U.S. – Top 1% Owns More than Bottom 90%

SourceThe Blue Street Journal  on Facebook

When I saw this graphic in my Facebook News Feed, I immediately recalled the days (early 1980’s) when we thought how unjust and oppressive it was that 14 families owned 90% of the land in El Salvador, and we said no wonder the people revolted. Now the U.S. is the same, but where is the revolt?

A Facebook Friend commented “The problem is that the 90% are easily distracted by lotteries, Faux News, terrorist attacks, wars, immigration, right to life issues and gay rights. They get sucked into voting for special issues. The 1% NEVER get distracted by those things. For them, every issue is only about how it affects their pocketbooks. The issues are adopted by Republicans because they draw votes; not because the 1% care or are even affected by them.”

Income Gap: Dramatic Increase 1967-2010

The chart below vividly illustrates how the gap between the wealthy and the middle class has steadily grown since 1967.  Note the chart is in current dollars (1957 income reported in 1967 dollars and 2010 income reported in 2010 dollars).  And we all know that a dollar today won’t buy nearly as much as a dollar would in 1967, so the next chart reports in constant dollars.

Household-Inc-Current-Dollars

The chart below shows the mean (average) household income with all years reported in the equivalent of 2010 dollars.  This chart makes clear that the vast majority of Americans have hardly improved their economic status since 1967.  U.S. economic policies have NOT raised all boats – only the boats of the top 20% and the super rich (top 1%).  This helps us understand why the rising stock market is not an accurate indicator of the economic well-being of the majority.  Gains in productivity and profits have gone to the top earners (& dividend receivers), they have not been equitably distributed to the workers who actually produce more per hour.

Household-Inc-InflationAdj

Source:  Doug Short,  “U.S. Household Incomes: A 44-Year Perspective,:  dshort.com, Sept. 18, 2012.  Online at http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php

Growing Gap between Rich and Everyone Else

According to a recent Pew Research Center study, between the years of 2009 and 2011:

  • Average Net Worth per Household of richest 7% INCREASED by 28%
  • Average Net Worth per Household of other 93% DECREASED by 4%

PEW-HouseholdWealth-ChangedTitle

  • There are 8 million households in the upper 7% and their mean net worth in 2011 was $3,173,895
  • Of the 111 million households in the other 93%, mean net worth in 2011 was $113,817

The richest 7% of households owned 63% of all household wealth in 2011.

The income gap is also increasing

The top 20% of earners received half of all household income.

Between 1979 and 2007

Incomes for the richest 1% increased by a whopping 275%, while

Incomes for middle 60% of Americans increased only 40%.

Sources:

For Household Net Worth Data: Richard Fry and Paul Taylor  “A Rise in Wealth for the Wealthy; Declines for the Lower 93%,” Pew Research Center.

For Income Data: Pauline Jelinek, Associated Press, in “Pew: 93% of households lost net worth 2009-11,” USA Today, April 23, 2013.

GOP Principles = Decrimininalizing Drugs?

Conservative blogger Kavon Nikrad argues that decriminalizing drugs is a sound application of  GOP principles of small government and, furthermore, would help the GOP increase it share of young voters and black voters.

Conservatives used to argue that the federal government cannot fix cultural problems through social-engineering legislation. That argument was right, and the results of the Drug War are living proof of it. It is time for the Republican Party to take the lead in ending this failed policy. It’s good for families, it saves money, and it will engender a new perspective on the humanity of drug users.

Nikrad points out that heavy emphasis on drug arrests since the time of Nixon have not reduced drug use, although costing billions of dollars.  He cites the case of Portugal to show that decriminalizing drugs and treating addiction as a public health issue is much more successful.

Slightly over a decade ago, Portugal decriminalized all drugs, choosing instead to treat the matter as a public health concern. The result has been a staggering 50% decrease in estimated number of addicts, as well declining rates of overall drug use and drug-related diseases.

It is heartening to see a conservative concerned about racial discrimination resulting from government action.  Nikrad notes that “Despite comprising only 12% of the population, 62% of those who are sent to state prisons for drug offenses are black. Black men are sent to prison for drug offenses at 13 times the rate of white men.”

He urges the GOP to advocate for decriminalization.  “This is Big Government at its worst and most discriminatory. Where are Big Government’s supposed opponents when racial minorities need them? Republicans should stand up for the black community and call for an end to the failed Drug War.”

Sources:

Kavon Nikrad, “Opposing the war on drugs: Good policy, good politics,” Star Tribune, April 18, 2013, P. A13. Reprinted in Kavon Nikrad’s blog of 4/17/13 under title “It’s Time for Republicans to End the Failed, Immoral Drug War.”  Online at http://kavonnikrad.blogspot.com/2013/04/its-time-for-republicans-to-end-failed.html.

Why No Free e-filing via IRS?

Why do I have to spend $50 or more for software to complete my tax returns and e-file them?  In other countries (Denmark, Sweden, Spain), people can just go to the gov’t tax web site and open up a prefilled out tax form  (tax agency has filled out based on W-2s, dividend reporting forms, etc.).  Taxpayers make any necessary changes online and press a button to e-file.  Simple, quick, and free.

When such schemes have been proposed in Congress, TurboTax and other tax software companies have successfully lobbied against these bills.

It’s true that the IRS provides a list of free online e-filing services, but these are very limited.  Tax software companies will provide free online forms and e-filing if you only need Form 1040EZ and/or your income is less than $50,000 and/or you are under 55, etc.  Why do the rest of us have to pay in order to carry out our legal duty to pay taxes?

Sources:

Why do men drop out of college more than women?

According to a recent study in Gender and Society (as reported in the Girl w/ Pen blog), men are less likely to tolerate high college loan debt and hence are more prone to dropping out of college than women are.  Men college drop-outs can earn a lot more money than women drop-outs, so men’s behavior makes good short term economic sense (although by midlife men college grads earn $20,000 more per year than drop-outs).

According to the Bureau of Labor Statistics’ most recent data on median weekly earning for full-time workers 25 or older, women college drop-outs earn 25% less than their male counterparts.  In fact, women need a Bachelor’s degree in order to earn as much as men college drop-outs (to be precise, women with a Bachelor’s degree earn 11% more than men college drop outs).

 Median Weekly Earnings: First Quarter 2013 (Bureau of Labor Statistics)

Full time workers 25 years and older

Men

Women

Women’s Wages as

Per cent of Men’s Wages

HS grad, no college

$   732

$574

78%

Some college or

associate degree

$   866

$652

75%

Bachelor’s degree only

$1,242

$958

77%

Sources:

Corporations pay few taxes, but benefit mightily from gov’t

“America isn’t broke, but it is being ripped off,” writes The Other 98% on Facebook when posting this infographic.  Seems like the 10% that corporations contribute to government revenues is way out of proportion to the benefits they receive (roads, educated workers, police, etc.,  and especially protection of the courts).

To read more and find the sources for the stats in the infographic, see “American Taxpayers Increasingly Picking Up the Tab for Unpaid Corporate Taxes, ” April 4, 2013 at http://thecontributor.com/economy/american-taxpayers-increasingly-picking-tab-unpaid-corporate-taxes.