Income Inequality Is At An All-Time High: STUDY

Income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression, according to a recently updated paper by University of California, Berkeley Professor Emmanuel Saez. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes. On his blog, Nobel prize-winning economist and New York Times columnist Paul Krugman called the numbers "truly amazing."

Though income inequality has been growing for some time, the paper paints a stark, disturbing portrait of wealth distribution in America. Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000.

As of 2007, the top decile of American earners, Saez writes, pulled in 49.7 percent of total wages, a level that's "higher than any other year since 1917 and even surpasses 1928, the peak of stock market bubble in the 'roaring" 1920s.'"

Beginning in the economic expansion of the early 1990s, Saez argues, the economy began to favor the top tiers American earners, but much of the country missed was left behind. "The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007," Saes writes.

Despite a rising stock market, largely growing employment and a historic housing boom things were not nearly so rosy for the rest of U.S. workers. This trend, according to Saez, only accelerated during the George W. Bush's tenure as President:

"...while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993-2000, these incomes grew only 1.3 percent per year from 2002-2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth."

READ the entire paper:

saez-UStopincomes-2007 -

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Comments

[ECJLA]

Today's extreme income, wealth, status and rank disparities among people supposedly "created equal" are obscene, immoral and unacceptable.

In his recent biography of Abraham Lincoln, George McGovern points out that what really distinguished Lincoln from his opponents and gave him political traction, was when he opposed the expansion of slavery on the grounds that slavery itself was immoral.

Today's extreme inequality is tantamount to enslavement for those at the bottom. The laissez faire non-social democratic systems that have resulted in our super-stratified "Not-Great Society" and world are the drivers of all the world's problems, from war and peace to ecology. Like slavery, today's rich-poor gap is grossly immoral. What is startling however is that no one is even arguing for measures to stop it from worsening.

This is certain to become the defining issue of the 21st century. Yet there is bi-partisan silence because the needed public interest oriented policy and legal remedies would cause the ruling elites -- to whom both parties' officials are beholden -- to have to part with some of their ill-gotten gains.

As they say on NPR, "this I believe": only a new political party devoted to equality, fairness and decency, led by a figure of Lincoln's moral and intellectual caliber, can save the country and world.

When the Democratic Party whithers away ala the Whigs in favor of such a new leveling party, it will be a richly deserved oblivion indeed.

Eric C. Jacobson
Public Interest Lawyer
Culver City, California

[lvtfan]

Read Henry George's book, "Progress & Poverty," and his essays, in "Social Problems," and his speeches. (you could start at wealthandwant.com) You'll know why we have the inequality we've got, and you'll know what sort of reform is necessary to correct it.

[sweetnessandlight]

"Diversity" of income should be celebrated.

This is a manufactured problem about as important as the color of M&M's.

Nobody should care

[sweetnessandlight]

Actually anybody that understands even the rudiments of economics should celebrate this "diversity".


This is a manufactured problem about as important as the color of M&M's.

[synthguy]

Quite simply, Americans confuse democracy with capitalism.

America is not a democracy; it's a plutocratic oligarchy that's driven by opportunism, and governments are not run by politicians, but by corporations.

Wealth = Freedom and Opportunity.
Poverty = Too Bad, Next Time Maybe.

[Joseph Hentz]

"Executives and other highly compensated employees now receive more than one-third of all pay in the U.S." - The Wall St. Journal

WANT TO DO SOMETHING ABOUT IT?

Change the culture one earner at a time!

Send a message to Obama, or your favorite super earner CEO, that he should share a % of his pay with anyone that influences him.
http://www.openyear.org/wp-content/themes/church_20/wordvote/wordvote.htm

[codycap]

LETS HEAR FROM THE BILLIONAIRES
Get their side of the story. Buffett put his money where his mouth is. Last November he issued a challenge to his fellow billionaires: I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists. So far, no one has taken him up on this bet.

The only billionaire to have accepted his challenge has been Mark Cuban.

Go to
blogmaveri­ck.com/200­7/12/warre­n-buffett-­taxes-and-­the-presid­ency/

One thing Mr. Cuban says I disagree with.
RE: If you are going to raise my taxes, I want something in return.
He said raise my taxes but cut govt spending by the same amount. That might be alright for him but when govt. cuts spending it’s not by getting rid of tax loopholes, subsidy’s to the big corporations. It’s always the poor who get cut.

For example Bushes cuts.

In 2009, the cost of tax cuts for households with incomes above $1 million will be $51 billion (see Figure 2) — about seven times the size of the savings Bush cuts to domestic discretionary programs will produce. (EX: Head Start etc.)

[mansterEZ]

Most of the [sic] American people choose to be purposefully ignorant.
Beliefs do not require facts as supported by provable evidence.
Alexis de Tocqueville, a French observor and noted historian of the early 19th century, once wrote "a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it. Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom."
Sideline observors like the undocumented immigrants and apolitical [sic] citizens get everything that they deserve--the great shaft from behind. And like it!!
Comments welcomed.

[dgarrett]

If the playing field was "level" your comment would have some validity. Read the book, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) . It is filled with actual court cases, and legislation that has been passed to help the big money interests fleece you.

[seattleguy13]

Outstanding comment! Your quote from Alexis de Tocqueville is exactly on point: "a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."

An observer of European governments and American government in the middle of the 19th century de Tocqueville provided us with a clear distinction between the meaning of the word "equality" being used by Socialists to promote class warfare, redistribute private wealth, and usurp the freedom of private citizens and the meaning of "equality" as it then applied to citizens in an America democracy.

"Democracy extends the sphere of individual freedom. Socialism restricts it.
Democracy attaches all possible value to each man.
Socialism makes each man a mere agent, a mere number.
Democracy and socialism have nothing in common but one word: equality.
But notice the difference: While democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."

- Alexis de Tocqueville, 1748

To restate your comment in the form of a question: "Are Americans so enamored of equality that they would rather be equal in slavery than unequal in freedom?"

[LHB58]

A total straw man argument. Totalitarian socialism and anarchic capitalism are not the only systems of political and economic organization.

[cimbri]

Obama just gave a few trillion to the banks at zero interest so me thinks the gap will get larger and larger.

[gra8whit]

We actually got interest back from those banks to the tune of a few hundred million dollars in interest gained. Not thrilled by the effort, but we did gain interest from it.

[satan2liberals]

Income inequality is a bogus issue.

The fact that someone else earns or has more money than I do does not make me poorer.
Hooray for them,their position is something to aspire to create not demonize.

[UrbanRevolution]

it's not the fact that everyone does not earn the same amount it is the fact that we are not taxed equally.

If i write a $100 check to my local charity and my millionaire boss writes a $100 check to charity he gets to claim a higher percentage of it on his tax returns than i do. what is his $100 worth more than mine? According to God mine is worth more because i had less to give, but far be it from Republicans to ask WWJD

[Runwin]

Yes his money is worth more than your's principally because he was taxed more on it in the first place. Maybe you want to volunteer to pay the same percentage tax as your boss does and then you can claim back the same percentage as he does...
Although I suspect you won't be wanting to do that will you?

[satan2liberals]

If you knew ANYTHING about marginal tax rates you woulg realize how stupid your question makes you look.

[ChristianEcon.com]

Oh, the old "it's not a zero-sum game" canard. The rich make it out of thin air--yeah, that's the ticket! I think that worked back in the 80's. Nice job being so easily tooled.

[Summertown]

So the last two trading days the stock market took a dump. It seems some light bulb went off in someone's head that the 70% of the population that normally supports the country financially doesn't have the money to spend to support the country. Can we all say catch 22?

Except that Catch 22 would not exist if incomes had gone up and not down. In the past ten years I've watched our incomes erode, the prices of everything climbing, the uncompensated work hours going from 50 to 60 hours per week.

Is it a prime time for resurgence of the unions? It appears the only way to force the fat cats that have stolen so much from this country to repay what the 70% of us have provided.

[codycap]

For you posters who think all of us "Socialists" are being mean to the rich. That we are not being fair to them when we ask them to to pay a couple more dollars in taxes. Not for much- just to save a few thousand lives every year and untold misery because of lack of treatment. Ever try to live with a toothache?

Just since 2001 we have seen a massive additional government­-engineere­d
transfer of wealth from the lower and middle classes to the rich in the form of substantial reductions in federal income taxes. President Bush signed, two of the largest tax cuts in history in 2001 and 2003. One accounting put the total cost to the federal Treasury of those cuts from 2001 through 2013 at $4.6 trillion. As a result the total federal tax burden in 2010 will decline by 25% for the richest one percent of taxpayers and by 21% for the next richest four percent, but by only 10% for taxpayers in the bottom 95 percent of the income distribution.
This massive upward transfer of wealth has been broadly supported by ordinary Americans, despite that the benefits would go mostly to the rich. (You are among that number and people like me that just can’t understand why you fight so hard to become a slave to Trickle Down economics.)

Larry M. Bartels
Department of Politics and
Woodrow Wilson School of Public and International Affairs,
Princeton University
bartels@pr­inceton.ed­u
August 2003
Revised: 5

[TexasGetsIt]

"Just since 2001 we have seen a massive additional government -engineered
transfer of wealth from the lower and middle classes to the rich in the form of substantial reductions in federal income taxes." You do realize that that makes absolutely no sense whatsoever right? Wealth can only be transferred from those that have it to those that do not (you can't take away something that people don't have). Keeping more of the money that a person makes is NOT a wealth transfer, it's just less theft.

[wesinohio]

Render unto Cesar what is Cesar's.

[suzc]

You don't get it. There is one pie. It is cut into, say, 16 pieces. It is divided originally among 16 pie-lovers. Equal playing field. Then one pie-lover says, I'm bigger so I should have TWO pieces. The rest of you can share the other 14, that's plenty for you. Then a second pie-lover says, I'm stronger so I'm TAKING two pieces. The rest of you can share the rest. Etc. Etc. Etc. THIS is the current state of immoral unethical dishonest American economics and politics. There is much less pie left for the majority to share. That is not less theft. Just theft.

[codycap]

I don't think Texas gets it.

The tax burden in 2010 will decline by 25% for the richest one percent of taxpayers and by 21% for the next richest four percent, but by only 10% for taxpayers in the bottom 95 percent of the income distribution.

You say "Wealth can only be transferred from those that have it to those that do not ."

Why is there such a big decline for the rich? Why shouldn't it be equal?

They get to save more than we do. That means they get to keep more of their wealth than we do, So that means wealth is shifted unfairly. We get to keep less of our wealth than they do dollar for dollar.

I welcome your response and will freely admit that I am no economist, But I have done considerable reading on line of economists that differ with each other and tried to understand their different view points, I try not to be prejudiced to my own point of view but I understand that is hard to do for both of us. I appreciate you pointing out any faults you find in my reasoning as you did above. I am willing to have my point of view changed by facts but I refuse to change it because of opinion.

Thank you again

[R2D2-51]

That’s because as the late Edward Bernay's once commented, who was Freud's nephew and considered the Father of public relations & created the social phenomena of "Engineered Consent" said, that "manipulating the masses is easy, because the American people are stupid".

They still don't get it, and never will, nor will they do anything about it.

[racetoinfinity]

Those tax cuts were one of the main tasks he was put into office to do. Another was to start a war for hegemony in the MidEast and for corrupt profit for his oil and military contractors (including himself in proxy) buddies in Iraq. A third was to gut government agencies, and show them to be ineffective, thereby proving Ronnie's reactionary maxim that "government is the problem."

[Reiner-von-Sinn]

If you haven't already felt it or suspected it, here's the proof in black and white.

Thirty years of trickle-down reaganomics, and GWBush-ste­al-from-th­e-poor-to-­give-to-th­e-rich-ono­mics has boosted the already rich, rich, fabulously rich and simultaneously decimated the middle and working classes, wiped out American manufacturing and totally f**cked state, county and municipal tax bases.

[R2D2-51]

Yup! As the American people sit idly by sucking it all up.

[Runwin]

Oh forgot to add...


Or you could work towards equality of outcome, like we do in Europe. In which case the richest will stop working and your economy will collapse because the rich will not work to support those too lazy to work at all. In the UK we pay many people just below the national average benefits and they do not work at all. They are a leech on our society and we tolerate it. Good luck with your own decisions. Look at the UK and see where you are heading before you jump headlong into misery.

Please tell me that your nation is not yet so far gone as to not understand. I used to want to live in the US and would almost have killed for a change to move there. Now I am uncertain that you are any better than us. This crisis has underlined how much US opinion has changed against people willing to work hard. Who knows one day maybe your richest people will pay 90% taxes like ours did once, until they all left the UK and we saw none of their tax money not even the 40% they payed before. If you think that the rich are too stupid or too poor to move if you over tax them you are dead wrong. And this article has shown that the comparatively poor voted for the presidents you so hate.

[Runwin]

I love how you seem to think that rich people should pay more. You do realize that you have a choice to not work for them right? You could set up your own company and make you own money that way.

The real problem with America is that its once industrious people have followed Europe into mental slavery whereby you feel, like we do, that government and the have's should support the have-nots. Thats idiotic! If you come out of college and decide to work to make someone else wealthy don't then sit there and complain. The reason the US became the worlds largest economy, and only super power, was partly European wars but principally your more industrious attitude. You are following us into the abyss of stupidity.

Get it through your heads that equality can only ever mean EQUALITY OF OPPORTUNITY not equality of outcome. Strive for the latter and you will end up with a society of stupid idiots unwilling to work. If you strive for equality of opportunity then all your peoples will grow up believing in the American dream of being self made and be industrious and hard working.

[suzc]

Oh, for pete's sake!!! How stupid can you be!!!
There is NO EQUALITY of opportunity in the USA!
None. Zip. Zilch. Nada.
THAT IS THE PROBLEM.
If the trillionaires who have made themselves so rich basically on the backs of the working class of this country -- JUST like the poorest of us have been living on the backs of the working class of this country through the welfare and other NPO supports which they now call ENTITLEMENTS for heaven's sake -- if BOTH FILTHY RICH AND VERY POOR were not living off the working classes, then there MIGHT be equal opportunity.
But until there is a LEVEL PLAYING FIELD, which Congress obviously opposes strongly, there will NEVER be EQUALITY of ANYTHING in the USA!
Get a grip!
It is the THIEVES in Washington, on Wall Street, in banks and mortgage houses etc, who are the problem! And Americans don't do anything because they are either benefitting from it or working three jobs to keep food on the table (and understanding their votes no longer count).

[Mark C Objectivist]

What happen to the share of income taxes paid? I bet the number also goes up. Freaking socialists won't be happy until all of us are out at the collective farm growing whatever "The One" tells us we need.

[R2D2-51]

This is the kind of stupidity Edward Berbay's was referring too, and why they laugh all the way to the bank when they hear commrents like this. LOL, buts its actuallly sad that they believer their own BS.

[codycap]

I gave up and googled your question for you. It is a couple of messages up, See how easy it is to learn if you try.

A bit of free advice - never bet on something when you don't know anything.

[UrbanRevolution]

the top 10% or less of earners pay at least 50% of all income taxes, okay? So what does that have to do with anything. Does that mean that the middle class should grow at a slower rate? Does that mean that the gap between the highest paid Americans and middle class americans should continue to increase? And if so to what point. Until we're just like the developing nations that we so arrogantly turn our noses up at?

What made this country great is a big middle class - it is the expansion of the middle class that will allow this country to continue to flourish as we become a more educated nation. Instead we're moving in the opposite direction. (our education system by the way is a socialist education system)

[Featherdust]

And as the gap between rich and poor gets wider, the glitterati tout their greeness while flashing obscenely pretentious bling:
http://ecohearth.com/eco-news/eco-op-ed/837-the-beast-of-bling-how-wearing-jewelry-harms-the-planet.html

[KimoSave]

reaganomics: let the rich keep getting richer, and kick everyone else to the curve.