Income Distribution

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The_rich_get_buff

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  1. Gabriel M. commented on Sep 1

    In the US there’s also considerable vertical mobility so I guess you should paint a toe instead of the nose and the nose in the place of the toe. ;-)

  2. eightnine2718281828mu5 commented on Sep 1


    considerable vertical mobility

    Which is why we need to have a highly progressive tax system; that way we give you low tax rates when you’re trying to accumulate capital early in life and you pay more when you enter your billionaire phase later in life.

  3. wcw commented on Sep 1

    Actually, Gabe and 89…, vertical US income mobility is a myth. It’s easier for a poor man to become a top-quintile earner in Germany than in the US.

    We are better than Mexico, though.

    And that’s just sad.

  4. phil commented on Sep 1

    wcw, been reading “how to lie with statistics” lately? compare Germany’s “top quintile” to the US’-

  5. teddy commented on Sep 1

    Phil, does that chest and do those biceps look normal or fake to you? Looks like silicone implants in both, but ya can’t deny that they’re there.

  6. ndk commented on Sep 1

    If that were drawn to scale, all we could see is the top rim of the hat.

  7. peanut commented on Sep 1

    we need a consumption tax system

  8. whipsaw commented on Sep 1

    per teddy:
    “Phil, does that chest and do those biceps look normal or fake to you? Looks like silicone implants in both, but ya can’t deny that they’re there.”

    Of course they are there, that was the whole point of passing an income tax instead of a wealth tax in 1913. Contrary to MSM myth, most wealth is old wealth and taxes were/are designed to keep that intact. The middle class had a run of 50 years or so and now it is effectively just the debtor class.

    For every Paris Hilton, there are 10,000 intelligent, educated people who are wondering how they will ever get beyond where they are right now? The answer is that they will not, it costs less to fire them and get somebody in India to fake his way thru whatever the task is than it would to reward competence.

    That’s pretty much where we are now, globalized serfdom.

  9. bob commented on Sep 1

    I am amused at the fact that those who have become rich and moved up the income ladder under the old rules want to change them now to benefit their new position in life. It is not fair game for those who follow to have the same chance. Greed wins in the new USA and the office it buys with it. All for one and one for all, a fairy tale. Enjoy labor day, all.

  10. rick commented on Sep 1

    Brazil!!!!!! the new economic role model for the US.

  11. Johnny V. commented on Sep 1

    sheesh, more class warfare. Anyone can be rich if only they’d take risk and try. Since the masses are usually too lazy and fearful to take the plunge and go for it (this includes white collars too) what you get instead is blamemongering, griping, excuses, and stupid cartoons. The US has the best environment for getting rich on the planet. If we don’t then why do we have so many more billionaires than the rest of the world?

    Barry, this site has definitely become a pessimist bear cave. My suggestion is to stop focusing on everything that’s wrong out there and how bad people think things are, and instead start focusing on opportunities to make money and get rich. Even if bad news comes out I think one needs to discuss it from the point of view of “how do I get rich using this info?”.

    Thanks and have a great labor day.

  12. whipsaw commented on Sep 1

    per Johnny V. Troll:
    “Sheesh, more class warfare. Anyone can be rich if only they’d take risk and try. Since the masses are usually too lazy and fearful to take the plunge and go for it (this includes white collars too) what you get instead is blamemongering, griping, excuses, and stupid cartoons. The US has the best environment for getting rich on the planet. If we don’t then why do we have so many more billionaires than the rest of the world?”
    s
    Class warfare began on the day that Raygun was sworn in, so it is not a new issue. If you believe that you only have to roll the dice and “try,” that just tells me that you are either some radio call-in loudmouth who has never had a penny at risk or some trustfund baby who never understood how anything works to begin with.

    Why don’t you tell me how you how you have your balls out in the market, boy? Tell me about some specific trades and how you have pocketed the spoils. My guess is that you are just spouting the wisdom of ignorance.

  13. wunsacon commented on Sep 1

    >> I am amused at the fact that those who have become rich and moved up the income ladder under the old rules want to change them now to benefit their new position in life. It is not fair game for those who follow to have the same chance.

    This is an attack that can be — and is — levelled at anyone who (a) ended up at the top of the heap and (b) is smart and honest enough to understand “the role of chance in markets and in life” and say “hey, although I succeeded, the system would be fairer if we changed “X”, “Y”, and “Z”‘.

    It’s powerful rhetoric, very persuasive to about half the population. It helps the listener tune out any recommendations for change on the basis of some suggested “motive”. (“They” have “an agenda”, so I’m not going to listen.)

    >>Anyone can be rich if only they’d take risk and try.

    Do risks always play out in the risk taker’s favor? If so, then your statement would be correct. But, they don’t. If it were that easy, everyone would be rich. (I’ve taken a LOT of risk, work my ass off, and I’m not rich.)

    Take 1,000 monkey stock pickers and some will do much (much) better than others. That’s natural. So, when you see someone who attained “financial success”, how do you know how much merit, risk, hard-work, etc. the person put into achieving that success? You don’t. (Not without really getting to know the person. Most times that’s happened but not always, I’ve been less than impressed.)

    We work in a system where there is SIGNIFICANT misalignment between contribution and reward. Highly progressive taxation starting at the top 1% redistributes the wealth the economic system really generates and which is effectively “captured” by people who have tremendous personal leverage by virtue of their position.

    For example, right now, we are witnessing a tremendous growth in corporate profits thanks to stagnant American wages, which are kept down thanks to globalization. The execs and top 1% (who own 50% of the shares) did not invent globalization. Yet, they’re getting the windfall. You have to ask yourself whether it’s fair and appropriate for the windfall to go to them rather than be shared with the rest of us.

    Anecdotally, the Walton family heirs’ rewards have zero to do with their contributions. And their heirs in turn will live off interest and dividends from your children’s work at the companies whose stock they own.

    Only a highly progressive tax on the top 1% redistributes the income which top earners “captured” on account of the unique, tremendous leverage they already possess.

    Other tidbits:
    – As it turns out, wealth is distributed according to the power law; not according to the bell curve of people’s abilities and work ethic. You have to ask yourself “what factors contribute to this distribution?”
    – Hint: there is truth to the statement that “To turn $100 into $110 is work; To turn $100 million into $110 million is inevitable.” It’s the simple principle that “success begets success” and “wealth begets wealth”.

    You CAN introduce more fairness WITHOUT choosing a different economic system: you just have to re-introduce higher progressive taxation.

    Pardon some of the non sequitors. I’m hungry and want to eat.

    -wunsacon

  14. Norman commented on Sep 2

    All of this is fun but of course the Big Picture is about facts and those are: The income disparity is between those with college educations and those without. No ha-ha’s here.

  15. Steven commented on Sep 2

    Great youtube videos

    Johnny V. – The United States ITSELF has become a “pessimist bear cave”. Consumer sentiment numbers are low, The bond market is increasingly inverting the curve… For whos sake should Barry be blindly bullish about money making opportunities? Where is the wisdom in assuming risks at this point?

  16. brion commented on Sep 2

    “Anyone can be rich if only they’d take risk and try. Since the masses are usually too lazy and fearful to take the plunge…”

    enrichez vous?

    Don’t forget Porn Johnny V….and drugs; legal, but especially illegal drug sales yeah that’s the ticket (no taxes=genius!).

    What could be more noble than INHERITING wealth? Not much unless it’s cooking up a really neat Ponzi scheme….
    Military contractors? Now THERE are some folks we can all look up to with immense patriotic pride. I’ll bet the richly rewarded folks working on that Missile Shield thingy are bootstrappers all…..

    It’s risky to cut the pension and health benefits of your company’s emplyees as your own vast stock options vest but this GREAT system of ours wasn’t built by fearful men……
    I could go on and on about the abundant and virtuous wealthy of Amerika….

    (…now where’s my Mother#&$@ing pitchfork)

  17. KirkH commented on Sep 2

    The poor will attack the rich if they don’t pay the entitlement fee. The problem is that productivity is rapidly increasing the ranks of the poor so progressive taxes may be the only way to keep them at bay, even though it corrupts the original intent of law. The coming recession will be a nerve racking time for those with money.

  18. Barrister Musa Issah commented on Sep 2

    My suggestion is to stop focusing on everything that’s wrong out there and how bad people think things are, and instead start focusing on opportunities to make money and get rich.

    My Dear

    Greetings,I know this mail may come to you as a surprise,I am Barrister Mussa Issah the solicitor/counsel to the late Sanni Abacha who was then before his death, the President/Head of State of the Federal Republic of Nigeria.

    Just yesterday his widow wife Mrs. Mariam Abacha called to intimate me of the condition of her family over the pursuance of fund by the Government over the husbands alleged loot.

    In fact, She conferred in me that her son was working with a German National only for the German to take advantage of the situation, there by setting her son up in Germany where he went to claim his father deposit. You can verify this fact your self through the German Embassy over an alleged Abacha’s Son, Mr. Abba Abacha trying to pull out the sum of (US$40 M) Forty Million Dollars from the Bank.

    At this point in time, She solicited my humble self to look for a reputable gentleman who will be of great assistance to the family and somebody who can take over the sum of $27M (Twenty Seven Million United States Dollars Only)which is presently deposited in a Security Company, for investment. I will later on the course of this transaction disclosed to you the Security Company accordingly.

    If you will be interested to act upon on receipt of this mail, please do contact me on the enlisted contact adress and more so be kind to issue me with your current Telephone Number for prompt conversation.

    Thanks for your sincere understanding while looking forward to your positive response/cooperation.

    Regards,
    Barrister Musa Issah

  19. rick commented on Sep 2

    The poor will attack the rich if they don’t pay the entitlement fee. The problem is that productivity is rapidly increasing the ranks of the poor so progressive taxes may be the only way to keep them at bay, even though it corrupts the original intent of law. The coming recession will be a nerve racking time for those with money.

    Posted by: KirkH | Sep 2, 2006 4:02:56 AM
    ……………………………………………………………………..

    Maybe there will be more kidnappings like in Brazil,,,
    of rich folks like Johny V.
    Extremes of capitalism does not work.

  20. Tom in Indy commented on Sep 2

    Reg. getting rich, Of course there is always the old fashion way. The way my parents did it starting with nothing. Living below your means (forgoing the latest anything) Not being self indulgent. Tithing to the church. Tithing to your savings account. Buying CD’s(certificates of deposit) and bonds. Living in the same house and community for decades. Paying off your fixed rate mortgate. Holding a couple (3) conservative stocks for decades. Having a job you love and working until you are 70. Taking vacations all over the world on the cheap. My mom and dad lived this way, raised 5 kids (who all are successful professionals) and are living out their last few years together(they are both 90) in the nicest assisted living joint in Indy eating gourmet meals sitting on a pile of cash. Don’t tell times have changed. That is just a losers excuse. It takes self discipline and faith to accomplish what they did. The most important points are 1-4 above. Tom in Indy

  21. alexd commented on Sep 2

    Tom
    I am happy that your parents and you are all doing well. I think that many people feel that our social fabric is being stretched in ways that might make it harder to do what your parents have done. People who have worked hard and then suffer dislocation due to foreign workers taking their jobs might find themselves in very hard times and not know where to turn. While your parents were growing and working America was a net exporter, the county’s wealth was increasing. Now we export our wealth. So if less is coming in it is a problem. With America’s growing population, a financial situation where there is less to go around for a greater percentage of the people means that the quality of life (in the material sense) is likely to diminish for many. We have seen many cases throughout history where one group so totally dominates another that eventually the goup that is getting shafted looks to change the situation. Revolution after revolution.
    On a micro scale the possiblities for those who are gifted with talents that are appropriate for their time and place are still present but the quality of life as evidenced by a diminishing earnings level for those not on the top and a worsening health care crisis points to a bad turn for America. I hope things will soon turn for the better.

  22. rick commented on Sep 2

    hey TOM, what you said about your parents and
    mine are true, in their time.
    Today, things are different.
    Don’t tell me the middle class is more healthy
    today than in your parents time ??

  23. emd commented on Sep 2

    reading the comments from the last few days, people seem to be getting a little worked up. good thing we have a 3 day wknd…

    good cartoon, barry.

  24. teddy commented on Sep 2

    Johnny V., Tom in Indy, and Norman, tell all those just announced laid off workers at world class Intel that they’re not smart, well educated, and hard working, after all they made Intel world class. Intel’s stock went up .31 on this deflationary news, which along with the other coming layoffs, will lead to lower interest rates here in the US, expansion of stock P/E’s, and a softer landing for the housing market with consequent, of course, more debt creation to inflate the worldwide financial bubble. Can you guess where those jobs went. Most of the US productivity gains recently were made in China and India. It’s not a question of education anymore, but wages. Soon you will see the export of medical surgical procedures to Bangalore, India because the results are just as good, but mainly because it’s cost basis is 5% of that here in the US.

  25. wcw commented on Sep 2

    Phil, I take it you neither know the literature on mobility, nor know how to make a rhetorical point. That the top quintile in the US is richer than in Germany does not speak to mobility. It speaks to total wealth, in this case mostly concentrated in the top 0.2% of the US distribution. For those who do not know the data say: in all countries, it is difficult for the son of a wealthy father to fall out of the top quintile; it is much more difficult for the son of a poor father to escape the bottom. Both happen, but neither enough to congrue with an even somewhat meritocratic society.

    This rigidity is more pronounced in the US than in Germany, though there was a time (immediately post-WWII, mostly) when this was reversed. This simple and unfortunate fact undercuts all the land-of-the-free trolls. That said, I am happy I live in a country that celebrates this mythology, since I share their ideal, if not their unwillingness to read. If we open our eyes to the stratification of society, perhaps our ballots and proxies can start to help change things for the better. Videlicet our current executive, whose apotheosis by adherents is an object lesson in the death of American meritocracy if ever one existed.

    On the risk of ending up like Brazil, the intelligent right wing probably should embrace the Canuck-style red tory attitude. Take care of the working class lest it rise up and take care of you.

  26. peanut commented on Sep 2

    Deleted and banned due to IMBECILITY

  27. Zephyr commented on Sep 2

    If I take the time to plant seeds and nurture them as they grow to be fruit trees, and I fill my yard this way, someday I will have an abundance of fruit. Am I not entitled to this fruit?

    If my neighbors never bother to make this investment they will have no fruit. When they look across the fence they will see a “rich” neighbor who sits in the shade of his trees eating fruit while they have no shade and no fruit.

    They will not see my early investment as the cause of my abundance. Nor will they understand that their own lack of planning and investment is the cause of their shortage.

    Some will say that I have hoarded all the fruit. However, I have increased the total supply of fruit.

    I will trade some of my fruit to my neighbors for things they can do for me. They will complain about the income distribution. However, had I not made the early effort/investment in the fruit trees, my neighbor would have no fruit.

  28. Anne Coulteer commented on Sep 2

    Poor people get less and have less because they are simply stupid and lazy. duh.

  29. brion commented on Sep 2

    Zephyr. What’s up with the freaking fruit?

    That charmless little non-parable is a world view, ( and a pretty f’ed up one at that) it is NOT an illustration of thrift/Industry

    “I’ve got MINE Jack ’cause I’m bitchen and people who are not me suck….”

  30. alexd commented on Sep 2

    Zephyr

    Who owns the land?

    Works for fruit, but do you really think it covers all the situations in the world? Nothing wrong with the idea of preparing for the future. Just like the current group is preparing for our children and their children to pay back what they have borrowed…..

    Like borrowing your fruit and then disapearing.

    If you do I have some magic beans…..

    (which you can plant next to the fruit tree’s.

  31. Johnny V. commented on Sep 2

    Historically there are 3 LEGAL ways to make it big in the US: invest in stocks, invest in real estate, or start a business. Note how working at a job is not one of those ways…unless you can make CEO (though the odds are against that for most everyone including me). IMO people focus too much on jobs and not enough about taking care of business for themselves. I sympathize with the Intel workers that got laid-off, but now that they are unshackled why can’t they start a bunch of tech-businesses on their own? Not all will make it but some might. Ultimately they might then go IPO, even become billionaires, and have certain pessimistic & angry blog-readers rail against them as well about what terrible people they are. In fact, getting laid-off from Intel might be the best thing that ever happened to some of them…provided they take the risk and try instead of being lazy and watching TV all day. They may not succeed on the first try but they might on the 3rd or 4th.

  32. Tom in Indy commented on Sep 2

    Teddy, you are right about the medical field. I have a friend who flew to India for hip replacement surgery. Couldn’t afford it here. My answer at 51 yoa is to enroll in Purdue U. for some online classes that will upgrade my education and skills in the degree that I earned >25 years ago. It will cost me >20K and a lot (3 years)of evenings spent studying to accomplish my goal, but I wouldn’t bet against me finishing it.
    Rick, nothing has changed for the middle class. Hard working people who are willing to postpone gratification get ahead. How you invest what you earn is personal choice. Those who want to gamble with their earnings to win more doubloons, candy, or funny money don’t come out ahead. They lose it. Zephyrs fruit orchard analogy is exactly what the US has. Unless you are as smart as brion.

  33. brion commented on Sep 2

    I’m not talking about the merits of self-reliance and provision.
    My point, TomInIndy, is that Zephyr’s is a homely little homily that has imbedded with in it a nasty world view that assumes the superiority of the narrator in a world of shiftless jealous losers.

    add to that its’ vaguely biblical pomposity “….someday I will have an abundance of fruit. Am I not entitled to this fruit?..” and i call bullshit.
    Forthwith am i not entiltleth to mine opinion?
    “The Fruit Tree” sucks aesthetically and was written by a pompous self-satisfied cretin.

  34. wunsacon commented on Sep 3

    The fruit orchard economy toy model has pedagogical value to 8th graders. If you add layers of complexity to better approximate reality, the resulting model might become relevant.

    For instance, the model doesn’t explain why wealth is distributed as a logarithm, while people’s skills and work ethic (and likely risk-taking, which someone mentioned earlier) are distributed more along the lines of a normal distribution. How could it? The model doesn’t even begin to address factors such as disability, inheritance, access to education, proximity to people with wealth and power, network effects, scarcity, operating leverage, luck (probably the last thing the orchard-model school wants to admit exists), cheating (the other last thing), insider knowledge, tax policies, and more.

    And what of Barry’s post that started this thread — the observation that this “recovery” has been far better to the upper class than prior recoveries? The model tells us nothing.

    Why even bring up a toy model in a discussion about problems that can only be observed (and thus addressed) at a higher level? Problems can not be solved at the same level of awareness that created them. And certainly not at a lower level.

    >> even become billionaires, and have certain pessimistic & angry blog-readers rail against them as well about what terrible people they are.

    Which posts on this board said anything about billionaires being terrible people? The nearest thing I see to what you describe are posts which recommend changes within the economic system to more fairly share the burdens and rewards. Some of those recommendations used to, in fact, be bigger features of the tax code (i.e., estate tax, highly progressive taxation).

    >> I sympathize with the Intel workers that got laid-off, but now that they are unshackled why can’t they start a bunch of tech-businesses on their own? Not all will make it but some might. … In fact, getting laid-off from Intel might be the best thing that ever happened to some of them…provided they take the risk and try

    Unshackled? Many of those were good, high-paying jobs. And the prospect that one of them hits it big is…what? Is it consolation for the rest of them? For society? Wow. What a “game show” mentality.

    >> instead of being lazy and watching TV all day.
    >> Poor people get less and have less because they are simply stupid and lazy. duh.

    There’s a lot of truthiness in these statements. Nothing helps you tune out economic issues and feel superior faster than saying “poor people got what they deserve!”

    >> They may not succeed on the first try but they might on the 3rd or 4th.

    Unless you start off rich (or famous) and lose other people’s money in your ventures, you don’t get 3 or 4 chances; not without saying goodbye to your spouse and auctioning off your children.

    >> IMO people focus too much on jobs and not enough about taking care of business for themselves.

    The economy does not need and will not sustain a zillion entrepreneurs. (Maybe it doesn’t need and won’t sustain many more than there are right now?) Consider: (a) Some efforts require teamwork; (b) As the size of the team increases for larger and larger projects, you in turn need leadership; and (c) Someone has to be a leader and the rest have to work for that person. Can you imagine an economy where everyone who works for INTC, GE, MCD, and JNJ just goes off and starts their own business? Productivity would plummet and most of the people who might take your advice would end up in the poorhouse.

  35. phil commented on Sep 3

    Johnny V give up, the walking wounded have their minds made up and have shown why they’ll remain in their destitute pits of despair

  36. wunsacon commented on Sep 4

    You couldn’t manage a substantive reply, phil?

  37. Kim commented on Sep 4

    although it looks like a progressive tax system, one will notice that the very wealthiest do not pay the highest percentage of their “real” income in taxes as compared to middle class. The tax system is rigged for people in business with the ability to write off countless items that they personally use, but declare as business. I know…I have been in business but am retired now. The only fair tax would be a consumption tax with built in protections for low income such as no tax on food, second hand clothing, vehicle under $1000, hospitalization, drugs, medical and advanced education. Otherwise…tax everything else. Bill Gates can’t cheat much by not paying taxes on filet mignon while the rest eat corn flakes. A sales tax like this would catch the entire underground economy, and because it would be electronically sent to Washington, the IRS could nearly be eliminated as well as no filing of income taxes. This would be the most equitable tax.

  38. jkw commented on Sep 5

    There is little practical difference between consumption taxes and income taxes if all things are taxed equally. You can easily replace a consumption tax with a revenue tax on retailers and nothing will change (except possibly listed prices). But why tax only retailers? Corporate income taxes end up being basically the same as consumption taxes except that the tax level is higher for higher markup items and lower for lower markup items. Which means that luxury items automatically have higher taxation levels and basic necessities end up with almost no taxation. And it makes little difference to people whether they are paid less with no taxes (and then their employer is taxed more) or if they are paid more with lower taxes, so corporate and personal income taxes end up being roughly equivalent.

    The thing that matters is how much the government can affect economic activity through the tax code. Corporate income taxes allow the government to provide rewards for things like research, while discouraging excessive CEO compensation by not allowing a deduction beyond some reasonable level. Without corporate income taxes, the government has almost no control over how companies spend money (they can just require some things and make other things illegal). Likewise with personal income taxes. Consumption taxes allow the government to charge different rates based on what type of item is being bought.

    The question of what type of taxes we should have really comes down to one of how we want the government to be able to regulate the market. Consumption taxes have the least oversight capability, which is why conservatives prefer them. Income taxes can be progressive and provide rewards for good behavior, which is why liberals prefer them.

    If you really believe in capitalism, you should prefer corporate income taxes. Under pure capitalism, corporate profits are a sign that someone is cheating. Which means that taxing them at very high levels is the easiest way to prevent people from cheating. The real world is not so simple, and corporate profits are normally a sign of high barriers to entry. But they still seem like the best way to minimize corruption.

    The main advantage of personal income taxes is that they can redristribute income easily. If you’re not going to have progressive tax levels, then personal income taxes are far more trouble than they are worth.

    The best argument for consumption taxes right now is that it reduces the cost advantage of outsourcing. It effectively charges taxes to all companies that sell products in the US, regardless of where they are incorporated.

    Estate taxes are entirely separate, since they are not based on money being spent. People arguing for low estate taxes are arguing for the creation of an aristocracy, with wealth and income passed down for several generations. High estate taxes seem like a very American idea, since it forces each generation to make it on their own, placing people on a more equal footing so that the best can rise to the top.

    I’m not sure how you would expect any taxes to capture an underground economy. Are you expecting drug dealers to pay sales taxes? Or do you think that companies which don’t report their income or their employees to actually report how much they sold?

  39. DDr commented on Sep 6

    The Treasury Department will soon release the latest IRS data on who paid how much in taxes in America through 2004. We’ve had an early look at the numbers, and … the Bush years compare very well by tax and income equality to the sainted Clinton era.

    First, the new data show that the bottom 50% of Americans in income — U.S. households with an income below the median of $44,389 — paid a smaller share of total income taxes in 2004 (3.3%) than in Bill Clinton’s last year in office (3.9%). That 3.3% is the lowest share of total income taxes paid by the bottom half of earners in at least 30 years, and probably ever. …

    By contrast, Americans with an income in the top 1% paid 36.9% of all federal income taxes in 2004, down slightly from 37.4% at what was the height of the dot-com boom in 2000. But the top 5% and 10% of earners saw an increase in their tax share over that same period, with the top 5%’s share rising to 57.1% in 2004 from 56.5% in 2000. If this isn’t the definition of a highly “progressive,” aka redistributionist, tax code, we don’t know what is.

    Especially instructive is what has happened to tax shares since the tax rate on capital gains and dividends was cut to 15% in 2003. These investment tax cuts have corresponded with a huge spike in tax payments by the affluent. … A reasonable conclusion is that much of this increase reflects tax payments on capital gains and dividends — which have soared by an astounding 79% and 35%, respectively, since the rate cuts.

    Democrats and their media pals dismiss all this by saying that the richest are paying more taxes because they’re making out like bandits in the Bush years. Former Clinton economic adviser Gene Sperling grouses that the 1990s were “an era of shared prosperity,” but that the Bush policies have produced “a disappointing decade on inequality.”

    The new IRS report contradicts that fairy tale too. Let’s use the left’s own definition of fairness and examine the actual new IRS evidence (see chart). During the Clinton Presidency, the share of total income earned by the richest 1% increased to a post-World War II high of 20.8% in 2000, from 13.8% in 1993. By contrast, in the first four years of the Bush Presidency, the income share of the top 1% fell slightly to 19.0% from 20.8%.

    The decline in the share of total income earned was even more pronounced when we look at the income shares of the top 0.1%; they earned a greater share (18.9%) of total income by the end of the Clinton era than they did in 2004 (17.4%). Some of this can be explained by the 2001 recession and subsequent strong economic expansion. The rich got socked hardest when the stock market plunged, though the dramatic income and wealth gains in the last three years are again raising income shares of the middle and upper income groups. …

Read this next.

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