5 Facts You Should Know About the Wealthiest One Percent of Americans

[jasonxe]

Anyone else believe we don't have a tax problem (to a degree) but a spending problem?

 

[atrasicarius]

Anyone else believe we don't have a tax problem (to a degree) but a spending problem?

We have a waste and a corruption problem. It's not that we spend too much money. It's that we spend it in all the wrong places.

 

[haymarket]

People care about themselves. That's just how it is. And guess what? The government you seem to put so much trust in is full of people who care only about themselves.

I am sure you are correct that people care about themselves. That is a given. I also suspect that we could take that one step further and say that there are people who ONLY care about themselves and nothing else. That is also probably a reality - a sad and pathetic reality - but a reality just the same.

However, a responsible person learns that we live in a society of hundreds of millions of people and we are all interconnected one to the other to one degree or another. The responsible citizen realizes that they cannot long rise while everyone else falls. They cannot long feast at the banquet table stacked high with treats while everyone else starves.

Income and wealth disparity is a problem and needs to be looked at. In a democratic republic where almost all adults can vote, a great and growing income disparity is hardly irrelevant...... unless of course you just don't give a damn about the country and its future.

 

[haymarket]

the way to stop that is the other players have to get better skills

Agreed. There are skills.... and there are skills. The wealthy have indeed employed a variety of them to get to the position they are in today and the rest of us need to learn those skills and better the wealthy at their own game.

Skills .... I rather like that.

 

[cpwill]

Lol, easy. I'll encourage my kids to do that as soon as they graduate from college $75,000+ in debt and are sent out into a market saturated with overqualified competition.

I enlisted as a PFC in the Marine Corps, and I'm managing it. Unemployment for those with degrees is - what, about 4.5%? And unless they were going to an Ivy League, they shouldn't have been taking out 75K in student debt in the first place - if you let them do that, then you owe them for your poor parenting.

 

[cpwill]

Or institute a 100% estate tax so that every starts from an equal point.

excellent idea.


question. my uncle owns a small business - it's worth enough to trigger the estate tax. of course, if your plan is put into play, it has to be broken up and sold to pay the tax, which means all those workers get fired. this, of course, would happen with every small family business. so, how do you justify the serious increases in unemployment that this excellent idea would spawn?

 

[MaggieD]

However, a responsible person learns that we live in a society of hundreds of millions of people and we are all interconnected one to the other to one degree or another. The responsible citizen realizes that they cannot long rise while everyone else falls. They cannot long feast at the banquet table stacked high with treats while everyone else starves.

You've just done a beautiful job of explaining why so many in the world hate the United States. Now! Let's bring that same reasoning right home here to the good ole' USA! Oh, wait. We already have.

 

[haymarket]

You've just done a beautiful job of explaining why so many in the world hate the United States. Now! Let's bring that same reasoning right home here to the good ole' USA! Oh, wait. We already have.

Maggie - you know that despite our political differences your posts make me smile and I like you. But I really do not understand this one. Could you explain it please and tell me how this should make me feel better about the growing income disparity in the USA?

 

[Objective Voice]

This should really be a primer on how to become more wealthy, for lower income earners.

Don't take on too much debt, invest in stocks, bonds and mutual funds, build multiple income streams, etc.
Do what the rich people do and don't complain so much.

You say that but how can the common man in today's economy ever truly hope to get to the income levels illustrated in the OP? I want people who see this as "that's his problem" to really think this through.

Per the pie chart in the OP, 20% of America's population posses 92% of the country's wealth. The top 1% of that 20% posses 42% of the country's wealth. That's nearly 50% of all the wealth in this country concentrated with a handful of people. The argument, of course, will be "well, they took the risks...why shouldn't they reap the rewards?" I really can't argument against that point except to ask "Did they come by their earnings honestly?" Clearly, for many in financial services sectors - banks, housing, investments and insurance - the evidence points to a resounding "NO".

The housing bubble burst in part because of underhanded dealings in all four of the aforementioned financial services sectors. You really don't need to read the book, "Too Big to Fail" to realize this fact. You just needed to pay attention to the headlines that detailed the issues surround subprime mortgages, i.e., the unethical practise of commercial banks underwriting mortgage loans to people they knew couldn't afford them but honoring their contracts anyway, the enourmous risks taken by investment banks at rates that sometimes exceeded ratios of 32:1, and AIG's involvement with investment banks and how they insured credit default swaps and Collateralized debt obligations (CDOs), and how the banks and AIG used off-balance sheet accounting to hide their financial activities from auditors including the Federal Reserve banks. Even the former Treasury Secretary, Hank Paulson, had no idea what some of these banks were doing until he started digging deeper into their books OR people with intergrity come to him with information he otherwise would not have know about that lead him to information that was hidden from him and other auditors. Granted, some homeowners are guilty for taking on more home than they could afford and those such people truly do deserve to have their homes foreclosed on, but those who at one point paid their mortgage on time but fell behind because the company they once worked for suddenly went bust don't deserve to be foreclosed on.

As for the common man's "ability" to become part of the upper crust, the believe has long been held that you get there through investing in your 401K plan. To which I have to ask, "How's that working out for you?" This article from GoToRetirement.com entitled, "Boomer Nest Eggs – A Retirement Myth," is a companion piece to a LATimes article that details how savings and investments for BabyBoomers has decreased by as much as 50% due to the housing bubble.

From the GoToRetirement.com article:

According to a report by the Center for Economic and Policy Research, a liberal Washington think tank, households headed by boomers between the ages of 55 and 65 lost about half of their wealth between 2004 and 2009 as a result of the real estate collapse and the shrinkage of 401(k) retirement accounts

Retirement plans – such as the 401(k) – were supposed to be the retirement income salvation for boomers but that is not the case. Only 1/2 of working Americans even have access to tax-deferred retirement plans and the average pre-crash value of those was only $45,500. That won’t be much help.

From the LATimes piece:

The frequently repeated statistic that 75% of all assets are owned by people over 65 is utterly misleading, because those assets are held in a minority of very rich hands. Nearly half of older Americans receive no income — none — from assets such as stocks and savings accounts. Of those who do, half receive less than $2,000 a year.

Three-fourths of those over 65, according to a report by the nonpartisan Congressional Research Service, have annual incomes, including Social Security, of less than $34,000. Furthermore, household income drops precipitously with every decade, and most of the poor in their 80s and 90s are women, who — unless their husbands possessed vast wealth — are very likely to become poorer when they are widowed.

Bottom line: If you're between the ages of 45-55, you likely fall into the Baby Boomer class. It is your (or rather I should say "OUR" since I fall within that age group) wealth that has been significantly diminished as a result of the mistakes and enormous risks some among the wealth-class have made. Their wrecklessness has been bestowed upon us - ALL OF US! But it's not just our 401Ks that have been impacted; in some cases the value of our homes have also been affected. I'm one of the lucky ones in this category. I live in a neighborhood that hasn't been significantly impacted by the housing bubble. There are only two vacant homes on my block, seven along the full stretch of my street from one end to the next. Moreover, I was looking over my property appraisal reports from the last five years and my property has actually increased in value over the years. Again, I'd say I'm one of the lucky ones.

I just think people need to think and dig alittle deeper into the issues before they pop-off sometimes. Our 401Ks were suppose to be the pathway for participating in the "wealth game" for the common man. Our homes were suppose to be the means bywhich we traded a stack in property equity for "cash value" to also take in a piece of that wealth pie. Unfortunately, neither have panned out exactly as many had hoped. Most people used the equity in their homes to take out cash and just buy stuff or pay down debt. Others, like me, did some home repairs and improvements to raise the value of their homes. Few used that cash value to reinvest in the stock market.

Not all is lost, but for the Baby Boomer generation alot of our nest egg has been depleted. I find that troubling...we all should.

 

[Ikari]

Duh, I can't plan for every single person on the planet.
Like I said though, your always gonna miss 100% of the shots you don't take.

So if your solution is, that there is no hope, throw in the towel and wallow in self pity and misery.

No, my solution is to try to end the corporate capitalist model we currently run under and try to reinstall free market to allow better participation. Luck will always be part of the equation, but in free market hard work is more heavily weighted.

 

[Ikari]

Anyone else believe we don't have a tax problem (to a degree) but a spending problem?

I think it's a bit of both. Taxes are lower now than even under Reagan. We have a big government, and those supporting the Republocrats support the big government. Big government needs big money. So long as you support the size and scope of the government, you're going to have to support paying for it. While there is plenty of reckless spending (such that there is a real spending problem as well), we overall have a much bigger and aggressive government than in the past. To pay for that you need taxes. So in the end, we have tax and spending problems.

 

[atrasicarius]

People care about themselves. That's just how it is. And guess what? The government you seem to put so much trust in is full of people who care only about themselves.

Right. So you make some real government oversight and institute serious penalties for corruption, so that if people care about themselves, they won't **** around with the public's money. That's called incentives.

 

[Karl]

rates what stupidity

the top 1% have 22% of the income yet pay 40% of the income tax

the bottom 50% have about 12% of the income yet pay less than 4% of the income tax. [...]

The only reason you are talking about the federal income tax is that if you include other taxes your class-warfare argument falls apart.

Even the meager 'facts' you present are inaccurate: according to the CBO study which I've already cited (odd, I missed the cite in your claims above; perhaps I should re-read more closely?), the bottom 60% pay only 0.8% of the total individual federal income tax burden, while they pay 14.0% of the total federal tax burden (which includes Social Security, Medicare, Excise taxes, and the individual share of corporate income taxes).

While the top 1% pay 39.1% of the total federal income tax burden, they only pay 28.3% of the total federal tax burden. Interesting how that flips around, eh? Well, not if your argument is based on class warfare, I suppose. So, the intellectually honest 'talking point' is that the bottom 60% pay 14.0% of the total federal tax burden, while the top 1% pay 28.3%.

14%/28% is not as dramatic as your misleading (incomplete) 4%/40% claim, hmm?

Among the GOP-worshipped top 1%, the average total federal tax burden is $543,400 per household. I'm sure that the GOP will only be happy when all households, including those on welfare or working for minimum wage, pay half-a-million per year in total federal taxes... after all, that's only fair, right? :lamo

 

[Karl]

Yes, I have a response. The median hourly earnings of "all" workers in the U.S. was $18.48 in 2009. [...]

By a read of your source, that figure likely includes 'benefits' -- again by a read of your source, these 'benefits' likely include "paid vacations and holidays; life, accident, disability, and hospitalization insurance; retirement plans; and sick pay. "

[...] I think those workers making more than $18.48 an hour should give up some of their earnings so those who make less can make more. Let's redistribute the average earnings of all workers in the United States!! Interested? Hands, please? Anybody?? SOM - #116 - CARPENTER [...]

By definition they already giving up some of those earnings, in that the 'benefits' appear to consist of social insurance payments such as Workman's Comp, Unemployment Insurance, Social Security and Medicare Insurance, Hospital Insurance, Life Insurance, etc -- socialized systems wherein the payor is unlikely to reap exactly the amount of benefit he pays for (most will likely receive less, depending on the program). Ergo, some of those earnings are already being redistributed.

[...] Oh! And, by the way, the average union carpenter makes, probably, twice that. Let's see those union carpenters share some of that wealth!!

In that many social insurance premiums increase as wages increase (Social Security and Medicare, in particular), they already are sharing more of that wealth than their non-union brethren. If I were a GOP-ite, I suppose I could say that the lower-wage non-union workers are not paying their fair share

 

[deltabtry]

but im lazzzzzyyy


(seriously, i am)

LOL..well admitting you have a problem is the first step.

 

[Alyssa]

I am sure you are correct that people care about themselves. That is a given. I also suspect that we could take that one step further and say that there are people who ONLY care about themselves and nothing else. That is also probably a reality - a sad and pathetic reality - but a reality just the same.

However, a responsible person learns that we live in a society of hundreds of millions of people and we are all interconnected one to the other to one degree or another. The responsible citizen realizes that they cannot long rise while everyone else falls. They cannot long feast at the banquet table stacked high with treats while everyone else starves.

Income and wealth disparity is a problem and needs to be looked at. In a democratic republic where almost all adults can vote, a great and growing income disparity is hardly irrelevant...... unless of course you just don't give a damn about the country and its future.

Wealth disparity will always exist as long as there is some type of economy. To eliminate economic inequality, society would need to eliminate economy. As long as money exists, some people will have more than others.

Right. So you make some real government oversight and institute serious penalties for corruption, so that if people care about themselves, they won't **** around with the public's money. That's called incentives.

The government is also corrupt, and can be bought. What do we do about that?

 

[haymarket]

Wealth disparity will always exist as long as there is some type of economy. To eliminate economic inequality, society would need to eliminate economy. As long as money exists, some people will have more than others.



The government is also corrupt, and can be bought. What do we do about that?

Governments can issue policies which can attempt to reduce this disparity. Progressive taxation in one tool. Inheritance taxes are another.

What to do about corruption? Good question. Perhaps the death penalty for both ends of the corruption?

 

[atrasicarius]

The government is also corrupt, and can be bought. What do we do about that?

I had an idea where you make a department to investigate corruption. It would be made up of ordinary civilians, selected at random, like for jury duty. You would spend a couple of weeks investigating some other government agency and checking their records. That would remove most of the potential for things like bribery and cronyism.

 

[Alyssa]

Governments can issue policies which can attempt to reduce this disparity. Progressive taxation in one tool. Inheritance taxes are another.

What to do about corruption? Good question. Perhaps the death penalty for both ends of the corruption?

The thing about progressive taxation is it needs a large government agency to enforce, and the tax code is ridiculously complicated. Furthermore, the wealthy still always find ways to hide their money to avoid paying taxes. And then there's the loopholes and write off. The system is a mess as it is.

The death penalty for corruption? Well you're going to need to be more specific about that.

I had an idea where you make a department to investigate corruption. It would be made up of ordinary civilians, selected at random, like for jury duty. You would spend a couple of weeks investigating some other government agency and checking their records. That would remove most of the potential for things like bribery and cronyism.

That could work if the average American actually gave a half of a damn about the political process, in addition to being educated enough to do such a job. I don't even trust my fellow Americans to be on a jury.

 

[TurtleDude]

Well certainly not Stephen Hawking.



You never can tell and it is certainly not something I place a bet on.

dishonesty is not conceding obvious points because you are afraid that someone who normally disagrees with you will get a "win"

In reality I get a win when you refuse to concede the obvious because you look unreasonable

 

[haymarket]

The thing about progressive taxation is it needs a large government agency to enforce, and the tax code is ridiculously complicated. Furthermore, the wealthy still always find ways to hide their money to avoid paying taxes. And then there's the loopholes and write off. The system is a mess as it is.

The death penalty for corruption? Well you're going to need to be more specific about that.



That could work if the average American actually gave a half of a damn about the political process, in addition to being educated enough to do such a job. I don't even trust my fellow Americans to be on a jury.

Oh I agree the system is a mess and the wealthy cheat like crazy. It just really hard to do anything about it when one side has their nose up the rear corridor of the wealthy and they tell you its the freshest smell since labor demonstrators were gassed years ago.

 

[TurtleDude]

Oh I agree the system is a mess and the wealthy cheat like crazy. It just really hard to do anything about it when one side has their nose up the rear corridor of the wealthy and they tell you its the freshest smell since labor demonstrators were gassed years ago.

do you have any proof for your claim that the "rich cheat like crazy"

 

[haymarket]

do you have any proof for your claim that the "rich cheat like crazy"

Yes. Ask and ye shall receive....

Here is an article from Forbes - hardly a leftist publication. Note the title of the article

Rich Cheat More On Taxes, New Study Shows - Forbes.com

RCH CHEAT MORE ON TAXES NEW STUDY SHOWS

a taste

A new study based on unpublished Internal Revenue Service data shows the rich are different when it comes to paying taxes: They hide more of their income. The previously unreported study estimates that taxpayers whose true income was between $500,000 and $1 million a year understated their adjusted gross incomes by 21% overall in 2001, compared to an 8% underreporting rate for those earning $50,000 to $100,000 and even lower rates for those earning less. (The "net misreporting rate" as the IRS calls it, includes both underreported income and inflated deductions.)


In all, because of their higher noncompliance rates, those with true incomes of $200,000 or more received 25% of all income, but accounted for 40% of net underreported income and 42% of underreported tax in 2001, the new analysis finds. The Slemrod/Johns analysis uses unpublished data from special research audits the IRS conducted on a sample of 45,000 individual returns filed for 2001. It was the IRS' first such research effort since 1988, and it led the agency to estimate the 2001 gross "tax gap" at $345 billion.

and more

Day of Reckoning? Super Rich Tax Cheats Outed by Bank Clerk - ABC News

Hundreds of super-rich American tax cheats have, in effect, turned themselves in to the IRS after a bank computer technician in the tiny European country of Liechtenstein came forward with the names of US citizens who had set up secret accounts there, according to Washington lawyers investigating the scheme.

and that just came up in the first few seconds.

 

[TurtleDude]

1) if you don't pay taxes its hard to cheat

2) people paying millions of taxes have more room to cheat than those paying almost nothing

your claim that the rich cheat like crazy was not sustained by those citations. BTW I think the guy from Lichtenstein ought to be whacked.

 

[haymarket]

1) if you don't pay taxes its hard to cheat

2) people paying millions of taxes have more room to cheat than those paying almost nothing

your claim that the rich cheat like crazy was not sustained by those citations. BTW I think the guy from Lichtenstein ought to be whacked.

Urging the criminal assassination of a whistle blower aside ..... you do need to go back and look at that study. It shows that the wealthy cheat on their taxes through hiding income at a rate 160% more than people in lower brackets. 160%!!!! That is staggering. If that is not cheating like crazy- I do not know what would qualify.

And to your paying no taxes comment - the study clearly compared those PAYING TAXES in the 50 - 100K category with those who are wealthy. They WRE NOT comparing those who do not pay taxes because the Republicans let them off the hook with the 2001 & 03 Bush tax cuts.