Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

US Super-rich Get Five Times More Income Than in 1995

Politics / Social Issues Feb 23, 2010 - 03:16 AM GMT

By: Global_Research

Politics

Best Financial Markets Analysis ArticleAndre Damon writes: The incomes of the very rich in the US grew phenomenally between 1992 and 2007, while their tax rates plummeted, according to recently uncovered IRS statistics.



The figures were published on the IRS web site in December of 2009, but received little notice because they were not announced. The report only became widely known when Tax Analysts, a news outlet for tax information, discovered the document and wrote about it on its web site, tax.com, on Thursday.

The report shows that the average income for the top-earning 400 families, denominated in 1990 dollars, grew from $17 million to $87 million, representing a five-fold increase in real terms. During this time, the percentage of the total national income that went to the top 400 families tripled, from .52 percent in 1992 to 1.59 in 2007.

The data shows that these families saw their incomes increase by 31 percent between 2006 and 2007 alone, while the average income of each family reached $345 million.

The amount of money earned by the group more than doubled from 2001, when its members earned on average $131.1 million. In 1993, the top 400 tax return filings amounted on average to $46 million. This means that there was an eight-fold nominal increase in the average earnings for this group between 1993 and 2007.

Meanwhile, the effective tax rate on this group—the amount actually paid in taxes—fell to 16.6 percent, the lowest figure on IRS records dating to 1992.


Congressional Democrats have sought to place blame for falling taxes on the wealthy solely on the Bush administration’s tax cuts. But the IRS figures show that the effective tax rate on the top 400 income earners actually fell faster under the last part of the Clinton administration than at any later time.

The effective tax rate hit a high point of nearly 29 percent in 1995. By the end of the Clinton administration, the rate had fallen to 22 percent. The trend continued under Bush, with the effective tax rate falling another 6 percentage points between 2001 and 2007.

The Bush administration lowered the capital gains tax by 5 percentage points, to 15 percent, in 2003. But Bush’s policies were only a continuation of laws passed under the Clinton administration, when the capital gains tax was lowered from 28 percent to 20 percent for the top income brackets.


The top income earners received a total income of $138 billion in 2007. This figure is larger than the yearly output of most of the world’s countries, and is nearly as large as the GDP of Chile. Out of this amount, the group paid only $23 billion in taxes.

If the top 400 earners had been taxed in 2007 at the 1995 rate, they would have paid an additional $18.4 billion in taxes, enough to cover the entire 2010 budget shortfall of the state of California.

About three quarters of income for earners in this tax bracket came from capital gains, which were taxed at 15 percent, as opposed to income, which is taxed at a rate of 35 percent for the top bracket.

The top 400 families actually paid lower taxes compared to other high-income earners. In 2005, the Congressional Budget Office found that the top 1 percent as a whole paid a tax rate of 19.7 percent.

The median 20 percent of income earners paid a tax rate of 12.5 percent, including Social Security payments, which are negligible for the very rich.

The IRS report on the top 400 families was first regularly published by the Clinton administration, but the Bush administration shut down its release, according to the tax.com article by Cay Johnston, a tax law professor at Syracuse University. The Obama administration resumed publication of the figures, with the 2006 figures published about a year ago.

Johnston also noted, “At least three hedge fund managers made $3 billion in 2007.” He added, “Only 33 of the top 400 paid an effective tax rate of 30 percent to 35 percent, which is the maximum federal tax rate.”

The data further substantiates the highly publicized conclusions of economists Thomas Piketty and Emmanuel Saez, who found that two thirds of income increases between 2002 and 2007 went to the wealthiest 1 percent of society and that income for the top 1 percent grew 10 times faster than that of the bottom 90 percent. Piketty and Saez found that the top 1 percent of earners got a higher share of income in 2007 than at any time since 1928.

The latest figures come amid constant calls by the White House and Congress to cut social programs in order to balance the budget. The federal government, we are told, has been bankrupted by the “profligacy” of social programs and the proportion of social resources allocated to the general population.

But the latest figures show that the opposite is true. It is the rich who have bankrupted the state, with the full assistance of the two big-business parties.

World Socialist Web Site

Andre Damon is a frequent contributor to Global Research. Global Research Articles by Andre Damon

© Copyright Andre Damon , Global Research, 2010

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules