A Tax Day Reminder: Inequality Looks Different If You Look after Taxes
Contrary to popular belief, the richest 1 percent of Americans have not gotten richer during the past decade — as the chart below, showing after-tax income changes, shows. In fact, by Burtless’s calculations, the richest 1 percent of Americans are the only group whose incomes shrunk, falling by an average of 4 percent.
The incomes of all other groups have grown during this same period, and in fact the incomes of the lowest quintile have actually grown the most, at 20 percent. All other income quintiles or percentiles grew by 8 to 13 percent during the first decade of the new millennium. According to Burtless, this can be explained by the fact that, while everyone was affected by the 2008 recession, the richest 1 percent of Americans were hit the most (mostly because they derived a larger share of their incomes from investments than other income groups).
Looking at the 1979 to 2010 period, one does see inequality rise, but only between the 1 percent and the rest. The average incomes of all other quintiles did grow healthily (by between 36 and 49 percent):
One reason why so many Americans believe that the average incomes of middle- and low-income Americans have stagnated and that the average incomes of the top 1 percent always rise is the commonly cited income statistics from the Census Bureau – which only consider before-tax income. This approach understates the well-being of Americans who receive income-tax subsidies and overstates the well-being of Americans whose incomes are taxed at higher rates. Analyzing after-tax income levels provides a clearer picture of income trends in the United States, particularly as the tax code is frequently employed to redistribute income as a matter of policy.
I <3 Veronique de Rugy
1:48 pm • 16 April 2014 • 8 notes
5 Years Later - What Did Obama’s “American Recovery & Reinvestment Act” Achieve?
Nearly $30 of government intervention to create $1 of economic growth.
"The failure of the stimulus was a failure of the neo-Keynesian belief that economies can be jolted into action by a wave of government spending. In fact, people are smart enough to realize that every dollar poured into the economy via government spending must eventually be taken out of the productive economy in the form of taxes. The way to jolt an economy to life and to sustain long-term growth is to create more incentives for people to work, save and invest. Let’s hope Washington’s next stimulus plan is aimed at reducing the tax and regulatory burden on American job creators."
10:59 am • 18 February 2014 • 69 notes
Worst February Start for Stocks in 32 Years
Since the announcement of the Fed’s taper, all major equity indices are negative.
I bet Janet Yellen is feeling the heat right about now.
4:27 pm • 3 February 2014 • 5 notes
Census data on income distribution reveal evidence of rising income levels for a rising share of American households
And that movement of the middle-class (and the lower-income group) was so significant that between 1967 and 2009, the share of American households earning incomes above $75,000 more than doubled, from 14.4% to 31.6%. Further, the bottom chart above shows that the share of US households earning $100,000 or above has more than tripled from 6.1% in 1969 to 20.1% in 2009.”
Important to keep in mind when discussing income inequality.
10:46 pm • 6 January 2014 • 4 notes
13 data milestones for 2013
In the course of conducting public opinion surveys and demographic analyses, the Pew Research Center found a wide range of data milestones, breakthroughs, peaks and valleys in 2013.
The libertarian moment.
11:50 am • 27 December 2013 • 6 notes
Chart of the Day: This Is What “Generational Theft” Looks Like
After you graduate, the US will be in the thick of the “generational theft” issue; here’s a heads-up on what this is all about. Generational accounting is an estimate of who benefits from and who pays for government programs. As shown in the first chart, the average person in the generation that turned 65 this year received $327 thousand dollars more in lifetime government benefits than they paid in Federal taxes. On the other hand, children born in the future (e.g., yours) will have a lifetime deficit on this basis of -$421 thousand dollars. If it sounds unfair, it is.
8:39 pm • 17 December 2013 • 13 notes
This current price spike is making last spring’s look like a blip
FYI: A United States Senate panel is holding a hearing on bitcoin today.
11:22 am • 18 November 2013 • 88 notes
Nothing to see here folks, move along.
12:31 pm • 16 November 2013 • 29 notes