The Census won't count it. The IRS won't tax it, at anywhere near full freight. What is it? It's enough, all by itself, to keep grand fortunes constantly soaring.
Can we start the century over?
Economically, new Census Bureau income stats released last week suggest, our 21st century so far rates as the worst century in American history. We are hurtling backwards — at an alarmingly rapid rate.
The typical American household income, $53,164 in 2000 after adjusting for inflation, stood at just $49,445 last year. Incomes for the typical working-age household — under 65 — have dropped over 10 percent since 2000.
The number of Americans living in poverty, meanwhile, is rising. In 2000, 11.3 percent of Americans rated as officially poor. Last year, 15.1 percent fit the poverty definition — under $22,314 for a family of four — and almost half those in poverty, 44.3 percent, had incomes less than half the poverty threshold.
What about households at the other end of the income spectrum? The annual Census Bureau figures on incomes at our tippy top have never been particularly helpful. Census statisticians, to protect the confidentiality of the households they survey, “topcode” income categories — at $1.1 million.
We know, as a result, exactly how many American households made under $10,000 last year or between $50,000 and $60,000. But we have no clue, from the annual Census figures, how many made over $5, $10, or $20 million.
The even bigger shortcoming with the annual Census stats: The Census income survey doesn’t count “capital gains,” the profits from the sale of stocks, bonds, and other assets. Capital gains just happen to make up the single biggest category of income America’s super rich pull in every year.
In fact, as the Washington Post reminded us last week, capital gains make up nearly 60 percent of the income that goes to America’s 400 highest-earning taxpayers. Since the early 1990s, over 80 percent of all capital gains have gone to America’s richest 5 percent — and almost half to the richest 0.1 percent.
None of this capital gains income shows up in the new Census income figures released last week, the prime reason why the Census data show the average income of America’s top 5 percent, adjusted for inflation, down over the past decade, down even more sharply than incomes in America's statistical middle.
Top 5 percent households took home an inflation-adjusted $320,000 in 2001, according to the Census figures out last week, and only $288,000 in 2010.
But these totals bear only a passing resemblance to the sums households in the top 5 percent have actually been raking in. We know that for a fact, thanks to statisticians at the IRS. Their IRS annual reports do include capital gains income.
What sort of difference does this inclusion make to America's income picture? A quite substantial one.
Between 2001 and 2008, the IRS stats show, the top 5 percent's share of America's national income rose from 31.99 percent to 34.74 percent. The Census Bureau annual data have the top 5 percent share, for these same years, falling from 22.4 percent to 21.5 percent.
A distressing irony lurks in all these numbers. The Census Bureau doesn't count capital gains income. The IRS doesn't tax it — at anywhere near the tax rate that applies to ordinary income. In real life, this preferential treatment for capital gains serves to make the super rich ever richer.
The world of professional baseball offers a particularly vivid example. In 2010, all Major League players will pay a 35 percent tax on any salary over $373,650. Any Major League owner who sells his franchise this year, by contrast, will pay just a 15 percent tax on the capital gains mega millions he makes on the sale.
That's not, of course, the fault of the IRS. Over the past three decades, Presidents and members of Congress, both Democratic and Republican, have opted to lower the capital gains rate — and kept it low.
Still, capital gains only make up part of our national inequality story, and the latest Census figures, even without any capital gains data, do have important inequality stories to tell.
One such story: According to the new Census stats, the nation's income divide between households at the 95th percentile — that is, households making more than all but the nation’s top 5 percent — and households at the 20th and 50th percentiles has, in modern times, never been higher.
Back in 1968, households at the 20th percentile made an inflation-adjusted $18,251. Households at the 95th percentile that year took home $156,316. In 2010, 20th-percentile households had incomes only slightly higher, just $20,000. The much more robust 2010 income at the 95th percentile: almost $181,000.
Overall income inequality, the new Census Bureau annual income report concludes after presenting stats like these, definitely “is increasing.”
Much, much faster, unfortunately, than the Census stats show us.
Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Read the current issue or sign up at Inequality.Org to receive Too Much in your email inbox.
Saturday, September 17, 2011
Because tax cuts are only good for the rich, of course. We peons wouldn't know what to do with that money, anyway. We'd probably just spend it and maybe increase employment and the number of middle class families.
Friday, September 16, 2011
Thursday, September 15, 2011
If you want to know why we are so screwed as a nation, you can probably find a couple of dozen good reasons. But this, I say, is right at the top of the list.
From MSNBC, with Chuck Todd filling in for Andrea Mitchell:
Richard Stengel, managing editor of TIME magazine: I think [Rick Perry's] on to something. Do Americans really realize that there is no such thing as a social security trust fund? That it's a pay as you go program and when there are fewer paying in than what you get out? Are they're any people under 35 in America who believe that Social Security is going to be there as it is and was for their parents? So I think he's hearing something that maybe the other candidates aren't hearing.
Right. He's hearing you, spouting misinformation that's been spread by the financial services industry to make people believe that the Social Security system is going broke.
Yes, there is a trust fund. It's been conservatively invested in US treasury bonds. Current contributions and those bonds will keep the checks coming at their current levels for another 35 years --- at which point it will only be able to pay out about 80% of what it's paying today unless we do the only intelligent thing and ask people who make over 100k to pony up the same percentage of their income that everyone else does. That's it. That's the crisis.
If people under 35 think it won't be there for them it's because journalists like Richard Stengal don't do their jobs. Yes, he's accurately reporting what people inaccurately believe. He just forgets to present the real facts and correct their misapprehensions. And then goes on to praise presidential candidates for being savvy enough to flog the same misinformation.
We have a very serious problem with epistemology in this culture and a huge part of it is due to the press. I don't know how to fix it. But until we do, our politics are going to be distorted and dysfunctional.
When I first heard her say that some mother had approached her after a debate and said that her child had become "mentally retarded" after receiving the vaccine, my first thought was that the "reporter" doing the interview should have asked for the name of the woman (you hear me, Matt?!) since one would think that this was a big story if true (and almost as big if not). Since the talking heads on most of the TV "news" shows don't know how to ask questions they aren't given in writing ahead of time, this wasn't going to happen. So I'm very glad that some socially conscious scientists are taking up the slack some here. Of course, the damage has already been done and Bachmann won't be challenged on this any time soon. Too bad she won't be in the running much longer, either. She was one of the most entertaining of the GOP candidates.
Tuesday, September 13, 2011
Sep 13, 2011
Morning Smoke: Hiring Private Contractors Wastes Billions, Study Finds
Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog editor.
Use of Private Contractors Doesn't Save Government Money, Study Finds
Ron Nixon, The New York Times
NRC Staff: Reassess Earthquake Risk at Nuke Plants
Matthew Daly, Associated Press
Missing: Tons of US-Supplied Nuclear Weapons Material
Adam Weinstein, Mother Jones
Nuclear Miscalculation: Why Regulators Miss Power Plant Threats from Quakes and Storms
Susan Q. Stanahan, iWatch News
Study Shows Revolving Door of Employment Between Congress, Lobbying Firms
T.W. Farnam, The Washington Post
Militants Attack U.S. Embassy in Kabul
Alissa J. Rubin and Jack Healy, The New York Times
House Armed Services Committee to Lead Crusade Against Defense Cuts
National Defense Magazine
Defense Spending Must Have Credit Limits
Walter Pincus, The Washington Post
Predator Drones Go to Work on Domestic Front
Brian Bennett, Los Angeles Times
MSPB Won't Reconsider Air Marshal Whistleblower's Firing
Stephen Losey, Federal Times
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Death by poverty, fuck yeah!
by Big Baby DougJ
Okay, Sully had the best blow-by-blow and noticed my favorite part, where people shouted “yeah” when Wolf Blitzer asked if we should let uninsured people die from lack of access to health care:I am more surprised at the cheering of someone dying because he couldn’t afford intensive care. Yes, the GOP is now not only cheering executions; they are cheering people dying because thay cannot afford any health insurance. Cheering death by poverty. “Yeah!” came the cry at the thought of a twentysomething dying because he didn’t have insurance. I didn’t think I could be more shocked by the instincts of those in the Republican base, but I just was.
Update. As many of you have pointed out, the Wolfman stipulated that the dying person could have afforded insurance and chose not to buy it.
Remember that Sermon on the Mount thingy when Jesus said, "Blessed are the poor, for they will be left to die in the streets?" No? Me neither. What about the part where he said, "Blessed are the rich, for they shall pay no taxes and add to their assets without restraint?" Me neither. How about, "Blessed are the meek, for they shall inherit the debt of their forefathers." Classics!
Monday, September 12, 2011
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