The Rich are Getting Richer
Posted by John Irons at June 26, 2003 12:30 PM
Data from the IRS shows that the average income of the 400 wealthiest US taxpayers was $173.9 million in 2000. On average they paid 22.4% of their income in taxes.
With recent tax changes, their average tax burden is likely to be even smaller.
According to the Times, "[h]ad President Bush's latest tax cuts been in effect in 2000, the average tax bill for the top 400 would have been about $30.4 million — a savings of $8.3 million, or more than a fifth, according to an analysis of the I.R.S. data by The New York Times. That would have resulted in an average tax rate of 17.5 percent."
Can I be rich too? Please?
Click for:
Data on the top 400
Data on the returns with income over $200,000
Very Richest's Share of Income Grew Even Bigger, Data Show
The 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period.
The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.
While the sharp growth in incomes over that period coincided with the stock market bubble, other factors appear to account for much of the increase. A cut in capital gains tax rates in 1997 to 20 percent from 28 percent encouraged long-term holders of assets, like privately owned businesses, to sell them, and big increases in executive compensation thrust corporate chiefs into the ranks of the nation's aristocracy.
This year's tax cut reduced the capital gains rate further, to 15 percent.
Posted by John Irons at June 26, 2003 12:30 PM
Don't you realize the tired politics of envy and class warfare are no longer relevant? You want the federal government controlling social security like its some sort of federal program. Its your money. You paid for it.
The well-off are the engine of growth - if you give millionare tax cuts, they OBVIOUSLY will run out and start new business that employ inner city single mothers at jobs with good benefits, living wage, and child care. What do you think they will do, go put a down payment on a Ferrari Modena or invest it in an offshore hedge fund that is up 200% this year because its been shorting the dollar? Sheesh. You liberals will just never learn.
Isn't this just a case of the bubble causing capital gains receipts to explode? I don't think it's a great stretch to say that stocks got way overvalued and people were willing to pay ridiculous amounts for companies that weren't ever going to produce enough income to justify the price.
Is Mark Cuban an example of the Rich getting Richer or is he an example of the middle class getting really rich? Note it's rarely the same people twice.
Granted, people were probable stupid to buy these peoples companies for the price they did, but whose fault is that?
"Granted, people were probable stupid to buy these peoples companies for the price they did, but whose fault is that?"
How about the corrupt Wall Street analysts?
Quote
America in the 1920's wasn't a feudal society. But it was a nation in which vast privilege -- often inherited privilege -- stood in contrast to vast misery. It was also a nation in which the government, more often than not, served the interests of the privileged and ignored the aspirations of ordinary people.
Those days are past -- or are they? Income inequality in America has now returned to the levels of the 1920's.
Unquote
This was Paul Krugman writing in the New York Times Magazine, 20 October, 2002. Before you rubbish this as just being Krugman at it again, try reading the whole article, at http://www.pkarchive.org/economy/ForRicher.html.
As a sidelight on inequality, the World Health Organization annual world health report for 2000 assessed performance of the health systems in 191 countries and (quoting from the press release for the report, http://www.who.int/whr2001/2001/archives/2000/en/press_release.htm) "The U.S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance, the report finds. The United Kingdom, which spends just six percent of GDP on health services, ranks 18th." This puts the US behind such economic power houses as France, Italy, Spain, Japan and (wait for it!) Columbia, Chile, Costa Rica, Morocco and Saudi Arabia... and only two places ahead of Cuba.
Of course the standard of health care for affluent Americans is pretty good, and for the seriously rich, it's probably the best in the world.
The Republicans are the party of class civil war - soak up the money to the top, and get everyone else to fight over the scraps.
I'm surprised that no one has done the analysis that shows the disparty within quintiles - as opposed to just between them - is also growing.
Good fodder for a post over on oikonomikos
The theory that "the rich will run off and start a new business" is pure nonsense. Afterall, given a choice between starting a business, and using wealth to get another tax cut voted, tax cuts have an ROI of 1000% per year. There aren't many businesses not involving cocaine or the sex trade that have those kinds of returns on capital.
The way to encourage enterpeneurs to create businesses is to generate demand. Generating demand means increasing the buying power of most people, so there is an incentive to sell to them.
Why sell to the poor who are getting poorer?