Average income rose just $59 from 1966 to 2011 for the bottom 90 percent once those incomes were adjusted for inflation… the top 10 percent fared much better, according to a new study of tax data from David Cay Johnston, Pulitzer Prize winner: In 2011 the average AGI of the vast majority fell to $30,437 per taxpayer, its lowest level since 1966 when measured in 2011 dollars. The vast majority averaged a mere $59 more in 2011 than in 1966. For the top 10 percent, by the same measures, average income rose by $116,071 to $254,864, an increase of 84 percent over 1966.
[...] The biggest driver in that disparity, Cay Johnston wrote, was not that the rich were working harder, “but the shift of income from labor to capital and changes in federal income, gift, and estate tax rules.” Indeed, the estate tax has been eased over recent decades and federal income taxes have become more favorable to the wealthy thanks to breaks for investment income. A recent study, in fact, found that the capital gains tax cut, which benefits the wealthy but does virtually nothing for everyone else, was “by far” the biggest driver in the growth of American income inequality.
Other important facts:
- One study found that pay for chief executives increased 127 times faster than worker pay over the last 30 years.
- Official data has shown worker wages stagnating since the 1970s.
- American income inequality now rivals rates from countries like the Ivory Coast and Pakistan.
- the rising inequality has left the bottom 95 percent of Americans saddled with more debt than ever before.
The rise in wealth inequality? It’s permanent: “the advantaged [are] becoming permanently better-off, while the disadvantaged becoming permanently worse-off.” [...] If we were seeing a lot of transient inequality, that would mean the households at the bottom in any given year still have a good shot at improving their lifetime earnings. The fact that the inequality is of the permanent sort shuts the window on that optimistic interpretation: The earners at the bottom are stuck at the bottom, and their lifetime earnings are about as low as one would think. (via Ezra Klein)
With this ever-increasing, permanent inequality, now decades in the making, what’s most important to Republicans? 95% of the GOP-led House voting in favor of Paul Ryan’s Class Warfare Budget:
- Recent analyses have shown that [Ryan's] budget plan’s tax reforms, which lower top tax rates to 25 percent, would give millionaires at least $200,000 in tax cuts. At the same time, it would slash the social safety net, targeting poverty programs for two-thirds of its cuts. (via Travis Waldron)
- Ryan’s budget would end Medicare, cut taxes by over $5 trillion, take health care benefits away from millions of Americans, make “massive” cuts to in programs for low-income and vulnerable Americans, and relies on smoke and mirrors to balance the budget within a decade… It’s designed to satisfy folks who believe the wealthy are over-burdened by taxes and struggling families have too much access to affordable health care. (via Steve Benen)
Unfortunately the non-wealthy, low-info Republican base voters — who have been personally harmed by income inequality just like everyone else — have been successfully programmed to chase the regularly-scheduled and completely manufactured social outrages dangled before them (usually involving guns, God, and gays), instead of paying attention to what their party is actually doing with tax laws and budgets.