[NEronchik]

Here is a snapshot of the new CBO Study on Income increase between 1979 and 2007:

Congressional Budget Office - Trends in the Distribution of Household Income Between 1979 and 2007

The top 1% increased 275%
The bottom 20% increased 18%.

Let's call a spade a spade-the report is clear that government tax and other policies helped redistribute wealth from the bottom to the top.

There is a redistribution of wealth alright-from the bottom to the top. This stands "trickle down" economics on its head.

[Peapeuddedbaw]

Here is a snapshot of the new CBO Study on Income increase between 1979 and 2007:

Congressional Budget Office - Trends in the Distribution of Household Income Between 1979 and 2007

The top 1% increased 275%
The bottom 20% increased 18%.

Let's call a spade a spade-the report is clear that government tax and other policies helped redistribute wealth from the bottom to the top.

There is a redistribution of wealth alright-from the bottom to the top. This stands "trickle down" economics on its head.

These reports are remarkably dumb, but are great fodder for those who what to make arguments about worsening income inequality. Just by methodological design, there is no way under most any policy to yield a different result.

A dose of common sense and skepticism is needed here.

[Taunteefrurge]

It would be interesting if they did this in decade increments going back to 1900.

[Fededorbprago]

The CBO sounds like a bunch of lazy Marxist whiners who want free handouts and hate our fine country.

[22paseabelldaps]

These reports are remarkably dumb, but are great fodder for those who what to make arguments about worsening income inequality. Just by methodological design, there is no way under most any policy to yield a different result.

A dose of common sense and skepticism is needed here.

Dude, what you said doesn't mean anything.

What methodology would you use to get an "accurate" result?

What "common sense" is missing?

Will you or will you not admit that the wealthiest Americans are getting richer why the rest of us are seeing our wages stagnate or even decline when adjusted for inflation?

How can anyone spin this?

[Deseassaugs]

These reports are remarkably dumb, but are great fodder for those who what to make arguments about worsening income inequality. Just by methodological design, there is no way under most any policy to yield a different result.

A dose of common sense and skepticism is needed here.

Why don't you enlighten us on how the CBO has "spun" this issue?

Why don't you tell us how an 18% increase in income over 28 years for the bottom 20% is something to cheer about?

[gZAhTyWY]

(After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.) I would also be interested in the numbers if they didn't include people on government payments. I think almost 20% of the population is on social security. That could create a significant affect on the numbers. I'm not saying it will jump it up to 200% growth or anything, but a more accurate comparison about economic growth parities would probably be done by not including social services payments.

[Haibundadam]

Why don't you enlighten us on how the CBO has "spun" this issue?

Why don't you tell us how an 18% increase in income over 28 years for the bottom 20% is something to cheer about?

They didn't spin anything... it's just a illogical methodology.

1 - the people in the top 1% and bottom 20% aren't locked in are they? Meaning that you're not comparing the same people over time. Example: What's Mark Zuckerberg worth today? About $15B right? So he's in the top 1% now. What was he worth in 1990; comparitively little right? (granted he was 6 years old). So now he's counted in the top 1% with massive wealth, but it's not recognized that he came from the middle of the pack, so to speak. The same is true in reverse, someone who was worth 200K in 1990, but gambled it away on risky investment may be pennyless today and is counted in the bottom 20%, despite the fact that they once had wealth.

2 - let's assume that someone in the bottom 20% had income increase 5000% in 28 years... is that good? I'd say it is, BUT that person would no longer be counted in the bottom 20% would they? They'd have been replaced with the guy from above who lost his money and has a zero net worth.

That's the illogical methodology. You're not comparing a specific set of people to one another, you're comparing people who have been successful to people who have not, which is why the result is pre-determined.

[fudelholf]

Let's call a spade a spade-the report is clear that government tax and other policies helped redistribute wealth from the bottom to the top.

There is a redistribution of wealth alright-from the bottom to the top. This stands "trickle down" economics on its head.

I would honestly reply with a "maybe". The issue is identifying what has caused wealth to move to the top and seem to stay there. The problem is there are a lot of variables and policy that have taken place over the last 50 years. Could it be the change in the tax structures? Could it be increased regulatory of opening/running a business? Etc.

[VemyhemiHef]

They didn't spin anything... it's just a illogical methodology.

1 - the people in the top 1% and bottom 20% aren't locked in are they? Meaning that you're not comparing the same people over time. Example: What's Mark Zuckerberg worth today? About $15B right? So he's in the top 1% now. What was he worth in 1990; comparitively little right? (granted he was 6 years old). So now he's counted in the top 1% with massive wealth, but it's not recognized that he came from the middle of the pack, so to speak. The same is true in reverse, someone who was worth 200K in 1990, but gambled it away on risky investment may be pennyless today and is counted in the bottom 20%, despite the fact that they once had wealth.

2 - let's assume that someone in the bottom 20% had income increase 5000% in 28 years... is that good? I'd say it is, BUT that person would no longer be counted in the bottom 20% would they? They'd have been replaced with the guy from above who lost his money and has a zero net worth.

That's the illogical methodology. You're not comparing a specific set of people to one another, you're comparing people who have been successful to people who have not, which is why the result is pre-determined.

Actually that really doesn't hold true. It is a percentage of the population and a moving target. Sure, Zuckerburg moved from the 99% to the 1%, but is is proportional.

[Buildityrit]

That's the illogical methodology. You're not comparing a specific set of people to one another, you're comparing people who have been successful to people who have not, which is why the result is pre-determined.

This is an idiotic statement. And a bunch of old rich people died and are no longer in the top 1%. They were replaced by the Mark Zuckerbergs of the world. A proportional assessment is a proportional assessment. And I assure you Mark Zuckerberg's parents were nowhere near the bottom 20%. This isn't a rags to riches story, as most Republicans would like us to believe (not in Zuckerbergs case). Oh yeah, work hard, and you TOO will be a multi-millionaire. Bull****. Mark Zuckerberg was rich all of his life, comparatively speaking. He probably is the product of 2 educated parents, private or top-notch public schools, and Harvard. It doesn't hurt that he stole a few people's ideas along the way.

Good for him. But mobility in this country isn't what it once was, despite your beliefs.

[Grizli]

I would also be interested in the numbers if they didn't include people on government payments. I think almost 20% of the population is on social security. That could create a significant affect on the numbers. I'm not saying it will jump it up to 200% growth or anything, but a more accurate comparison about economic growth parities would probably be done by not including social services payments.

See the section "Effect of Government Transfer Payments.." on PDF page 35. See also any figures/passages that talk about "market income".

"Overall, transfers and federal taxes reduce income inequality."

"The redistributive effect of transfers and federal taxes was smaller in 2007 than in 1979." (attributed mainly to no means-testing for Medicare and cuts to TANF/AFDC)

It's a bit under 20% that get some form of OASDI.

[Alexeric]

Actually that really doesn't hold true. It is a percentage of the population and a moving target. Sure, Zuckerburg moved from the 99% to the 1%, but is is proportional.

Not sure I follow your objection. Of course it's proportional, but that's irrelevant. It's the moving target that accentuates the disparity in income. Zuckerberg, Jobs, Winfrey, etc weren't in the 1% when they started, but each of them displaced someone making less than 500K, and in doing so show that the wealth of the richest increased by a huge number, which may not be even true.

[bomondus]

This is an idiotic statement. And a bunch of old rich people died and are no longer in the top 1%. They were replaced by the Mark Zuckerbergs of the world. A proportional assessment is a proportional assessment. And I assure you Mark Zuckerberg's parents were nowhere near the bottom 20%. This isn't a rags to riches story, as most Republicans would like us to believe (not in Zuckerbergs case). Oh yeah, work hard, and you TOO will be a multi-millionaire. Bull****. Mark Zuckerberg was rich all of his life, comparatively speaking. He probably is the product of 2 educated parents, private or top-notch public schools, and Harvard. It doesn't hurt that he stole a few people's ideas along the way.

Good for him. But mobility in this country isn't what it once was, despite your beliefs.

I didn't say that Zuckerberg was in the bottom 20%. But ok... replace Zuckerberg with, Oprah Winfrey... she was...

[BronUVT]

Not sure I follow your objection. Of course it's proportional, but that's irrelevant. It's the moving target that accentuates the disparity in income. Zuckerberg, Jobs, Winfrey, etc weren't in the 1% when they started, but each of them displaced someone making less than 500K, and in doing so show that the wealth of the richest increased by a huge number, which may not be even true.

Your point is irrelevant. Some people got out of the lower brackets, some people got out of the higher brackets. So? How does that disprove the findings?

We are talking about the expansion of income in the United States' economy from 1979 to 2007. The richest of us grew at an exponential rate compared with the poorest of us. An 18% increase for the bottom 20% over 28 years doesn't even keep up with inflation.

Your point about upward and downward mobility does not effect in any way the findings of the study-which clearly shows that income increases in the lowe brackets has not even kept pace with inflations.

It also shows what a bunch of horse manure "trickle down" theory is.

[daguy]

Your point is irrelevant. Some people got out of the lower brackets, some people got out of the higher brackets. So? How does that disprove the findings?

We are talking about the expansion of income in the United States' economy from 1979 to 2007. The richest of us grew at an exponential rate compared with the poorest of us. An 18% increase for the bottom 20% over 28 years doesn't even keep up with inflation.

Your point about upward and downward mobility does not effect in any way the findings of the study-which clearly shows that income increases in the lowe brackets has not even kept pace with inflations.

It also shows what a bunch of horse manure "trickle down" theory is.

It doesn't negate the raw findings but it completely makes the interpretation that we have to do something about it worthless. Read the following by Thomas Sowell who researched the issue and wrote about it in 2007: That “Top One Percent” - Thomas Sowell - National Review Online

People make a lot of money and then they don't. People make very little money and then they don't.

[Sotmoigma]

It doesn't negate the raw findings but it completely makes the interpretation that we have to do something about it worthless. Read the following by Thomas Sowell who researched the issue and wrote about it in 2007: That “Top One Percent” - Thomas Sowell - National Review Online

People make a lot of money and then they don't. People make very little money and then they don't.

Not seeing how it's relevant. The trend is that income of people who make "a lot of money" (defined as the top 1% in this case) has grown much faster than people who don't (defined as the bottom 20% here). It doesn't matter that people move between the groups.

ETA: OK I suppose is relevant in one sense.. in that the headline of this thread is can be considered misleading. But that's more of a quibble to me. It would be nice if Sowell had cited his source instead of just a vague 'recent IRS data'. He looked at the 1% and saw that half of them were not there 10 years later. For the top 0.01% 3/4s of them were not there five years later.. but what if you expand it the other way? Say, look at the top 2% or 5%? I'd bet the 'churn' rate goes down a lot.

[retrahdggd]

Your point is irrelevant. Some people got out of the lower brackets, some people got out of the higher brackets. So? How does that disprove the findings?

We are talking about the expansion of income in the United States' economy from 1979 to 2007. The richest of us grew at an exponential rate compared with the poorest of us. An 18% increase for the bottom 20% over 28 years doesn't even keep up with inflation.

Your point about upward and downward mobility does not effect in any way the findings of the study-which clearly shows that income increases in the lowe brackets has not even kept pace with inflations.

It also shows what a bunch of horse manure "trickle down" theory is.

Bul - you clearly thrive on this stuff because it validates your belief in systemic unfairness, and as such you have no skepticism about the derived insights. I'll accept that the data is correct, but the findings are ridiculous.

Suppose you have 100 people in a sample and you sort them into deciles by income. Let's suppose that total income for those in the top decile is $10 Million while total income for the bottom decile is $10K. Ten years later, two people from the bottom are now millionaires. The rate of income growth for those originally in the bottom 10% is more than 20000% (this is all just straight math), right?

But that's not how this pre/post analysis works. In this analysis, they're left in the "pre" because they didn't make much, but taken out of the "post" because they did. Therefore, the bottom 10% had virtually no income increase. This would be the finding but it would be TOTALLY UNTRUE!!!

Why not show the change in income by education or by profession? It would be far more meaningful to show that an investment banker's income increased 200% while a bus driver's income went up only 60% and a housekeepers income just 10%. Plus it would be more actionable through minimum wage increases or some other fair labor practice law.

BTW - I'll also note that the income disparity grew most under Reagan and Clinton and least under Bush 41 and Bush 43. (think recession)...

[Glipseagrilia]

Not seeing how it's relevant. The trend is that income of people who make "a lot of money" (defined as the top 1% in this case) has grown much faster than people who don't (defined as the bottom 20% here). It doesn't matter that people move between the groups.

ETA: OK I suppose is relevant in one sense.. in that the headline of this thread is can be considered misleading. But that's more of a quibble to me. It would be nice if Sowell had cited his source instead of just a vague 'recent IRS data'. He looked at the 1% and saw that half of them were not there 10 years later. For the top 0.01% 3/4s of them were not there five years later.. but what if you expand it the other way? Say, look at the top 2% or 5%? I'd bet the 'churn' rate goes down a lot.

The reason it matters is that the argument assumes that the rich are getting richer. But that only has import if the rich are the same set of people. I.e., there's this set of people and they are doing better and better than this other set of people. But that analysis doesn't make sense if people are bouncing between the two groups. Actually, there's more than two groups.

Honestly, "doing well" in this country isn't hard. I'm not saying rich, but I am saying doing OK by yourself.

1) Finish high school at the very least.
2) Don't do drugs, especially hard drugs.
3) Stay out of jail.
4) Spend less than you make. Live below your means.
5) Show up on time and do what your boss tells you.

Except for really hard cases which deserve a social safety net, charity, etc., you live by these guidelines and you'll be fine economically.

[DoterrFor]

The reason it matters is that the argument assumes that the rich are getting richer. But that only has import if the rich are the same set of people. I.e., there's this set of people and they are doing better and better than this other set of people. But that analysis doesn't make sense if people are bouncing between the two groups. Actually, there's more than two groups.

This is exactly right...