The Triumph Of "Trickle Up" Economics

CBS' Dick Meyer Stands On The Income Gap Precipice And Ponders The View

(CBS)  This commentary was written by CBSNews.com's Dick Meyer.

---

Trickle Up economics has just scored its greatest success and it is being covered up. I wonder why. Could it be embarrassment?

The Internal Revenue Service recently released its fun-filled report on 2005 individual income taxes. The headline is that the super-rich were even more super than in any year since 1986 when the IRS first had comparable data. The news pages of The Wall Street Journal duly took note, but not many others did.

The top 1 percent of all taxpayers earned 21.2 percent of all the money that individuals in the country earned in 2005. So one-hundredth of the taxpayers earned one-fifth of all income. (The data are available here.)

To get into that top 1 percent, you must have at least $364,657 in "adjusted gross income" -- income after various deductions and corrections. You're in-pocket income would be much higher.

The only year the super-rich 1 percent did this well was 2000, when they earned 20.8 percent of what we all earned. From 1987 to 1996, by contrast, the top 1 percent never snagged more than 16 percent of total income. In some years they only took 12 percent.

You might be more startled by this factoid: the top 10 percent of taxpayers gobbled up 46.44 percent of all 2005 income. The bottom 50 percent earned just 12.83 percent. The income for the median taxpayer was $30,881, a 2 percent drop from 2000 after inflation.

That's Voodoo Economics with a heavy dose of Texas Trickle Up. Growth at the top, flat in the middle. And 2006 could have been even better for the winners.

This concentration of wealth and income is almost certainly the most intense since the Depression era. The immediate cause is the astounding boom in the financial services industry, especially the happy people in hedge funds and private equity funds, though their poor cousins in investment banking are doing OK, too. About half of the 45 new faces in the 2007 Forbes 400 came from either hedge funds or private equity.

It would be wrong, however, to demonize the Wall Street wizards. The trend of super-sizing the super-rich is deeper than that and actually began in 1993, according to the Census Departments Historical Income Tables.

From 1947 to 1992, the top 5 percent of all families never consumed more than 17 percent of the national "aggregate income." But since 1993, that top 5 percent has never earned less than 20 percent of the national bundle.

Before 1985, the middle class -- the middle 20 percent of families -- always earned at least 17 percent of "aggregate income." The middle 20 percent essentially kept pace with the top 5 percent. Since 1993, the families in the middle have never gotten more than 15 percent of the pie. This is called a trend.

Just as it would be wrong to pick on the persecuted fund managers, it would be wrong to proclaim this primarily an issue of unfair taxation.

The new IRS figures I was talking about also show that the top 1 percent of earners (the ones who snagged that 21 percent of national income) also paid 39.4 percent of all federal income taxes. The bottom 50 percent paid only 3 percent of the national income tax bill. Looked at broadly, this is more than fair, though many super-duper rich find ways of paying at lower rates than their secretaries, as Warren Buffett has pointed out.

All of the Democratic presidential candidates talk about the issue without talking about the issue. They discuss changing the tax laws, upping the capital gains rate or changing the taxation of hedge funds and private equity. These options ought to be debated, but they miss the fundamental concern, which is a matter of values and political philosophy. On those bigger issues, the Trickle Up crowd seems to have won -- not just in Washington but in the nation.

The real world triumph of Trickle Up is a victory for people who believe two things: the worst off and average in society benefit when the most well off benefit proportionately more; society should not try to alter the distribution of income and wealth that a free and fair market produces.

This is the reigning de facto political philosophy reflected in the IRS statistics.

This is not necessarily an accurate description of empirical reality; i.e., it is not at all clear that the worst off and the average benefit when the best off benefit most, and it is not universally accepted that the market is free and fair. Nonetheless, people who believe these things have won.

So who believes these things? Democrats say only Republican politicians and the fat cats they love to love. I say this is the prevailing view of both political parties and the generation of Americans who now control the major financial, political and economic institutions in our country: the baby boomers.

Tax laws, securities regulations, and eloquent office-seekers cannot prevent a macro-organism of 300 million people from doing its thing -- from rewarding those it values and even worships. That is the meaning of the statistic stating that one-fifth of the national income is acquired by one one-hundredth of the taxpayers.

We avoid the values issue when we think this historic concentration of wealth is caused by the government.

The income gap is the result of the invisible hand of the market, of countless decisions of boards of directors to increase executive pay, of pension funds to pay high management fees, of companies to eliminate pension funds and so forth. Trickle Up reflects the country, not just Washington, and not just Wall Street.

In World War II, men of every class and region were drafted, shipped out and sacrificed. As that generation seized powering America in the '50s and '60s, the spoils of postwar prosperity were distributed more evenly than wealth and income are today.

That generation -- corniness isn't always inaccurate -- pulled together to pass the landmark Civil Rights legislation of the '60s and helped bring more equal and respectful treatment to women, homosexuals and ethnic minorities.

Their children, boomers like me, rode on the educations and headstarts we were given, declared America a meritocracy and accordingly deemed ourselves entitled to our success, Patagonia fleece and a piece of the national pie our fathers and mothers thought too big and too greedy. No capital gains rate can combat the cumulative power of the kids with the chips.

Boomers in that top 1 percent are fat and happy to be there. Boomers in the middle are fat and happy to go into their boom-down years backed by Social Security and Medicare benefits their kids will never see.

Trickle Up has won. But who is taking credit?

---

E-mail questions, comments, complaints, arguments and ideas to
Against the Grain. We will publish some of the interesting (and civil) ones, sometimes in edited form.

[missingamerica]

Makes you wonder how much *** Meyer makes.

[mcvet]

Of all the snake oil the American people have bought this INSANE idea of "Trickle Down" is the worst. Anyone who would buy the idea that IF we trash all our Union''s, Cut all the taxes on the rich and shift all the wealth to them, that they would invest in this country and we''d see that money returned to us was INSANE. They used the money to EXPLOIT poor third world workers, took our jobs to that country, make BILLIONS doing it and KEPT the money. Now if that wasn''t the biggerst SUCKER Play in history I don''t know what was. Sieg Heil Bush!!

[mlkoncbs]

For years comments like this were silenced with a snear and the question, "You''re going to bring up class warfare?" Well, class warfare has been waged, but not by the working class.

I think that John Edwards is addressing this issue head-on, not only in terms of tax policy but also by talking about the heavy-handed influence of lobbyists on all our legislation.

[perception5]

"The top one percent of all taxpayers earned 21.2 percent of all the money that individuals in the country earned in 2005. - Liberal Mr. Meyers"

What our corrupt liberal MSM wolfpack press doesn''t tell the American people is that the top 1% of wage earners pay nearly 40% of ALL taxes.

If our liberal MSM wolfpack press was really interested in the "income gap" they would should push their party, the Democrats on doing something about the poverty, dispair, and injustice in America''s "deep blue" one party cities.

Like in Detroit where only 22% of innocent children ever graduate from the Kindergarten thru G12 public school system.

Detroit also leads the nation with the highest crime rate which is DIRECTLY related to the social injustice in their school systems.

The same situation exists in other Deep Blue cities like:

Washington DC
St. Louis
Philadelphia
Cleveland
Baltimore
Atlanta
New Orleans..................on and on and on.

Democrats and corrupt liberal MSM wolfpack press ............WHERE''S THE ACCOUNTABILITY???

No Justice No Peace..............until the Democrats and their wolfpack pals in our big deep blue cities put the blame where it really belongs.

American''s don''t need these liberal lies and excuses anymore.

[missingamerica]

Many of the wealthy will not accept that they''ve piggy-backed in on the infrastructure built with other peoples'' taxes.

Now they don''t want to pay to maintain it.

The wealthy hire people to find or create tax dodges, and they pay lobbyists to get Congress to enact legislation to build in even more tax dodges. Enormous expenses, to someone making the median income, but paltry compared to what the wealthy can save by depriving their nation of its due.

As Warren Buffett has pointed out, they''ve got the tax structure so wacked that he pays at a lower rate than his secretary does.

Using the 2006 tax Y-1 schedule for married filing jointly and no tax dodges, what does a person making the median income have left to live on after taxes?

$29,313.25.

What does a person making that $364,657 in "adjusted gross income" - (as the article notes, it is far-fetched to believe that their in-pocket income is not in fact very much higher) have left to live on after taxes assuming no further tax dodges were invoked?

$257,166.55.

A staggering number, to those making the median income and less. To hear the wealthy talk about it, though, it is barely enough to keep them in beans and bacon.

To a person teetering on survival''s razor''s edge, it is simply incomprehensible that the wealthy should whine about paying another 5% or even 10% in taxes - especially when they won''t at least fight in our wars in an attempt to earn their money.

[missingamerica]

And I only took out Federal taxes...

[l8c6]

One-hundredth of the taxpayers earned one-fifth of all income.

Only fools or the super rich wouldn''t see how in the long run this threatens a democratic republic. The super rich want wall street style elections. On vote for every share owned.

So many americans seem by way of their loyalty in giving the right wing their vote, to favor the days of Britain in the 19th century. Of course there is a loud voice out there that owns what they label the "liberal" media that covers up the election fraud in this country.

Severe corruption will destroy all. The super rich in the third world countries have had a productive western world with a strong middle class to nurse off of.

[usayesterday]

People can cut their taxes by moving to states with no state income tax, such as Nevada, Washington, Texas, Wyoming, Alaska, South Dakota, and Florida. All of the aforementioned states also generally have a lower cost of living in comparison to the states where its citizens are the most heavily taxed, (California, Massachusetts, New York, New Jersey, etc.).

There are ways to reduce your taxes, but it requires some research and a little self-education.

[hungry1968]

Now if that wasn''''t the biggerst SUCKER Play in history I don''''t know what was. Sieg Heil Bush!!

Posted by MCVet at 07:49 AM : Oct 18, 2007



Actually, that would be -- Seig Heil Reagan!!

[antoniof123]

perception5 why do you cherry pick your facts the red states are also the poorest states or did you just forget that small fact. Lets start out with Alabama, and Mississippi the list goes on in fact they chew up most of your tax dollars.

When you cherry pick and you are caught they you look like a fool.

There is no easy solution it is a matter of how it is seen you know perception so if it is perceived by someone it is real.

The rich were warned by the founding fathers you remember them rich men who fought in a war for freedom. Of course the rich of today don''t do that but it doesn''t matter they warned that the rich were the guardians of freedom and should use their power for the better of the masses. Failure would not be tolerated because they stood the most to lose.

So if they continue to keep up in the direction they are going they may lose everything. I think now many of the rich are starting to see this and saying hey taxes may be a little too low for us. Check what people like Buffet are saying and listen to them they know.

[consciousnes]

The rest of the uneducated population. They either don''t know its available, don''t care to find out, are content with what they have or are too lazy and want the rest of the world to give them everything.

[jon_mccain]

Posted by perception5

Wow, your rant had it all, none of it coherent of course, but still, you''re the perfect stooge for the rich.

[jn122736]

People can cut their taxes by moving to states with no state income tax, such as Nevada, Washington, Texas, Wyoming, Alaska, South Dakota, and Florida. All of the aforementioned states also generally have a lower cost of living in comparison to the states where its citizens are the most heavily taxed, (California, Massachusetts, New York, New Jersey, etc.).

There are ways to reduce your taxes, but it requires some research and a little self-education.

Posted by USAyesterday at 09:12 AM : Oct 18, 2007
~~~~~~~~~~~~~~~~~~~~


In other words; if you don%u2019t like it just give up your country (State) and leave, rather than fighting for your rights?

[jon_mccain]

What our corrupt liberal MSM wolfpack press doesn''''t tell the American people is that the top 1% of wage earners pay nearly 40% of ALL taxes.
Posted by perception5

Oh, and next time, try reading the article before you start howling about the "wolfpack" MSM.

The new IRS figures I was talking about also show that the top 1 percent of earners (the ones who snagged that 21 percent of national income) also paid 39.4 percent of all federal income taxes. The bottom 50 percent paid only 3 percent of the national income tax bill.

[consciousnes]

You can blame everything on someone else, you can say it''s the governments fault, you can say it''s the demecrats or republicans, but when it comes right down to it, it is the individual who doesn''t have the drive to get out and work for it the way a lot of rich people have.

[jon_mccain]

but when it comes right down to it, it is the individual who doesn''''t have the drive to get out and work for it the way a lot of rich people have.
Posted by Consciousnes

You mean like fearless leader? If he hadn''t been born with a silver spoon, he wouldn''t have been qualified to manage a McDonalds.

[myidoncbs]

This idea that some of you have, that wealthy people got their wealth because they have the "drive to get out and work for it" is just total BS. The average ditch digger works far, far harder than the average wealthy guy. And there are so many factors beyond your control that determine exactly how successful you can be at anything. Conversely, there are factors (such as being born wealthy and well-connected) that can overcome even the dullest of personalities (GW, for example, who is both lazy and stu/pid, yet somehow has risen to the "top of the heap").

It''s a convenient psychological device, "I got mine because I deserve it", and it fits in very nicely with the republican mythology and allows them to feel good about being so evil, but it simply is not true.

[jjarden]

Consciousnes...You make it sound like it''s a level playing field, and that everyone has the same chance, if they would just work harder, like the rich. You fail to recognize the head start, advantages, and connections that rich families, and rich children have. We most definitely have a "Hereditary Aristocracy" in this country, and those children end up at the best schools, are funded in businesses they want to start, given jobs they are able to get through their connections. The rich have not simply gotten where they are because they have simply "worked harder." It''s naive to think otherwise. Then there is the whole issue of what exactly is working as hard as the rich. Is a Wall Street Trader or Hedge Fund Manager working hard to make a trade that net''s them 1,000,000 in an a few minutes? That''s not hard, that''s "Clever", and they are in a position to be clever because of their priviledged upbringing, education, and connections. "Finance Capitalism" is not helping ANYONE other than the people doing the trade. No jobs are created for anyone. No products are being produced to sell, or for anyone to benefit from. This is a redux of the "Age of the Robber Barons." Make no mistake about it.

[Razzl]

There''s nothing more pathetic than listening to middle-class wagearners, people who are never going to control their destiny or own anything or control any part of the economy, treat the needs of their own social class with contempt and talk up the capitalist Republican agenda as though it were their own. It must be some kind of self-hating thing, wanting to put distance between one''s roots in the working class and the place one aspires too, but in filling out the ranks of the Republicans with pathetic hypocrital wannabe''s they rob the society of the leadership the working classes so badly need in order to restore fairness to the social order. The middle class must embrace unions, social security, national health care, social services, and corporate taxation or be crushed by the tsunami of money being sucked out of their lives by crackpot "trickle-up" economic philosophy. And of course, true Christians must be sincere Socialists or else give up any hope of seeing paradise...

[jjarden]

razzl...So you disagree?...You DO think it''s a level playing field, and everyone is playing by the same rules? You DON''T think that there''s a "Hereditary Aristocracy" where children of the rich have a better head start, better educational opportunities, easy funding for their endeavirs, and better connections all around? NOW THAT''S PATHETIC and NAIVE.

[eggy1620]

ibsteve2u: Suppose you earn $364,657 in "adjusted gross income". You do that by putting in 60 to 70 hour workweeks at your office so you can afford to pay the pool guy $25 per hour to come over to your house and bang your trophy wife who never sees you. Then I come along and take $100,000 of your dollars stating, %u201CI%u2019m giving your money to your pool guy and your buddies%u2019 pool guys because $25 per hour is the highest wage you will pay before you decide to clean your own pool.%u201D How would that make you feel, ibsteve2u?

[jon_mccain]

ibsteve2u: Suppose you earn $364,657 in "adjusted gross income". You do that by putting in 60 to 70 hour workweeks at your office so you can afford to pay the pool guy $25 per hour to come over to your house and bang your trophy wife who never sees you. Then I come along and take $100,000 of your dollars stating, %u201CI%u2019m giving your money to your pool guy and your buddies%u2019 pool guys because $25 per hour is the highest wage you will pay before you decide to clean your own pool.%u201D How would that make you feel, ibsteve2u?
Posted by eggy1620

Except we all know that the guy making $364,657 would be seething at the prospect of paying someone $25 an hour to clean his pool. He would be busily sending off campaign contributions to the RNC while simultaneously demanding they institute a "guest worker program" so that he may hire a Mexican for $5 hour.

[jn122736]

but when it comes right down to it, it is the individual who doesn''''''''t have the drive to get out and work for it the way a lot of rich people have.
Posted by Consciousnes

You mean like fearless leader? If he hadn''''t been born with a silver spoon, he wouldn''''t have been qualified to manage a McDonalds.

Posted by jon_mccain at 09:44 AM : Oct 18, 2007
~~~~~~~~~~~~~~~

I agree with jon_mccain.

Another comparison would be; having working class children trying to win a one-mile race when the wealthy upper class children are given a three quarter-mile head start. The poor kid could be three times as intelligent as the rich kid and still lose the race

The sad part, like in jon_mccain%u2019s example, is that the entire country loses.

This has been the case with the human race throughout history.

%u201CNero fiddles while Rome burns%u201D.

Bush plays war games while America collapses from within.
and 99% of the reason why this happens is because "We the people" just can''t admit our mistake let alone effect correction.

[notblue]

"You cannot bring about prosperity by discouraging thrift. You cannot strenghten the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by discouraging the rich.You cannot establish sound securtiy on borrowed money.You cannot keep out of trouble by spending more than you earn. You cannot buildcharacter and courage by taking away man''s intiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.

Abraham Lincoln

[jn122736]

razzl...So you disagree?...You DO think it''''s a level playing field, and everyone is playing by the same rules? You DON''''T think that there''''s a "Hereditary Aristocracy" where children of the rich have a better head start, better educational opportunities, easy funding for their endeavirs, and better connections all around? NOW THAT''''S PATHETIC and NAIVE.
Posted by JJARDEN at 10:43 AM : Oct 18, 2007
~~~~~~~~~~~~~~~

JJARDEN, perhaps you should re-read razzl''s comment.

I believe the people he/she refers to are like those who continually waste large sums of their income on lottery tickets.
They actually are wealthy wannabe%u2019s who really believe they are going to win (become wealthy), and they don%u2019t want to pay a large part of their winnings in taxes.

[walt1944-2009]

The article should be renamed to "The Triumph of ''GUSHING UP'' Economics". Americans used to have 2 dreams to wish for.

1) To be President of the US - nobody wants that job now that Bush has screwed up everything!
2) To work hard and become a millionare. Problem is today you work 24/7 and you have barely enough to buy a gallon of milk! To be a millionare today, you have to be born into it, like George W!

So goes the American dream, straight to CHINA!!!

SIG HEIL, BUSH!!!

[perception5]

"The top one percent of all taxpayers earned 21.2 percent of all the money that individuals in the country earned in 2005. - Liberal Mr. Meyers"

What our corrupt liberal MSM wolfpack press doesn''t tell the American people is that the top 1% of wage earners pay nearly 40% of ALL taxes.

If our liberal MSM wolfpack press was really interested in the "income gap" they would should push their party, the Democrats on doing something about the poverty, dispair, and injustice in America''s "deep blue" one party cities.

Like in Detroit where only 22% of innocent children ever graduate from the Kindergarten thru G12 public school system.

Detroit also leads the nation with the highest crime rate which is DIRECTLY related to the social injustice in their school systems.

The same situation exists in other Deep Blue cities like:

Washington DC
St. Louis
Philadelphia
Cleveland
Baltimore
Atlanta
New Orleans..................on and on and on.

Democrats and corrupt liberal MSM wolfpack press ............WHERE''S THE ACCOUNTABILITY???

No Justice No Peace..............until the Democrats and their wolfpack pals in our big deep blue cities put the blame where it really belongs.

American''s don''t need these liberal lies and excuses anymore.

[jn122736]

"You cannot bring about prosperity by discouraging thrift. You cannot strenghten the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by discouraging the rich.You cannot establish sound securtiy on borrowed money.You cannot keep out of trouble by spending more than you earn. You cannot buildcharacter and courage by taking away man''''s intiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.

Abraham Lincoln
Posted by notblue at 11:22 AM : Oct 18, 2007
~~~~~~~~~~~~~~~~~

In Lincoln%u2019s time ALL Americans had far more equal opportunities.
The problem today is that most of the top 1% (wealthiest) achieved their wealth either through inheritance or by utilizing past laws that prevented monopolies and government interference by corporate lobbyist. Today those anti-monopoly laws, as well as the tax laws instituted after the great depression, have been gutted and/or changed.

You quoted Lincoln: %u201CYou cannot establish sound securtiy on borrowed money.%u201D

Yet the Bush administration (not to mention Reagan) borrowed $trillions and still brags about a great economy, while paying $1/2 trillion in interest on the borrowed money, EVERY YEAR.

[jon_mccain]

"You cannot bring about prosperity by discouraging thrift. You cannot strenghten the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by discouraging the rich.You cannot establish sound securtiy on borrowed money.You cannot keep out of trouble by spending more than you earn. You cannot buildcharacter and courage by taking away man''''s intiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.

Abraham Lincoln

Posted by notblue

ATTRIBUTION: Erroneously attributed to ABRAHAM LINCOLN. Since the 1940s these %u201CTen Points%u201D attributed to Lincoln have been widely reprinted. They have appeared in such places as magazines, Christmas cards, and the Congressional Record. The Library of Congress and Lincoln scholars believe that any connection made between Lincoln and the %u201CTen Points%u201D is spurious.

http://www.bartleby.com/73/1117.html

[gkc99]

This is the "opportunity" that bushit and the Repugs offer--more for the billionaires, and fvck the middle class!

[notblue]

jon-mccain, do you disagree with what lincoln allegedly said or are you just trying to marginalize those words because it doesn''t fit your leftwing entitlement socialistic philosophy?

[jon_mccain]

jon-mccain, do you disagree with what lincoln allegedly said or are you just trying to marginalize those words because it doesn''''t fit your leftwing entitlement socialistic philosophy?

Posted by notblue

I''m saying that when your entire premise is built on error, it isn''t worth the time you took to cut and paste it let alone the time we wasted reading it. However, I would like to find the real author of that piece, I''m betting he has never put in an honest day of back breaking labor in his entire life.

[jackhighland]

Too Bad Mr. Myers, who''s first name can not be displayed, could not find this- He should try GOOGLE.

What a reporter!

Federal Income Tax Burden by Income Group, 2003
Income Group%u2019s Group%u2019s share
Income Number of AGI taxes paid share of of income Average tax
group returns ($ millions) ($ millions) total AGI (%) taxes (%) rate (%)
All taxpayers 128,609,786 6,287,586 747,939 100.00 100.00 11.90
Top 1% 1,286,098 1,054,567 256,340 16.77 34.27 24.31
Top 5% 6,430,489 1,960,676 406,597 31.18 54.36 20.74
Top 10% 12,860,979 2,663,470 492,452 42.36 65.84 18.49
Top 25% 32,152,447 4,078,277 627,380 64.86 83.88 15.38
Top 50% 64,304,893 5,407,851 722,027 86.01 96.54 13.35
Bottom 50% 64,304,893 879,735 25,912 13.99 3.46 2.95
SOURCE: Internal Revenue Service, Individual Income Tax Returns with Positive Adjusted Gross Income (AGI), Tables 5 and 6;
www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html.

[jackhighland]

Top 1% pay 34% of all income taxes

Top 5% pay 54% of all income taxes.

BOTTOM 50% PAY (ONLY)3.46% OF ALL INCOME TAXES.

Trickle that TRICKEYDICK MEYER!

[jackhighland]

Why is this so-called journalist still employed by CBS?

At least CBS should get a stipend for his services from the Democratic National Committee. Or Move-on.Org. Or Putin.

ARE YOU LISTENING CBS SHAREHOLDERS? Its YOUR money CBS is spending on propaganda.

[jackhighland]

TrickIEDICK economics has just scored its greatest success and it is being covered up. I wonder why. Could it be embarrassment?

Yes, CBS tell us about this reporter. A STAR, Right?

Just like Dan WORDPROCESSOR DOCUMENTS Rather.

WHAT HAPPENED to CBS'' ETHICS????

[drivelphobe]

First of all, an income of $365,000 doesn''t come close to qualifying as even close to the super rich category. This is not an uncommon income for many people, in fact it is probably the beginning of middle-class.

The real issue is that people with sufficicent income to live their lives, use the "extra" for investment. Of course as time goes on, they will have incresing growth in wealth. Others, who spend every cent they make, deserve the hopeless financial life they will have. Anyone can improve their lot in life if they save some and invest. It''s no one fault that the wealthy get wealthier, it''s the way it should be. Be thankful the wealthy can be identified so they can pay their share of taxes.

Keep in mind, that while they earn 21.2% of all the earned income, they pay 34% of the taxes and also produce millions of jobs with their spending and investment dollars. God bless them. They pay 1% of their income into the Medicare program.

[samthetvcat]

Top 1% pay 34% of all income taxes

Top 5% pay 54% of all income taxes.

BOTTOM 50% PAY (ONLY)3.46% OF ALL INCOME TAXES.

Trickle that TRICKEYDICK MEYER!

Posted by jackhighland

I haven''t analyzed this thoroughly, but haven''t those percentages always been in place (with the top % of individuals shouldering the burden of a certain high percent of the overall personal income tax take). What gets lost in just reporting those figures for that year is the tax cut Bush implemented for the top 1%. So the figure showing the top % of people paying a greater % of tax is actually a by-product of the greater income disparity.

The figure also doesn''t reflect the tax cuts Bush has given to corporations including farmers - how much have those tax cuts improved your life? This fiscal policy is thought to stimulate growth in the economy because the money usually gets reinvested back into the domestic economy. What''s different with Bush though is that much of the revenue is now being spent overseas (Iraq(!),manufacturing jobs in China, tech stuff in India).

[samthetvcat]

pt 2 (oops I didn''t finish my thought - lol)

Oh so anyway, the conclusion of the paragraph below is that the top 1% are getting richer and paying more taxes because their making more money, but that the trickle down effect seems to be trickling down to China, India, and the drain of Iraq.

* * * * *

pt 3 Also what''s alarming is how much wealth is being made off hedge funds. Hedge funds aren''t like investments in equity or debt necessarily, they''re more like gambles on the market. People put money down based on their gamble that the value for products and services will either go up or down, and when they''re right they make money. They''re getting rich of the inefficiencies of the market, but aren''t directly adding anything in particular of value to society like a good or service, which is kind of troublesome. It''s kind of like how Halliburton can charge a mint and just not build stuff in the sense that people are getting paid big bucks and their work doesn''t really benefit others (except investors). I''m not sure why they should be getting tax breaks.

[jjarden]

drivelphobe..."an income of $365,000...is probably the "beginning" of middle-class."?

REALLY? Please exaplain. In America, a Middle Class income is between $50,000 - $200,000.

[usbrit-2009]

"You cannot bring about prosperity by discouraging thrift.....

Written in 1916 by the Rev. William J. H. Boetcker, a Presbyterian clergyman and pamphlet writer.

[random_radar]

I don''t care how much the rich earn. I just wish the government would let me keep what little I earn. Taxation is theft from the working man!

[creeper00]

"There are three types of lies - lies, *** lies, and statistics." - Variously attributed to Benjamin Disraeli, Alfred Marshall and Mark Twain

I don''t need to look at statistics to know that we are losing ground. I just have to look at my checkbook.

Are YOU better off now than you were six years ago?

[drivelphobe]

jjarden...

I live in the greater Los Angeles area. A $200,000 income, while it sounds good, provides just enough to purchase a home, have a couple of cars and maybe some private health insurance. Costs of a couple of kids, a vacation and emergencies, and you''re out of money. Don''t forget the huge tax bite at this income level. Homes are not under $500,000, and will be considerably more for a livable, middle class neighborhood.

I define the middle class as having sufficient income to pay for all goods and services required to live. That is gardeners, house painters, termiters, maintenance for anything you own, and new cars every 3-4 years. This class should be able to fully fund their retirement, pay for health care coverage and entertain the purchase of a vacation home. They should not be worrying about money at all for necessities.

The middle class should have 3-4 year''s income in liquid savings and a stock portfolio. That is the middle class. What the government wants to promote as middle class, is the largest group of lower income that will believe it. $50,000 per year is insufficient to meet the needs of even a single individual and forces the use of credit. I''ll agree that maybe $200,000 might be the lower end of middle class, but only for those who are prudent, frugal and on pace to improve their lot financially. The $50,000 to $200,000 you cite is just politicians making people feel better.

[geoffgw]

Some of this is law of #''s stuff, all the tinkering in the world won''t change it. What is sad is that Wall St "whiz" kids trading with 0.05% commissions on massive deals, make $1M bonuses while the rest of us do real work to produce their play money. By the way, $365K is middle class?? Sounds you work on Wall St!!

[drivelphobe]

geoffgw....I''m old and retired. I just look back with more clarity than I did when I was working. I used to be in the insurance business, a far cry from Wall Street. Have a nice day.

[quatermass2]

"I define the middle class as having sufficient income to pay for all goods and services required to live. That is gardeners, house painters, termiters, maintenance for anything you own, and new cars every 3-4 years."

Sounds more like a Pharoah to me. Slaves and new chariots, eh? What, you don''t have the time or energy to mow your lousy grass, and you get a new car before the old one is paid off? And that''s "middle" class?

The definition of middle class **has** changed from the "Leave It To Beaver" days. Average home sizes have doubled, everyone "has" to have cable, cell phones, high-speed Internet connections, and try to find a car with manual window controls, no air conditioning and a carburetor. The average Joe Sixpack takes vacations in Cancun, Hawaii, and Europe. I don''t think the whole gestalt is being given air here.

[drivelphobe]

quartermass2...

What does payoff a car refer to? Also, I don''t know anyone who mows their own grass. Everyone has a gardener and most people get new cars more frequently, like every 2 years. Where are you from, the skids?

[geoffgw]

Of course $365k is not middle class, the data show its top 1%. It''s as quartermass says, the pursuit of happiness has us trapped going after all this stuff!

[archangelric]

looked at historically; middle class is the amount of income required to buy the average house in one year up to the amount required to buy an expensive house in one year in the average (i.e. NOT California or New York) market. $50 K is nowhere near middle class.

The issue I have with *** Meyer''s argument is that regardless of what he might think, ALL wealth depends on government actions. Take Inheritance: it takes laws allowing wealth to pass on to descendants rather than be 100% taxed (whether you believe either is correct - it takes laws to provide that action)

The same for income; the argument that wages are kept in place by competition falls apart when you get to upper management who set their own wages. In a 1989 study, japan and european executives wages were 17 times their lowest workers while american executives were making 2014 times their lowest workers AND the lowest workers were making roughly the same in wages and benefits (generally the japanese and europeans had far more benefits, more vacation days, etc.); IN OTHER WORDS while american workers were getting a competitive wage american executives were getting 125 TIMES the competitive wage. Invisible hand of the market be damned!

I think the average tax payer finds it galling that through special tax breaks for "capital gains", etc. he is basically subsidizing the super rich. For Fairness and for the markets to work we need a deductionless, exemptionless, exceptionless graduated income tax.