<p>“I have a huge problem with income redistribution because income is only an issue for people who work for a living and no one should be penalized for working for a living.”</p>
<p>Me too, which is why I think we should tax, and heavily, those who don’t work for a living. And if they don’t like it, let 'em move to Ghangzhou.</p>
<p>And how many is that? My guess is so few it’s just a convenient straw man. My guess would be that 95% plus of upper 2% income people worked for it. Now if you want to call somebody like Bill Gates a non-worker because he made so much he never has to work again, I think that’s wrong.</p>
<p>Even Paris Hilton makes more money doing her thing than she gets from the family.</p>
<p>StitchInTime, in 1986 the median American taxpayer’s (constant-dollar) income was $16,340. In 2005 it was $15,662. Same numbers for the 99th percentile are '86: $134,912, '05: $206,018. 90th %: '86: $47,447; '05: $54,254. By the 75th percentile it’s all gone: '86: $30,678, '05: $31,262. My data source? <a href=“http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html[/url]”>http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html</a>
Individual Income Tax Returns with Positive “1979 Income Concept” Income - SOI Bulletin article - Individual Income Tax Rates and Tax Shares, Table 7. So, no, the “average” American did not participate in the increase in the nation’s wealth during the past 30 years - in fact, the guy at the 50th percentile actually is poorer today than he was in 1986.</p>
<p>Wolf’s draft is interesting, even if some of the data is skewed by the fact that it uses 2001 as the last comparison year (dot-com, remember?). You should actually read the whole thing. If you did, you’d learn that:
You’d also learn that according to Wolf, in 2001 74.3% of all American households had a net worth (including personal residence, financial assets, etc.) of less than $10,000. Or to put it another way, three quarters of all American families are a major illness or layoff away from insolvency. Despite the fact that the bottom 75% hardly contribute, the mean household net worth was $380,000. That’s a lot of dough concentrated in the top end, eh?</p>
<p>Correction: I misread the net worth table in Wolf’s study. Only 30.1% of American households had a net worth below $10,000. The net worth at the 50th percentile fluctuated in a fairly narrow band centered on about $13,000 between 1983 and 1995 before “jumping” to all of $23,000 in 2001. There are no newer figures in the study than 2001. The bottom line is the same as stated in the text: “the only segment of the population that experienced large gains in wealth since 1983 is the richest 20 percent of households.”</p>
<p>I’d suspect that that net worth figure has skyrocketed between 2001 and 2006 as the average value of homes went up significantly (like 30-50% on average) and not everyone took out massive home equity loans. We also had a nice stock runup. With nearly 70% of people owning homes and many also in 401ks etc the increase in wealth was broad and large.</p>
<p>According to the Federal Reserve: “…median real family net worth in the 2001−04 period increased 1.5 percent, but mean net worth rose 6.3 percent.” Of course, when the mean rises relative to the median, that means continuing increase in the stratification of wealth.</p>
<p>Oh, and the Fed gives the current dollar figure “unadjusted” for inflation, as the ones in the Wolf study were. The median household had a net worth of about $93,000 in current dollars in 2004. That’s the house, the IRA, the savings, the whole enchilada - $93,000. That’s your 50th percentile American family. Half of America is below that; 17% have zero or negative net worth.</p>
<p>I didn’t find reference to whether the families were native born, so I’m going to go and read the whole thing later tonight and will report back</p>
<p>I saw a chart on wealth growth through 2005 and the top 40% more or less grew at about 3% annually and it was fairly evenly distributed.</p>
<p>I think a median net worth of nearly $100,000 is pretty good. What is it in other large diverse countries?</p>
<p>Also the average home equity number of over 50% may be lower than historical but we have many more recent homeowners. Also the removal of interest deductions from everything else makes using the HE LOC make more sense than taking out a car loan etc. Back then you could deduct all those interest payments.</p>
<p>Barrons, I can’t comment on an unidentified “chart” you saw, but the actual IRS data I linked to on the last page shows individual income at the 75th percentile - in 2005 that was about $60,000 - has been dead flat for twenty years when adjusted for inflation, fluctuating up and down in a narrow band, never more than 5% either way. Hard to see where 4% annual growth in wealth comes from that - was the chart you saw adjusted for inflation?</p>
<p>A median net worth for an entire family of $93,000 - including home equity, retirements savings, college savings, etc. – in a nation without national health care and the kind of social safety net which exist in most other industrialized nations – isn’t “pretty good.” That means that half the nation’s families are below that level. I know lots of people who have lost more than $93,000 in home equity (i.e. “net worth”) in the past year. It will be interesting to see what the Fed’s next household wealth survey - for 2004-2007 - shows.</p>
<p>Here’s the chart. The Top 1% and the top group between 80%tile and 90th grew about 3%. The top fifth and the next fifth overall grew by similar rates of 2% in constant $s. That covers most families with significant net worth.</p>
<p>Well, I was just looking at the last section. Yes the top 5th did better but the next fifth did OK too. Also many people will be moving from the second fifth to the top fifth as they age and grow assets. You are not locked into one level over time.</p>
<p>Barrons, thank you for the link. The chart (and the source material at EPI which accompanies it) spell out in clear detail exactly what I’ve been talking about. If you look, from 1962 to 1983, the annual growth in wealth of the top quintile was 1.8%. The average growth in wealth for the other 80% was 1.7% - a little less, but the rising tide was in fact lifting all boats. But look at what happened after that. Although the time periods are a little odd (83-89, 89-2001, 2001-'04) making direct comparisons a little tough, the growth in wealth of the top 20% has outstripped that of everyone else by a wide margin - not always as grossly as during the Reagan Administration, where the affluent and wealthy enjoyed 2.7% annual growth in wealth as a group (the top 1% rose 4% per year!)while the bottom 80% only posted nominal gains of 0.2% per year, but always a wide margin nonetheless. In a given year (or period of a few years) may see a little jockeying among the components of the various parts of the quintiles, but the overall trend is unmistakable. And the result is unsurprising: <a href=“http://www.stateofworkingamerica.org/tabfig/05/SWA06_Fig5B.jpg[/url]”>http://www.stateofworkingamerica.org/tabfig/05/SWA06_Fig5B.jpg</a></p>
<p>Again, to me the issue is not so much where we are now, but where we’ll be in twenty or forty years. Do we continue down this path? Or do we regress to the mean? There are active forces at work pushing us farther down the path to increasing stratification of wealth. If we ignore them, we’ll continue down that path. I don’t like thinking about my kids having to deal with the consequences of that trend continuing.</p>
<p><a href=“%5Burl=http://talk.collegeconfidential.com/1059751089-post91.html]#91[/url]”>quote</a>
…face reality: wealth is being redistributed upwards…All of the increase in national wealth which had historically been shared by the poor and middle class has been shifted upwards, to the wealthy, for thirty years… </p>
<p>…The millions saved by UPS due to the driver’s observation? Mr. Productivity may or may not have been thrown a bone by management (“chances are” - gotta love that), but the millions all got sent upstairs. [All</a> that gobbledy-gook](<a href=“http://talk.collegeconfidential.com/1059749348-post90.html]All”>http://talk.collegeconfidential.com/1059749348-post90.html) about paying workers, rewarding shareholders, etc? Remember, for thirty years, none of the net benefit stays at the lower and middle class level. All of it goes upstairs.
<p>Okay, it proves nothing. You got another anecdote you want to post in **bold **? I understand that you want desperately to change the subject, but, the fact remains, that due to conscious legal, tax and policy decisions over the past thirty years, all growth in economic wealth of our nation has been funneled to the upper economic strata, at a tremendous cost to our national debt. It is redistribution of wealth, it did start about 1980, and insisting that reversing that redistribution is “demogogic” is simply name calling. I (and others) post links to numerous studies and records proving the fact of economic redistribution, and you give me an anecdote about one 50 year old guy with a college degree who has done well in his job. Exactly what do you think it “proves?”</p>
You got another anecdote you want to post in **bold **? I understand that you want desperately to change the subject, but, the fact remains, that due to conscious legal, tax and policy decisions over the past thirty years, all growth in economic wealth of our nation has been funneled to the upper economic strata, at a tremendous cost to our national debt. It is redistribution of wealth, it did start about 1980, and insisting that reversing that redistribution is “demogogic” is simply name calling. I (and others) post links to numerous studies and records proving the fact of economic redistribution, and you give me an anecdote about one 50 year old guy with a college degree who has done well in his job. Exactly what do you think it “proves?”</p>![http://www.stateofworkingamerica.org/tabfig/05/SWA06_Tab5.4.jpg[/url]](http://www.stateofworkingamerica.org/tabfig/05/SWA06_Tab5.4.jpg%5B/url%5D){kind=link}
![http://www.stateofworkingamerica.org/tabfig/05/SWA06_Fig5B.jpg[/url]](http://www.stateofworkingamerica.org/tabfig/05/SWA06_Fig5B.jpg%5B/url%5D){kind=link}
