How the rich got richer
May 23, 2016 10:07 PM Subscribe
Well, I, for one working class schlub, just know a billionaire real estate speculator is going to look out for my interests. When will people ever learn (P.T. Barnum reborn)?
I'll take "crooked" Hillary any day over Lyin' Trump.
posted by WinstonJulia at 2:08 AM on May 24, 2016 [5 favorites]
I'll take "crooked" Hillary any day over Lyin' Trump.
posted by WinstonJulia at 2:08 AM on May 24, 2016 [5 favorites]
Mod note: Quick note: This sort of slid under the radar as an election-related post, which is a problem because of the amount of bad will and anger, and constant moderation they require. If folks want to talk about the stats presented and income inequality generally here, that's fine – but if it's going to be about the US presidential candidates, we'll probably just go ahead and close this and ask OP to post it in the election thread.
posted by taz (staff) at 4:08 AM on May 24, 2016 [3 favorites]
posted by taz (staff) at 4:08 AM on May 24, 2016 [3 favorites]
The surprise to me was how small the drop in tax rates was, especially at the top end, where it looks like a drop from around 35 percent to about 30 percent, with a super low dip under Reagan and a temporary rise under Clinton.
In my head the rise in inequality is all about taxation, but in reality I'm not sure if taxation is the dominant factor or not.
posted by Dip Flash at 4:32 AM on May 24, 2016 [1 favorite]
In my head the rise in inequality is all about taxation, but in reality I'm not sure if taxation is the dominant factor or not.
posted by Dip Flash at 4:32 AM on May 24, 2016 [1 favorite]
Breaking it down by quintiles really doesn't give the inequality justice, since the wealth is really concentrated in the top 1 and .1 percent.
posted by rockindata at 4:36 AM on May 24, 2016 [5 favorites]
posted by rockindata at 4:36 AM on May 24, 2016 [5 favorites]
I thought the presentation of the graphs was distracting and made them harder to read.
posted by Slothrup at 4:51 AM on May 24, 2016 [3 favorites]
posted by Slothrup at 4:51 AM on May 24, 2016 [3 favorites]
Thanks rockindata, that was exactly what I was trying to put my finger on. With distributions that skew heavily in one direction or the other quintiles don't always help me.
Also like a lot of #slvox I find the illustrations more distracting than illustrative. Maybe it's a generational thing? Need to test it on someone who plays a lot of minecraft?
posted by aspersioncast at 5:23 AM on May 24, 2016
Also like a lot of #slvox I find the illustrations more distracting than illustrative. Maybe it's a generational thing? Need to test it on someone who plays a lot of minecraft?
posted by aspersioncast at 5:23 AM on May 24, 2016
The surprise to me was how small the drop in tax rates was, especially at the top end, where it looks like a drop from around 35 percent to about 30
Taxation may not explain it, but it's still a piece of it.
First, a drop from 35 to 30 is 5 percent of taxable income, but it's also 15 percent less revenue to the Govt from rich taxpayers, which has to come from somewhere. The rich being the rich, those savings will go toward investing, where compound interest will work its magic.
posted by notyou at 5:45 AM on May 24, 2016 [2 favorites]
Taxation may not explain it, but it's still a piece of it.
First, a drop from 35 to 30 is 5 percent of taxable income, but it's also 15 percent less revenue to the Govt from rich taxpayers, which has to come from somewhere. The rich being the rich, those savings will go toward investing, where compound interest will work its magic.
posted by notyou at 5:45 AM on May 24, 2016 [2 favorites]
In my head the rise in inequality is all about taxation, but in reality I'm not sure if taxation is the dominant factor or not.
No, it's also about wage stagnation and the massive increase in the gap between executive compensation and what everyone else in companies get paid.
posted by Caduceus at 5:59 AM on May 24, 2016 [3 favorites]
No, it's also about wage stagnation and the massive increase in the gap between executive compensation and what everyone else in companies get paid.
posted by Caduceus at 5:59 AM on May 24, 2016 [3 favorites]
In my head the rise in inequality is all about taxation,
the part of the elephant I'm touching tells me this:
Rents as % of total wages
at the end of the day all economics in our consumer economy is local -- down to the individual level since it is individuals that spend money.
economics does a really poor job of 'following the money' -- tracing the flow of currency from spender to saver. This is by design, as the last thing most economists want is to describe what is actually going on now, the ongoing looting/latifundization of this country.
They don't want to compute that, you'll step on too many toes if you do.
posted by Heywood Mogroot III at 6:10 AM on May 24, 2016 [7 favorites]
the part of the elephant I'm touching tells me this:
Rents as % of total wages
at the end of the day all economics in our consumer economy is local -- down to the individual level since it is individuals that spend money.
economics does a really poor job of 'following the money' -- tracing the flow of currency from spender to saver. This is by design, as the last thing most economists want is to describe what is actually going on now, the ongoing looting/latifundization of this country.
They don't want to compute that, you'll step on too many toes if you do.
posted by Heywood Mogroot III at 6:10 AM on May 24, 2016 [7 favorites]
massive increase in the gap between executive compensation and what everyone else in companies get paid.
A recent study suggests that that gap hasn't increased. What has increased, the authors posit, is the gap in wages between firms.
And here is a critique of the methodology.
posted by jpe at 6:20 AM on May 24, 2016
A recent study suggests that that gap hasn't increased. What has increased, the authors posit, is the gap in wages between firms.
And here is a critique of the methodology.
posted by jpe at 6:20 AM on May 24, 2016
In my head the rise in inequality is all about taxation, but in reality I'm not sure if taxation is the dominant factor or not.
Wealth accumulates with the people who own capital - that's a natural feature of capitalism. You can see that in TFA where it points out that, for the wealthy, the majority of their income comes from investments.
It feels like a rather shallow article and not actually a cartoon as promised. Breaking it down by Congress majority instead of the President is a nice touch though.
posted by Rainbo Vagrant at 7:58 AM on May 24, 2016
Wealth accumulates with the people who own capital - that's a natural feature of capitalism. You can see that in TFA where it points out that, for the wealthy, the majority of their income comes from investments.
It feels like a rather shallow article and not actually a cartoon as promised. Breaking it down by Congress majority instead of the President is a nice touch though.
posted by Rainbo Vagrant at 7:58 AM on May 24, 2016
Sorry about the electoral implication above; not trying to get the Dave Davis or Ford Fender out, cast a line and troll.
But regarding income inequality, stop for a moment and think of the demographics of this unfolding tidal wave of inequality. Both of my parents had union jobs, one with decent retirement and the other with adequate. This allowed them to travel, trailering and for a time to have two modest homes one in the North West then wintering in California. They were able to dine out frequently, help their kids and grand kids, and left some inheritance when they passed, basically what we would regarded as middle class. They earned their Social Security let me tell you. I would also contend that their union job wages with proportional taxes, along with their cohorts in the post war "partnership/bargain" funded the Great Society, the 60's, 70's, 80's infrastructure, and to a lessor degree the US military's power around the world. That post war pact, coupled with the zenith of unions in the 50's, created the one of the most prosperous societies in history
Well, that's going, going gone. The GOP's insistence on the "search and destroy" strategy for union jobs, coupled with their insistence on tax cuts for upper income, capital gains and corporations, paid for by regressive taxes on the middle and lower income, well you can see where this is going. Throw in threats to working people in red states, example targeting teachers, threatening all Americans with Social Security cuts, health care cuts, government shutdowns, add a pinch of free trade, again, targeting union based manufacturing for good measure and see how people in the shrinking middle class ultimately decide to spend their increasingly limited share of the pie. Think this strategy is going to help small business, rural communities? Think this is going to unleash "prosperity?" Think this is going to generate the tax revenue to rebuild the crumbling infrastructure, sail ten aircraft carrier groups around the world and fight a couple of wars for good measure going forward? Is this a plan to build confidence in our economy? Good luck with that.
Oh, and about my parents relative affluence, with all the downward pressures on the middle class today, how many today will be able to help their kids, travel (vacation/leisure industries) leave an inheritance, dine out regularly and buy all the trappings of middle class life? How are people going to spend, why would people spend, when threatened with job loss at every turn? When the boomers retire big step down and heaven help Gen X and the "sharing economy millennials."
But it looks so shiny and cool on TV. This is the insidious reality of income inequality. My 2 cents.
posted by WinstonJulia at 8:08 AM on May 24, 2016 [2 favorites]
But regarding income inequality, stop for a moment and think of the demographics of this unfolding tidal wave of inequality. Both of my parents had union jobs, one with decent retirement and the other with adequate. This allowed them to travel, trailering and for a time to have two modest homes one in the North West then wintering in California. They were able to dine out frequently, help their kids and grand kids, and left some inheritance when they passed, basically what we would regarded as middle class. They earned their Social Security let me tell you. I would also contend that their union job wages with proportional taxes, along with their cohorts in the post war "partnership/bargain" funded the Great Society, the 60's, 70's, 80's infrastructure, and to a lessor degree the US military's power around the world. That post war pact, coupled with the zenith of unions in the 50's, created the one of the most prosperous societies in history
Well, that's going, going gone. The GOP's insistence on the "search and destroy" strategy for union jobs, coupled with their insistence on tax cuts for upper income, capital gains and corporations, paid for by regressive taxes on the middle and lower income, well you can see where this is going. Throw in threats to working people in red states, example targeting teachers, threatening all Americans with Social Security cuts, health care cuts, government shutdowns, add a pinch of free trade, again, targeting union based manufacturing for good measure and see how people in the shrinking middle class ultimately decide to spend their increasingly limited share of the pie. Think this strategy is going to help small business, rural communities? Think this is going to unleash "prosperity?" Think this is going to generate the tax revenue to rebuild the crumbling infrastructure, sail ten aircraft carrier groups around the world and fight a couple of wars for good measure going forward? Is this a plan to build confidence in our economy? Good luck with that.
Oh, and about my parents relative affluence, with all the downward pressures on the middle class today, how many today will be able to help their kids, travel (vacation/leisure industries) leave an inheritance, dine out regularly and buy all the trappings of middle class life? How are people going to spend, why would people spend, when threatened with job loss at every turn? When the boomers retire big step down and heaven help Gen X and the "sharing economy millennials."
But it looks so shiny and cool on TV. This is the insidious reality of income inequality. My 2 cents.
posted by WinstonJulia at 8:08 AM on May 24, 2016 [2 favorites]
In my head the rise in inequality is all about taxation, but in reality I'm not sure if taxation is the dominant factor or not.
Well, one thing this article doesn't demonstrate very well (IMO) is that the tax rate for things like long-term capital gains (or other "money making money" forms of income) has changed much more than 5%.
Here's a graph from Paul Krugman (via the Tax Policy Center) showing that the maximum rate for long-term capital gains dropped from 30% down to 15% from '96 to '08. And that sort of tax savings 1) is something most Americans will never see and 2) tends to apply to people who already have millions, so a change of even a few percent is worth millions.
So, certain kinds of taxation are a major factor, if maybe not the dominant one.
posted by soundguy99 at 8:09 AM on May 24, 2016 [7 favorites]
Well, one thing this article doesn't demonstrate very well (IMO) is that the tax rate for things like long-term capital gains (or other "money making money" forms of income) has changed much more than 5%.
Here's a graph from Paul Krugman (via the Tax Policy Center) showing that the maximum rate for long-term capital gains dropped from 30% down to 15% from '96 to '08. And that sort of tax savings 1) is something most Americans will never see and 2) tends to apply to people who already have millions, so a change of even a few percent is worth millions.
So, certain kinds of taxation are a major factor, if maybe not the dominant one.
posted by soundguy99 at 8:09 AM on May 24, 2016 [7 favorites]
Citation needed, I think this was a FPP, but I've read that anti-trust laws were slowly ignored, weakened and changed around the '70s. Which might play into this too.
posted by Rainbo Vagrant at 8:12 AM on May 24, 2016
posted by Rainbo Vagrant at 8:12 AM on May 24, 2016
This is a pretty famous video from a few years ago that shows the crazy skew of the inequality that is simply not visible with the quintiles.
posted by rockindata at 9:27 AM on May 24, 2016
posted by rockindata at 9:27 AM on May 24, 2016
the thing that seems to be missing from all these discussions of wealth inequality is other forms of inequality.
if we believe the world is fractal/self similar than addressing inequality of money means you would have to address other forms of inequality.
physical and digital auditoriums, and mass production are major forms of inequality. small groups of people(musicians or athletes or politicians) stand on platforms(physical platforms or digital platforms) and are viewed by the masses. or single factories product copies of goods for millions of consumers.
the web and most other modern technologies are not leveling at all. they are greater unequalizers(or better word please!). a billion view youtube movie is also a form of the 0.00001%. all this talk about business models or innovations being "scalable" is really talk about how much inequality they are capable of generating. and we continue to celebrate these innovations while railing on $ inequality. a strange conundrum. or maybe just massive confusion.
electing a single person for 320M people is the 0.0000003%
the modern world is a pyramid scheme and as the base of people viewing the same pyramid gets larger, then we have more inequality. global connectedness inherently leads to more inequality. at least i haven't seen any better arguments to the contrary...
posted by danjo at 6:01 PM on May 24, 2016
if we believe the world is fractal/self similar than addressing inequality of money means you would have to address other forms of inequality.
physical and digital auditoriums, and mass production are major forms of inequality. small groups of people(musicians or athletes or politicians) stand on platforms(physical platforms or digital platforms) and are viewed by the masses. or single factories product copies of goods for millions of consumers.
the web and most other modern technologies are not leveling at all. they are greater unequalizers(or better word please!). a billion view youtube movie is also a form of the 0.00001%. all this talk about business models or innovations being "scalable" is really talk about how much inequality they are capable of generating. and we continue to celebrate these innovations while railing on $ inequality. a strange conundrum. or maybe just massive confusion.
electing a single person for 320M people is the 0.0000003%
the modern world is a pyramid scheme and as the base of people viewing the same pyramid gets larger, then we have more inequality. global connectedness inherently leads to more inequality. at least i haven't seen any better arguments to the contrary...
posted by danjo at 6:01 PM on May 24, 2016
^
'But "glory" doesn't mean "a nice knock-down argument",' Alice objected.
'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'
'The question is,' said Alice, 'whether you can make words mean so many different things.'
posted by aspersioncast at 12:16 PM on May 25, 2016
'But "glory" doesn't mean "a nice knock-down argument",' Alice objected.
'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'
'The question is,' said Alice, 'whether you can make words mean so many different things.'
posted by aspersioncast at 12:16 PM on May 25, 2016
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Even when both sides agree they're getting screwed, they still can't agree on how to stop it, which is why the screwing continues.
posted by Beholder at 12:35 AM on May 24, 2016 [1 favorite]