 5 or 10, we would have the strongest middle class in American history.
Whats that you say? Massive job loss?
No. I'm not proposing that we stop spending our money all together. Just that we stop giving so much to the rich. Support small business more and big business less. The little guy more and the big guy less. Poor and middle class communities more and rich communities less.
I don't believe that one single person out there will take that seriously until they understand the severity of concentration and the horrible downside.
They are even less likely to make that statement with their wallets if they make or accept any excuses for the rich. Like:
"The rich create jobs." "The rich pay more taxes." "The rich 'give back'."
BULLSHIT! THE RICH CONCENTRATE WAY TOO MUCH GOD DAMN WEALTH! THE RICHEST ONE PERCENT ALREADY HOLD MORE PERSONAL WEALTH THAN THE BOTTOM NINETY PERCENT COMBINED. THIS IS TRUE EVEN AFTER THE JOBS, THE TAXES, AND THE FAKE HUMANITARIAN CRAP. ITS GETTING WORSE. AMERICA'S WEALTH IS BECOMING MORE CONCENTRATED AS WE SPEAK. THIS WILL CAUSE ANOTHER GREAT DEPRESSION. I WANT AS MANY PEOPLE AS POSSIBLE TO UNDERSTAND THIS AND TAKE IT AS SERIOUSLY AS A FUCKING HEART ATTACK! UNTIL THEY DO, WE ARE FUCKED! THERE IS NO CHANCE IN HELL FOR A TRUE RECOVERY WITHOUT A PARTIAL REDISTRIBUTION OF WEALTH! THE GOVERNMENT WILL NEVER MAKE IT HAPPEN! ITS UP TO US! PERIOD!
I only ever criticize you for your long winded posts. Like most people here, I don't read their content. Too much verbiage.
These issues are too big and complex to cover in a few short lines.
The ugly truth. America's wealth is STILL being concentrated. When the rich get too rich, the poor get poorer. These latest figures prove it. AGAIN.
According to the Social Security Administration, 50 percent of U.S. workers made less than $26,364 in 2010. In addition, those making less than $200,000, or 99 percent of Americans (actually more like 98%), saw their earnings fall by $4.5 billion collectively.
The sobering numbers were a far cry from what was going on for the richest one percent of Americans.
The incomes of the top one percent of the wage scale in the U.S. rose in 2010; and their collective wage earnings jumped by $120 billion. In addition, those earning at least $1 million a year in wages, which is roughly 93,000 Americans, reported payroll income jumped 22 percent from 2009. Overall, the economy has shed 5.2 million jobs since the start of the Great Recession in 2007. It’s the worst economic downturn since the Great Depression in the 1930’s.
Another word about the first Great Depression. It really was a perfect storm. Caused almost entirely by greed. First, there was unprecedented economic growth. There was a massive building spree. There was a growing sense of optimism and materialism. There was a growing obsession for celebrities. The American people became spoiled, foolish, naive, brainwashed, and love-sick. They were bombarded with ads for one product or service after another. Encouraged to spend all of their money as if it were going out of style. Obscene profits were hoarded at the top. In 1928, the rich were already way ahead. Still, they were given huge tax breaks. All of this represented a MASSIVE transfer of wealth from poor to rich. Executives, entrepreneurs, developers, celebrities, and share holders. By 1929, America's wealthiest 1 percent had accumulated 44 percent of all United States wealth. The upper, middle, and lower classes were left to share the rest. When the lower majority finally ran low on money to spend, profits declined and the stock market crashed.
Of course, the rich threw a fit and started cutting jobs. They would stop at nothing to maintain their disgusting profit margins and ill-gotten obscene levels of wealth as long as possible. The small business owners did what they felt necessary to survive. They cut more jobs. The losses were felt primarily by the little guy. This created a domino effect. The middle class shrunk drastically and the lower class expanded. With less wealth in reserve and active circulation, banks failed by the hundreds. More jobs were cut. Unemployment reached 25% in 1933. The worst year of the Great Depression. Those who were employed had to settle for much lower wages. Millions went cold and hungry. The recovery involved a massive infusion of new currency, a public works program, a World War, and higher taxes on the rich. With so many men in the service, so many women on the production line, more currency, and those higher taxes to help pay for it, some US wealth was gradually transferred back down to the majority. This redistribution of wealth continued until the mid seventies. By 1976, the richest 1 percent held less than 20 percent of America's private wealth. The lower majority held the rest. It was the best year ever for the American middle and lower classes. And rightfully so. This was the recovery. A partial redistribution of wealth.
Then it began to concentrate all over again. Here we are 35 years later. The richest one percent now own 40 percent of all US wealth. The upper, middle, and lower classes are sharing the rest. This is true even after taxes, welfare, financial aid, and charity. It is the underlying cause. No redistribution. No recovery.
Note: A knowledgable and trustworthy contributor has gone on record with a claim that effective tax rates for the rich were considerably lower than book rates during the years of redistribution that I have made reference to. His point was that the rich were able to avoid those very high marginal rates of 70-90% under the condition that they invested specifically in American jobs. His claim is that their effective tax rates probably never exceeded 39%. My belief is that if true, those rates were still considerably higher than the previous lows of '29' and the policies still would have contributed to a partial redistribution by forcing the rich to either share profits and potential income through job creation or share income through very high marginal tax rates. This knowledgable contributor and I agree that there was in effect, a redistribution but disagree on the use of the word.
One thing is clear from recent events. The government won't step in and do what's necessary. Not this time. Book rates for the rich remain at all time lows. Their corporate golden geese are subsidized. The benefits of corporate welfare are paid almost exclusively to the rich. It's up to us. Support small business more and big business less. Support the little guy more and the big guy less. It's tricky but not impossible.
For the good of society, stop giving so much of your money to rich people. Stop concentrating the wealth. This may be our last chance to prevent the worst economic depression in world history. No redistribution. No recovery.
Those of you who agree on these major issues are welcome to summarize this post, copy it, link to it, save it, show a friend, or spread the word in any fashion. Most major cities have daily call-in talk radio shows. You can reach thousands of people at once. They should know the ugly truth. Be sure to quote the figures which prove that America's wealth is still being concentrated. I don't care who takes the credit. We are up against a tiny but very powerful minority who have more influence on the masses than any other group in history. They have the means to reach millions at once with outrageous political and commercial propaganda. Those of us who speak the ugly truth must work incredibly hard just to be heard.
I have stated many times that FDR's policies (designed to partially reverse the record high concentration of wealth) were successful every year but one. I have stated that his policies resulted in economic growth and job creation every year but one. Also that he did in fact, officially end the Great Depression.
The following is an entry from 'looselyhuman' who has gone on record with a similar claim. One source to verify our claims is included. Out of respect for 'looselyhuman', I will post not only the source, but also his entire entry unedited:
Its a good one. Looselyhuman said:
"Revisionist history. Check this out re: FDR's taxes that long outlived him (until 1980-82): http://www.brianrogel.com/the-100-percent-solution-for-the-99-percent
Unemployment declined every year from 1933-1940 except 1938 when FDR listened to the GOP and cut back on the New Deal. GDP grew every year except 1938 as well. The rest of the world was in free fall. There was no trade or commerce and without government spending it would have been total collapse. Then, yes, things took off even more during the Keynesian economic stimulus known as WWII.
Unemployment (% labor force)
1933 24.9
1934 21.7
1935 20.1
1936 16.9
1937 14.3
1938 19
1939 17.2
1940 14.6
Percent change GDP
1933 -4%
1934 15%
1935 10%
1936 13%
1937 9%
1938 -7%
1939 7%
1940 9%
How would you feel about 15% economic growth today?"
Don't believe this outrageous crap about the rich paying 37% of the taxes in America and the poor paying none. It's a trick. A spin on statistics to make it seem as if the rich are overtaxed. They aren't. But they damn well should be. We're in this mess because of them.
Be careful when you hear or read anything regarding the PERCENTAGE of OVERALL FEDERAL INCOME taxes paid by any particular group. It's a terribly misleading statistic. The rich pay a larger PERCENTAGE of OVERALL FEDERAL INCOME taxes now than 10 years ago because they have a larger PERCENTAGE of OVERALL INCOME in America now than 10 years ago. That statistic regarding 37% of Federal Income Taxes is one of the most misleading in the history of propaganda.
When you account for all FEDERAL, STATE, and LOCAL taxes and fees, the middle class actually pay about the same rate (as a percentage of income) as the rich. The difference is within 5 percent. It shouldn't be that way. The rich should pay a MUCH higher rate simply because they are horribly over-paid. We aren't. They own 43% of all financial wealth in America. We share the rest. But it gets even more disgusting. The devil is in the details.
Corporate profits have been partially subsidized with federal, state, and local revenue. This benefit has been hoarded at the top. Business managers make up the largest group of one percent club pigs (followed by attorneys, doctors, and celebrities). Plus 40% of the market is owned by the top 1%. Their record territory dividends have been partially subsidized by federal, state, and local revenue. The benefits have not been shared proportionally with the little guy. The lopsided division of growth across quintiles proves it.
The income for richest one percent has grown more than 10 times faster than the middle percentile over the last 30 years. This is true EVEN AFTER taxes. When you account for inflation and the actual cost of living (tied to record high profits in energy, finance, and healthcare), the middle class have actually lost relative buying power while the top 1% have drastically increased their income and bottom line wealth.
In 1976 (when their tax rates were much higher), the top one percent reaped 9 percent of all private income and held less than 20 percent of all private wealth in America. Now, they reap 21 percent of all private income and hold 40 percent of all private wealth. Meanwhile, the lower majority (those who are still employed) are working more hours and have less to show for it.
Just to make it crystal clear: The rich do not pay 37% of all taxes. Not even close. They pay roughly 37% of all FEDERAL INCOME TAXES which account for less than 1/2 of total government revenue. The rest is drawn from a number of sources and across income levels. The rich harp on this 'Federal Income Tax' statistic because it leads people to believe that they pay 37% of ALL taxes. They don't. Not even close. Their share as a group represents about their share of income. The difference is within 5 percent. In fact, the 2nd percentile actually pays a slightly higher rate on average than the top percentile.
The richest 500 Americans hold more personal wealth than the lower 150 million Americans combined. These richest 500 Americans pay an effective rate of under 15%.
If the rich want to pay a lower share of the taxes in America, then they should get themselves a lower share of the income in America. In other words, don't be so rich to begin with. After all, this obscene concentration of wealth actually CAUSES economic instability. It CAUSES poverty. It will CAUSE the next Great Depression.
No more excuses.
RAISE THOSE GOD DAMN TAXES ON THE RICH!
The CBO report I am about to make reference to breaks down shares of net American income by quintile. Since a quintile represents 1/5, the middle quintile would certainly represent the 'middle class'. But we'll expand further out to all 5 quintiles just to cover all bases. Keep in mind these statistics represent income AFTER taxes.
Between 1979 and 2007, the share of net income for the lowest quintile dropped by 27.9 percent. Does that prove the expansion of the lowest class? Damn near it but lets eliminate all doubt.
Between 1979 and 2007, the share of net income for the second quintile, dropped by 23.6 percent. Does that prove the expansion of the lower class? Isn't it possible that the lowest two quintiles were always the lower class and the middle class had always represented just 1/5 of the US population? Well, thats what justhefacts would swear so lets eliminate that last shred of doubt. Lets move onto the middle quintile. The indisputable 'middle class'.
Between 1979 and 2007, the share of net income for the middle quintile dropped by 14.5 percent. There you go. Indisputable proof that at least 3/5 of Americans lost their relative share of net income between 1979 and 2007. Indisputable proof that America's middle class had shrunk and its lower class had expanded between 1979 and 2007. Indisputable mathematical proof. Still, lets move onto the next quintile.
Between 1979 and 2007, the share of net income for the fourth quintile dropped by 10.3 percent. There you go. Indisputable proof that at least 4/5 of Americans lost their relative share of net income between the years 1979 and 2007.
Bankruptcy and consumer debt rose significantly during this time frame. By 2007, consumer debt alone rose to nearly $2,000,000,000,000. Thats NEARLY TWO TRILLION DOLLARS.
So we've proven the actual shrinkage of the middle class and the actual expansion of the lower class. We've clearly established a loss of financial assets.
So where did the money go? The highest quintile? Lets take a look.
Between 1979 and 2007, the share of net income for the fifth quintile rose by 23.8 percent. Should we blame them? The highest quintile? Do we really want to blame a full 20% of the American population?
Not in my book. Lets take a closer look.
Between the years 1979 and 2007, the share of net income for the top decile (one tenth) rose by 40.2 percent. Thats a 16.4 percent spread just within 10 percent of the population. Lets take a closer look.
Between the years 1979 and 2007, the share of net income for the top ventile (one twentieth) rose by 61.9 percent. Thats a 21.9 percent spread just within 5 percent of the population. Interesting. Now, lets take a look at the final piece of the puzzle from this particular time frame.
Between 1979 and 2007, the start of the Great Recession and the worst financial crisis in nearly 80 years, the share of net income for the top centile (one hundredth, top 1%) rose by 128.0 percent. Thats a spread of 66.1 percent just within 5 percent of the population.
But that 66.1 percent spread is nothing. It is multiplied by hundreds just within that top centile. The richest 1%.
THATS THE PROBLEM.
cbo.gov/publications/collections/collections.cfm?collect=13
Don't forget those points regarding 2nd providers, retirees, inflation, and key living expenses. They are vital to understanding.
An outstanding series of posts.
I believe you are inaccurate about one thing, however. The wealthy really do pay less than the middle class. Not across the board, but very often. They pay almost nothing on payroll taxes and receive a great deal of their income in the form of Capital Gains, which are taxed at a far lower rate than earned income is.
Here's an article by Warren Buffett; Although it is not a study with tables and graphs, it nevertheless addresses this issue:
Stop Coddling the Super-Rich By WARREN E. BUFFETT Published: August 14, 2011
OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.
Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.
The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)
I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.
Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
My understanding is that the VERY rich who reap their incomes primarily from capital gains do in fact pay those very low rates you refer to. But on average, the richest one percent pay more than Buffet and others like him.
The mega-rich are not willing to pay more in taxes. Thats just another line of PR crap from the 'king' of investors. They know damn well that it won't happen because their lobbyists working behind the scenes won't let it happen.
Buffet and his 'mega-rich' friends can prove me wrong anytime they want by voluntarily paying 30% on their incomes. There has always been a specific line on their tax forms allowing them to pay anything they feel they owe.
None of them have done so.
You may be right. At one point I had the figures. I'll have to look them up again soon.
At any rate, thanks again for the post. I'm afraid it won't likely dissuade the mythologizing, evidence-free trolls from continuing to post their dangerous drivel, but at least your contribution will provide everyone here with a touchstone.
You're welcome. I do appreciate your entry. Its a good one. Glad to be on the same team.
I'm glad we are as well. I did noticed something in your response to me that I overlooked before: the issue of the super wealthy voluntarily paying more in taxes. While I understand and agree with your underlying feeling, your "solution" is the very same one the far right made in response to others in the top 1% and higher who lobbied congress to raise their taxes.
It's a bit disingenuous. The issue they are addressing is that the system, not individual voluntary donations, must change. No one, not you and me, and certainly not the mega-rich, would throw their individual fortunes at an issue if it wouldn't address the real problem. And the real problem is systemic and involves more that those few thousands at the very top.
You might enjoy what's on this site I posted a link to below. I call your attention especially to the response to Orin Hatch's obfuscation. (It's down their page on the right.) It might make clearer what my poor writing skills can't:
http://patrioticmillionaires.org/
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