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Continuing the “Income Inequality” Discussion…
By JLP | December 13, 2011
In light of yesterday’s post, I thought I’d share this piece from the New York Times: Top Earners Not So Lofty in the Days of Recession.
I noticed some inconsistencies with the numbers in yesterday’s post. From the NYT’s piece (bold mine):
The share of income received by the top 1 percent — that potent symbol of inequality — dropped to 17 percent in 2009 from 23 percent in 2007, according to federal tax data. Within the group, average income fell to $957,000 in 2009 from $1.4 million in 2007.
Contrast that with what the CBO report supposedly says (quote taken from the Alan Reynolds’ piece):
“The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007.”
Interesting…
The report that Alan Reynolds referenced was recently published by the CBO and only went through 2007. Not sure where the NY Times got their numbers and I’m also not sure why they are so different from the CBO’s.
Topics: Economics | 9 Comments »
December 13th, 2011 at 12:02 pm
Lies, Damn Lies, and Statistics.
December 13th, 2011 at 1:07 pm
The CBO report on the other article you linked, clearly shows 17% “After-tax income (after transfers and federal taxes)” for the top 1% in 2007 (Box 2, page 24/63 in the pdf).
I guess the NYT is using a different source that may be “before-tax” or before transfers, etc…
December 13th, 2011 at 1:07 pm
You didn’t bold “over”. 23 percent is still over 17 percent.
December 13th, 2011 at 1:17 pm
The sad part is seeing how bad the ‘inequality’ is. Looking at that box I referenced in #2:
The bottom 20% had 4% of the income,
The bottom 40% had 13% of the income,
The bottom 60% had 27% of the income,
etc…
And I bet the statistics are only based on households that even filed taxes. I’m sure there are some ultra-poor households not counted that don’t even file (so aren’t counted).
December 13th, 2011 at 1:26 pm
It’s interesting that the NY Times doesn’t offer up their source of their information.
December 13th, 2011 at 1:30 pm
BG,
I’m of the opinion, that as long as we are a consumption-based economy, the supposed inequality will never change. We spend everything we make, which goes to those who produce. Until we start saving and investing, we’ll never turn the tide.
December 14th, 2011 at 11:41 am
What other kind of economy is there?
December 21st, 2011 at 10:42 pm
The “supposed inequality”? You don’t think there is an income and wealth inquality in the US? This started back with Reagan and his trickle down economics. Since then, the middle and lower class has been losing income and wealth and the upper class has been gaining. Another is the massive tax
cuts given to the upper income people by Reagan and Bush, especially on unearned income.
December 22nd, 2011 at 12:01 am
John,
We’re always going to have inequality. It’s the way the world works. We could help ourselves if we could get people to quit spending everything they make. It’s hard to build wealth when you spend everything you make (and then some).
So your solution is to take from the successful and redistribute to the losers, making them EVEN MORE DEPENDENT on government?
Again with the “massive tax cuts”?