OT US income distribution

I have a quiz here about US income distribution that I want conservatives and liberals to participate in. Two rules, you can not look up the correct answer before you post your guess, and if you know the correct answer, please just post your informed answer without revealing that you are sure that this is the correct answer or revealing the source (pretty please).

I will post the correct answer Tuesday night.

Here is the question. Guess the answer.

The net worth of the top 1% of wealthiest Americans (most recent numbers from 2007) is greater than the combined net worth of

A) The bottom 40%
B) The bottom 50%
C) The bottom 60%
D) The bottom 70%
E) The bottom 80%
F) The bottom 90%

Also, if you voice an opinion, please be respectful of others. You can tear down an argument, but don't tear down the person.

Just by nature of the fact that you've posted this question I'd assume it is (F) the bottom 90% ... which makes sense. The really rich people, are really rich...

Are you sure? That would be saying that just 2.5 million Americans are wealthier than 225 million Americans including all of the upper middle class.



[This message has been edited by Beakybird (edited 11-30-2010).]

Well it should be the 90% since statistically only 5% of people controll 95% of world resources and money.

And they so desperately need a tax break.

chas

And they will. Under Obama, on all income up to $250,000. Under the Republicans, on all income period.

3% of all making over $250,000 are small businesses, the rest are individuals. The 3% figure is agreed on by leaders of both parties: http://voices.washingtonpost.com/plum-line/2010/09/boehner_concedes_only_three_pe.html

Come on people ... we KNOW this is NOT the place for this discussion ... how about taking this to "The Bar" ...
thnx,
t.

Hold on. #1, I put OT in the title of the thread. #2, without opening the thread, it is very clear what the topic is about. If you are not interested in the topic, then you perhaps should ignore it. #3, the topic is pertinent to the overall economy that affects all musicians here in the USA.

#1, yes you did, #2, yes it was, #3, probably true ...
and I did not read the comments, BUT I have seen topics like this on S-Z before, and as musicians, I think we are all very passionate about a lot of things, and unfortunately with subjects like this, people's emotions take over and things are written in the heat of of the moment that become very personal and hurtful and I don't want to see that happening here again ...
So I still respectfully suggest that this discussion be held in "The Bar" ...
t.

Ditto!

OK, I propose that people just answer the quiz without leaving any comments, because they are liable to be divisive.

So just answer A, B, C, D, E, or F.

Anyway, the answer is F. According to the latest numbers available, for 2007, the upper 1% wealthiest Americans had a net worth approximately equal to the lowest 93% of Americans.

Also, the richest 1% of Americans own more stocks, bonds, and mutual funds than the lower 99%.
http://extremeinequality.org/?page_id=8

Beakybird

Interesting thread...

It didn't used to be like that of course. Tax rates as high as 90% on some high earners paved the way for social security, the fabulous 50's and programs like medicare and medicaid.

The founders wrote extensively about the "good of the commons" being of utmost importance. Jefferson especially disliked the notions of corporations and felt they would do society great harm if left unchecked.

So, the richest got taxed the heaviest and for a long time, things worked out pretty well. Then we get to the early 80's, deregulation, trickle down economics and the Laffer Curve foolishness and slashed tax rates. US Corporatacracy has left its ugly marks all over the world while things seem to be turning for the worse here in the US. Poverty is increasing, our personal savings rates have been very poor compared to other countries and let's not forget our debt and lack of an effective health care system.

That's a liberal, somewhat progressive viewpoint. A conservative would say that the founders never intended...not for a second...to take so much wealth from one class and redistribute it to another. People are, for the most part, where they deserve to be.

Jefferson was quite afraid of the USA becoming a class based society, not too different from the land they'd all left.

If Nigel felt compelled to relocate this discussion to the Bar, I'd buy the first round...




------------------
Bill in Dayton

[This message has been edited by Bill in Dayton (edited 11-30-2010).]

why are we so touchy about issues that affect us all, musicians or not. Moving it to 'the Bar' isn't going to make the issue go away. What are we so afraid of? Of being dumb enough to defend tax breaks for the Donald Trumps of the world, while families with small children go hungry and live in unheated apartments. Whatever happened to being 'my brother's keeper'. Why do we feel so compelled to defend and protect the wealth of a class we not only don't belong to, but never will belong to.

Sure, maybe the BAR is the more appropriate place for this discussion, but frankly, I'm disappointed with the eagerness with which we need to make issues that make us uncomfortable, disappear. Look, I don't know (or care) why Beakybird posted this topic, but as long as he did, I'd like to think that I have the freedom to respond to it without immediately freaking everybody out. Want to move it to the BAR where no one will see it? Go ahead. I guess 'out of sight, out of mind' works for some. But it doesn't change a thing.

A few posts ago, everyone was congratulating Scott for posting thought-provoking topics that helped members get to know one another as PEOPLE. Wow, wonder whatever happened to that concept.

chas

Hi Beakybird:

I believe the answer is 90%. Somewhere in the recent past, I've seen this number bandied about on one of the major networks.

I'm probably in the minority here because I believe each and every one of us should have the opportunity and drive to achieve wealth. (Sorry, I didn't make it yet... but I'm still trying.) Nothing wrong with being rich as long as it was achieved honestly.

As far as taxation is concerned, I believe everybody (rich, poor, middle-class, corporate and others) should pay the same low rate. Believing that some should pay more than others sounds awfully close to what Joseph Stalin believed. Paying Tax of any kind is troubling but necessary if a nation or society is to exist. Keeping the rate in check... by eliminating congressional greed is a real problem.

If you believe otherwise, that does not make you a bad person in my eyes. It only means we disagree... and that's healthy.

Dave Rice

The number is close to 93%.

Well the rate on top earners when Eisenhower was in office was 90%. Of course the rich then as they do now had access to many deductions and other accounting tricks, but they did pay a larger percentage in taxes than they do now. Eisenhower was a Republican. I haven't heard many accuse him of being a socialist, but I'm sure many would now.

The percentage of total wealth owned by the upper 1% in 2007 was 34.6%. In 1976 it was 19.9%. I have heard that 4/5 of the economic growth during the Bush years went to the upper 1%.

It sounds sensible that everyone should have to pay taxes. The fact is that the middle class and the poor pay a higher percentage of their income in taxes than the rich do. A middle class family pays a significant percentage of income in sales tax, property tax, and social security tax.

A rich family pays a paltry percentage of income on sales tax, property tax, and they only pay social security tax on the first couple hundred thousand and nothing after that. What percentage of his total income do you think Bill Gates pays in sales tax, property tax, and social security tax? I would bet that it is less than 1/10%.

So if every one paid the same percentage in income tax, that would mean that the middle class and the poor would pay an even higher percentage of their income in taxes than they do now and the rich would pay less.

I think that if 1% of Americans own more stocks, bonds, and mutual funds than the other 99% (which is the case), it's beginning to look like feudalism to me.

Also, when a lot of the wealth is concentrated in areas that aren't producing wealth for the country but sucking wealth from others - like health insurance and financial services - that's not good. These sectors of our economy are humongous. They might provide essential services, but it makes it hard for America to compete with other countries.

This topic tangentially affects all of us musicians, because when the country's wealth is concentrated in fewer hands than ever, it makes it just a little more difficult to find clients with funds to spend on the arts.

It rather amazes me that there are millions of Americans who not only support this reapportioning of wealth from the middle class and the poor (and that's what it has been - a major reapportioning. For example, in the 1970's the upper 1% made 8 times more than the average worker and now it's something like 44 times more), but they are rabid about increasing their privilege.

I brought up this topic because I find the 93% figure staggering. I think we're becoming a banana republic.

Hi Beakybird:

You bring up many valid points. From my perspective, it is flawed logic to compare income between high and low earners from the standpoint of taxation. If all the loopholes were closed or eliminated and there was only one tax... I prefer a national sales tax... then those who spend instead of saving would be paying more.

Our economic system in the U.S. is based largely now on the credit model. This must change if we are to survive. Our greedy congress allows banks (who provide them with support or kickbacks) to charge horrendous rates of interest. It is plain and simple usery.

A simple, clean flat tax system would be fair to all concerned. If individual "A" earns $10 dollars, he pays 10% (assumed rate) and that would be $1.00 The same would apply to the "millionaire." What is wrong with that if all the other junk taxes and loopholes are eliminated?

I don't believe our founding fathers ever envisioned an IRS or CPA's being required to aid one in filing a tax return.

But hey, that's just one man's opinion. Anybody got a better idea?

Dave Rice

A flat sales tax would be so unfair. Let's say you make 1 billion a year, but you spend 1 million a year. You are only paying taxes on 1/1000 of your income. The person who makes 10,000 a year is going to pay a much greater percentage of his pay in taxes no matter how frugal he is. That sounds like an extremely unfair idea.

It might be a good idea to look at other countries that are doing it right - that have high average incomes and low levels of poverty and see what they are doing right. We live in a very insular country, and I think that we have a lot to learn from other countries. For example, the US is #40 in life expectancy. Instead of screaming we're #1, we should maybe look at what those countries whose people are living longer are doing (lifestyle, health care, fighting poverty) and emulate some of their practices where they might fit into our culture and government.

Hello Again, Beakybird:

Let's consider another angle. Put a percentage on all income and ignore the national sales tax. Just don't try to sell me the idea that the poor guy should pay a different percentage. Why would we want to deprive him/her the privilege of being a first class citizen? When I get rich I will have achieved the American Dream. (It's not about to happen being a songwriter... LOL!)

I agree that we should look at what other countries are doing. Some of them are doing quite well at our expense. Some are doing well at the expense of their people. Can you give me an example of a country where taxes are less (including VAT and all that other stuff disguised as fees) 'cause I agree with you. If there is a better model, we should seriously look at it. I don't subscribe to the theory that everthing was invented in America.

I can tell you that I've travelled extensively and I'm always grateful to return home to the States. We are a resourceful people and we can do better... but there are so many people that would give an arm or leg to live here.

Thanks for this interesting post.

Dave

F
And if thngs don't change...we will go to Washington,
Announce the 12 names of the people staying and tell the rest you have 20 minuts to clear all your personal belongs from your desk and be escorted out of the building!
Lee S.

There are three systems of taxation: progressive, regressive, and flat. Progressive taxation means the richer you are the higher percentage you pay. Regressive taxation means that the poorer you are, the higher percentage you pay. Flat tax means everyone pays the same.

We live in a system of regressive taxation. Overall, the middle class and the poor pay a much higher percentage of their income in taxes.

Let's take a couple that makes 40,000 a year together. They are paying so many regressive taxes to support state, local, and federal government. Sales tax is very regressive. Let's say if this couple drinks a beer each every day, they're paying $200 a year in alcohol tax - .5% of their income. The $100 excise tax for each of their dumpy cars comes out to another .5% of their income. The property taxes their landlord passes on to them is regressive. The rich pay a much smaller percentage of their income on property tax. This couple has to pay taxes on utilities and on their cell phones. Every time they fill up their gas tank they have to pay gas tax, another regressive tax where the poor pay a higher percentage of their income.

The federal, state, and local governments in order to not raise taxes have been raising fees. They raise the prices on immigration forms, fishing licenses, fees to enter state and federal parks, registration fees for your child's school. These are regressive forms of taxation where the poor pay a much, much larger percentage of their income on these inflated fees which exist because the politicians don't want to raise taxes.

Let's say one of the people in the couple is a self-employed musician. We have to pay self-employment tax, for what social security. Social security, the way it is set up is a regressive tax - and I'm for social security. But the middle class and most of the poor pay a substantial portion of their income to social security to get, if we're lucky, a few percent of gain per year on our investment. Bill Gates pays about $20,000 to $25,000 per year into social security (just a guestimate), the same as someone making $200,000 a year. The middle class is forced to pay a substantial amount for a program where we get little in return, while the rich pay a fraction of a percent - that they will only get a fraction of a percent back doesn't take away from my point.

So a progressive income tax is only fair in order to make up for all of the regressive forms of taxation that there are in this country. The people who propose a flat tax, they sound fair, but they are not fair. A flat tax would only reapportion more wealth from the poor and middle class to the upper crust.

Forbes did a list of happiest countries, and the US comes in at #14. Take the country at the top, Denmark. Progressive taxation and higher taxes. Longer life spans, less poverty, less crime, better education, better (and cheaper) health care. World class athletic and recreational facilities available to all.

I think the US has become a very mean-spirited country - with all these asinine talking heads leading the discourse. Their message is simple, if you don't have enough money to feed your family, eat sh**.

Beakybird



[This message has been edited by Beakybird (edited 12-03-2010).]

We do have a convoluted system of taxation in this country... and when you add fees, state and local taxes, we may be the highest taxed nation on the planet. I'm not surprised that the US came in at number 14 in the Forbes survey. (I did not actually see the report... since I'm not wealthy enough to subscribe to Forbes... LOL!)

If I were King... our tax situation would change considerably and Marie Antoinette would be resurrected as the "surrogate queen"... LOL! (Let them eat CAKE!)

The solution to our tax problem(s) will probably never occur but it needs to be fair to all and very simple. Surely, there is a middle ground where the wealthy can continue to create jobs for the rest of us and the poor can pay their fair share. Life is never gonna be fair but I wish it could be.

"I think the US has become a very mean-spirited country - with all these asinine talking heads leading the discourse. Their message is simple, if you don't have enough money to feed your family, eat sh**."

BEAKYBIRD
-------------------------------------------

"If I were King... our tax situation would change considerably and Marie Antoinette would be resurrected as the "surrogate queen"... LOL! (Let them eat CAKE!)"

DAVE RICE

--------------------------------------------

Well Dave, looks like you're trying to prove Beakybirds point.

The point is; nearly 22,000,000 jobs were created during the Clinton administration while approximately 1,000,000 were created during the Bush era of tax breaks for the rich. So how many jobs do you think will be created because a billionaire got an extra 20 grand in tax breaks? Funny how we're so willing to throw reason and common sense out the window in the name of ideology.

chas

Good ol' Canada comes in at the 4th happiest country...I'm not surprised.

And, Cape Breton Island is the nicest part, in my opinion.

Probably why we sell so many arrangers here...ha ha.

Ian

Hi Ian! Haven't looked at those styles yet. Working on Xmas tunes.

Here is some interesting statistics from the census bureau:
http://economix.blogs.nytimes.com/2010/12/03/who-needs-a-tax-cut/?src=un&feedurl=http://json8.nytimes.com/pages/business/economy/index.jsonp

Basically, since 1980, median income has gone up 13% and income among the extremely rich, .01% of people, has gone up over 300%.

Since 1980 overall federal tax rates have gone down a few percent when including everyone, but when you look at just the upper 1%, .1% and .01%, their federal taxes have been practically cut in a third to a half.

Beakybird

Hi Charles:

No, I'm not trying to enhance BB's case or defend my own with this statement. Levity is what I was seeking. Look, we have a tax philosphy between the two parties here in the US that will probably never meet in the middle. Mr. Clinton (just plain Bill) obviously got some advice that our current President does not care to access.

In the end, our opinions (yours, mine and BB's plus anyone else in the free world) matter only within our power to influence others. I have no power... only an opinion. Ain't it great that we live in a country where we can disagree amicably?

Dave

Dave-

Clinton didn't care to listen very much until the Mid terms went badly for him and he decided to moderate his Presidency and reach across the aisle.

Remember the first thing he tried to do? That's where DADT came from, which with apologies to my GLBT friends, was a stupid way to expend political capital. Simultaneously, the first lady was pushing her own version of a national health care program and we remember how fast that got killed.

Clinton had no choice. He'd blown his capital stupidly and understood he'd have to govern from the middle if he wanted to get anything done.

Since the new congressmen/senators haven't even been sworn in yet, it might be a tad early to say Obama refusing to triangulate as Clinton did and move more towards the middle.



------------------
Bill in Dayton

Hi Bill:

Your observation is right on the money. After enduring Slick Willie's "reign" in Arkansas... we pretty well had him measured for political obscurity when he "escaped" to Washington so he could hunt interns.

In his defense (and you don't know how it galls me to defend him) he did listen and kept his liberal friends in check to some degree. Thanks for your well made points.

Dave

Much of the reason for the current financial crisis began with Clinton's triangulation. With Republican support, he deregulated the financial industry, and the major financial collapse that occurred wouldn't have happened if he hadn't.

No politician can wage a campaign without the help of the rich, so both parties curry their favor. The Democrats are deferential, the Republicans are rabid about increasing their wealth.

Health care is now 17.3% of the economy and growing. Do you really think that if Clinton passed health care it would be worse?

According to the yearly Commonwealth Fund report:

Despite having the most expensive healthcare system, the United States ranked last overall compared to Australia, Canada, Germany, the Netherlands, New Zealand and the United Kingdom.

The research measured five performance areas: quality, efficiency, access to care, equity and the ability to lead long, healthy, productive lives.

While there is room for improvement in every country, the United States stands out for not getting good value for its healthcare dollar, ranking last despite spending $7,290 per capita on healthcare in 2007 compared to the $3,837 spent per capita in the Netherlands, which ranked first overall.

Netherlands has universal healthcare. If government run healthcare is so horrible, why do they outlive us by about four years when they spend half of what we do per capita on healthcare?

Beakybird

I've been following the work of Dr. Aarron Carroll here---
http://theincidentaleconomist.com/

He's a health systems analyst who's really enjoyable to read...I think you'd enjoy him as well, Beak...

------------------
Bill in Dayton