Growth of income inequality a myth? (Help needed.)

[Mimosa]

I need to counter this.

Help, please. :) Please check the graphs at link.

http://opinion.financialpost.com/2010/09/16/terence-corcoran-the-myth-of-inequality/

Excerpt:

For several years now the American left has been fixated on the idea that the United States has become a divided nation in which an aristocracy of the rich, the super rich and the stinking rich have subjugated the poor, the middle class and everybody else, turning America into the equivalent of some pre-Robespierreian France. This Marxist class war message was embedded in President Barack Obama’s first budget: “For the better part of three decades, a disproportionate share of the nation’s wealth has been accumulated by the very wealthy.”

The basis for that claim and others in the Obama budget is the work of Thomas Piketty and Emmanuel Saez, two economists who in recent years have become the darlings of activists and politicians whose prime aim appears to be to foment class envy and promote new higher tax rates and bigger government. One of their graphs appeared in the Obama budget, apparently showing that the “top 1% of earners have been increasing their share of national income” to the point where the stinking rich 1% earn 20% of the total, double their share from 10% in 1980.

Other Piketty-Saez graphs, variation on the same theme, often make their way into the media, including the National Post. On the editorial pages of the Post last Wednesday, one of their iconic illustrations was used to support an op-ed by journalist Timothy Noah and his theme that America had become the United States of Inequality. The graph, reproduced above, appears to prove that income disparity is growing in the United States, with the top 10% of income earners taking up almost 50% of national income, up from 35% in 1980.

Mr. Noah’s op-ed was first published by Slate as part of a series in which Mr. Noah weaves a tangled Wikipedian web of quotations, citations and statistics around the graph to prove that the level of inequality and disparity today in the United States is historical. It takes the country back to the early 20th century, a time when “the socialist movement was at its historic peak, a wave of anarchist bombings was terrorizing the nation’s industrialists.” In American history, says Mr. Noah, “there has never been a time when class warfare seemed more imminent.”

[FormerDittoHead]

1. Never give up! Your instincts serve you well, trust them!

I don't have the time to analyze this right now, but your initial impression is correct - you and I know it is.

I looked at the chart including cap gains, and I must question if those are realized or unrealized gains because most of the stats on income distribution I've seen are derived from simply looking at the tax revenue stats.

OF COURSE the rich pay more taxes - they make the most money! And I can tell you flat out they are much more proactive in avoiding taxes because they can afford to. People living check to check don't have the extra money to hire a tax attorney and set up offshore bank accounts and land swaps.

This is how they do it, by the way. They pay some shill like this to "prove" a given thesis and they put together this narrative, this "frame" and throw out this package of numbers and statistics.

It will be echoed on every single talk radio show coast to coast.

It will be "debated" on the "tubes" weeks and weeks after it is EVENTUALLY disproven. And then it will be cited for YEARS after that, ambushing those who missed the debunking the first time.

I hate these guys.

[Mimosa]

2. Thanks.

I need to debunk this at a conservative site where current Fox news and dittoheads post. YOU get it! :7

I like that you're out about being a former dittohead. I listened for years myself, just to understand . It didn't quite take. *hug*

[Bragi]

7. Good answer there

You wrote:

This is how they do it, by the way. They pay some shill like this to "prove" a given thesis and they put together this narrative, this "frame" and throw out this package of numbers and statistics.

It will be echoed on every single talk radio show coast to coast.

It will be "debated" on the "tubes" weeks and weeks after it is EVENTUALLY disproven. And then it will be cited for YEARS after that, ambushing those who missed the debunking the first time.

Well said. I have come to think that the reason this tactic works is mostly due to neurology.

Our brains work such that when we are presented with "facts" that contradict our "settled views" then we are most likely to just ignore the facts and keep on believin'.

I'm not sure what to do next with that notion, which I believe is scientifically proven to be correct.

Do facts and reason not matter as much as those of us in the reality-based community wish?

If so, then what?

[FormerDittoHead]

12. Already discussed. A good chance to repost this...

http://www.npr.org/templates/story/story.php?storyId=128490874

New research suggests that misinformed people rarely change their minds when presented with the facts — and often become even more attached to their beliefs. The finding raises questions about a key principle of a strong democracy: that a well-informed electorate is best.

[Bragi]

13. Quite so, so what to do?

Seriously, what's this mean at a tactical level?

Should we be giving up on trying to use "fact-based" arguments to win support from people whose views run opposite to our own? Or what?

(And thanks for the link.)

[FormerDittoHead]

15. HERE'S some more info about this...

To lead off with, this article:

http://www.businessinsider.com/why-the-rich-should-support-higher-taxes-2011-7

...has a lot of very relevant information, including many, many charts showing the disparity in income growth.

Next, in reading the article a LITTLE more closely, as you point out, he doesn't cite a lot of sources, however, his main "source" for information is propaganda from the CATO institute.

http://www.sourcewatch.org/index.php?title=Cato_Institute (Sourcewatch is having troubles this morning!)

The REAL kicker in this article is that he INCLUDES Social Security and Medicare as Income!

I'm thinking I can end it right there!

[Jim__]

3. After a quick read, the article doesn't support its assertions with any actual numbers.

He states that the original graph on income distribution is incorrect because it doesn't include taxes and government transfers. So, his point is that if these numbers were included income is much more equitably distributed in the US. To support this, he uses the graph that shows the US taking a greater portion of its tax revenue from the top 10% than any other (listed) nation. This is largely a non-sequitur. To support his claim, he actually has to show the US income distribution after taxes and government transfers. He doesn't do this; either because he doesn't have the numbers - he doesn't know, or the numbers show his claim to be false. In either case, his current comparison is apples to oranges and, letting the original graph be apples, he's comparing it to oranges that he hasn't yet counted.

Re-read the article to see if you agree with me; but that's what I see.

[pampango]

5. I agree. All he does is throw out some ideas, theories and possibilities and provides no figures

to back up his theories.

Either he doesn't know the statistics that would prove/disprove his theories, is too lazy to include them in the article or knows the statistics prove that he is wrong. Rather than try to prove anything, he may be just throwing ideas out there for conservatives to bring up on talk shows and in debates in the hopes that it will sound like sound research and they won't be asked to prove their assertions.

[DefenseLawyer]

4. You work three jobs? Uniquely American isn't it?

I mean, that is fantastic that you're doing that. - George W. Bush, 2005.

[Gormy Cuss]

6. Perhaps Terence Corcoran has heard of another research outfit that has tracked income inequality.

The U.S. Census Bureau. This is an aging report by Arthur Jones and Dan Weinberg but it's still relevant to the discussion:
http://www.census.gov/prod/2000pubs/p60-204.pdf

[TBF]

8. A simple search on Wiki discredits this -

Just about every socio-economic indicator shows that the distribution of income in the United States is becoming increasingly unequal. In 2010, the top 20% of Americans earned 49.4% of the nation’s income, compared with the 3.4% earned by the roughly 15% of the population living below the poverty line. This earnings ratio of 14.5 to 1 was an increase from the 13.6 to 1 ratio in 2008 and a significant rise from the historic low of 7.69 to 1 in 1968.<18> Looking back even further to 1915, an era in which the Rockefellers and Carnegies dominated American industry, the richest 1% of Americans earned roughly 18% of all income. Today, the top 1% account for 24% of all income.

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

[Unvanguard]

9. This article is just nonsense.

Post-tax, the picture of American inequality gets much worse, not better. This is a well-documented fact, having to do with the way our "welfare state," such as it is, is not very redistributive in its orientation. Other countries have similar levels of pre-tax inequality, but do a much better job rectifying distributions post-tax.

[HughBeaumont]

10. Terence Corcoran is Canada's answer to David Brooks.

Rich-man apologist shite from a Republitarian garbage peddler. There is absolutely NO basis in fact with anything he says. Empirical and historical data discredits this bullshit 10 times over - just take a look at my journal. The working class has not made an iota of progress in 30-40 years while the income of the upper crust VAULTED. To add insult, the per-share taxation has actually leveled off between upper and lower income groups.

Amazing.

[Mimosa]

11. Thanks, Hugh.

I'd seen the name, but it didn't ring a bell.

The tea party types are unbelievably brainwashed.

[Yo_Mama]

14. Some of that is unquestionably correct

For instance, most Americans don't grasp that economies with higher taxation in the developed world mostly take those taxes in regressive forms, like the VAT.

So Germans and French and Italians and Canadians get more benefits from their government, but the average person also pays a lot more in taxes.

I say "some" of that is correct because one of things we need to address in the US is tax-shielded income, which has provided quite a bonanza to some very rich people in the US.

No AMT muni bonds, for example, and persons rolling very high income over in retirement plans without taxes.

We do need to broaden the tax base, but doing so by cutting a lot of tax breaks and keeping a lower top bracket rate would be the better way to do that.

We also should raise marginal tax brackets past the SS break, because right now it is ridiculous to have someone hauling in 200K a year paying far less in a marginal tax rate on their last 10K than someone hauling in 75K.

[dissidentboomer]

16. Read the last two or three books by Kevin Phillips. "Bad Money"

was his last one and the book prior to that is called "History of Wealth in America", or something similar. He chronicles, in great detail, the growth of income and wealth disparity in the U.S., focusing on the past 30 years. Phillips is a brilliant man and, believe it or not, a former republican and lawyer in the Nixon white house. However, he is a true patriot and feels compelled to speak the truth, as best he can.