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From 2009 to 2012, income for the 1 percent grew by 31.4 percent, while everyone else only saw it grow by 0.4 percent. That means the 1 percent “captured 95% of the income gains in the first three years of the recovery,”.....
Let's see......100% minus 95% equals 5%.....therefore, 99% of American income earners have earned 5% of all income gains nationally in the last 4 years. Meanwhile, inflation has averaged about two percent per year over the last four years (inflation chart here)....which means that 99% of American income earners have seen their incomes as related to purchasing power.....go down over the last four years. Only the top 1%....and all during modern America's worst economic recession.....have seen their incomes, wealth and purchasing power rise significantly these past four years.
Many conservatives have looked at these types of numbers over the last few years and have often claimed that there is nothing to see here. And if there is a discussion to be had over these seemingly disproportionate numbers, conservatives explain that it is because the 1% are our nation's unique and exceptional "makers." Sometimes conservatives, and other defenders of the rich getting richer, calmly, and with a straight face, explain to us that at least half of the 99% simply refuse to take responsibility for their own lives....relying on government Santas instead.....and THAT'S why the income disparity gap has gapped even wider these past four years.
And did I mention yet how exceptionally and uniquely hard the top 1% work?
If conservatives, and some who call themselves progressive, acknowledge our national income disparity disgrace at all....it's with the suggestion that the solution to ever-widening income disparity gaps between the top 1% and the 99%.....is....wait for it....lower tax rates on the 1%.
Growth is what's needed, conservatives tell us. Economic growth. And economic growth, we're told, is only possible when taxes are lowered on the "makers" and communist government regulations are reduced or eliminated on the industries owned by the 1%.
Growth is the answer....by gum.....because you see, a rising tide lifts all boats, I've been told. What I can't figure out is.....first: what the hell do boating and tides have to do with economic growth? And second: If the top 1% saw their incomes rise over 30% the last four years, why weren't a larger number of, you know, little boats, also lifted with the 1%'s tide?
Setting aside conservative economic mythology for a minute. Economic growth occurs when the American public....the 99%....has enough disposable income to drive national consumption numbers higher. Yet, U.S. workers, adjusted for inflation, haven't seen an increase in disposable income since 1973. During the last forty years, the yachts of the 1% have risen dramatically while the tree branches the 99% have been clinging to have barely kept their heads above water.
No, our obscene income disparity numbers are not a result of harder working 1%'ers....or the 99%'s laziness or lack of responsibility. No, our exceptional-nation income gap reality has nothing to do with tides or boats...or any of the other fairy dust make-believe that supply siders spout.
The ugly income disparity gap can be attributed to these three factors....
Reason number one: U.S. industries have refused to share productivity gains with their employees over the last 40 years. In the last three years? Forgetaboutit. A subject I'll leave for another time.
Reason number two: Minimum wage. The minimum wage of 1968, again adjusted for inflation, was higher than today's minimum wage.
Reason number three, and this one is the smoking gun: Tax policy. Specifically, capital gains and dividend tax policy. From a study entitled....
Changes in Income Inequality Among U.S. Tax Filers between 1991 and 2006: The Role of Wages, Capital Income, and Taxes
By far, the largest contributor to this increase was changes in income from capital gains and dividends.
The income of the 99% is mostly made up of wages.....so the 99% miss out on the windfall available to the 1% found in current historically low capital gains and dividend tax rates. These low capital gains and dividend tax rates are the "largest contributors" to our nation's obscene income disparity gap.
Take a guess....what segment of all income earners benefit the most from historically low capital gains and dividend tax rates?
Yep....the one percenters.