US Income Distribution

[Lafayette]

From this study: The U.S. Income Distribution: Trends and Issues

Key Findings
 Income inequality has increased over the past 40 years. It has increased most relative to the top of the income distribution, but inequality also grew among the lower 80%. In 1975, mean household income in the top quintile (i.e., top 20%) was 10.3 times greater than mean income in the bottom quintile; in 2019, it was 16.6 times greater. However, a less prominent trend of rising inequality can also be seen among households in the lower 80% of the income distribution. In 1975, mean income in the 4th quintile was 5.9 times greater than mean income in the bottom quintile; in 2019, it was 7.3 times greater.
 Inequality was primarily driven by the relatively rapid growth of mean income in the top quintile. Relatively rapid growth in incomes at the top of the distribution was a significant driving factor over this period. Between 1975 and 2019, annualized growth rates were 0.4% for the bottom quintile, 0.6% for the 2nd quintile, 0.7% for the 3rd quintile, 0.9% for the 4th quintile, and 1.5% for the top quintile.
 The pace and pattern of inequality growth has changed over time. Between the mid-1970s and 2000, high-income households experienced rapid real income growth relative to middle- and low-income households, but incomes grew on average for all quintiles. Between 2000 and 2010—a period that includes two economic recessions—average incomes fell in all quintiles of the distribution, and overall income inequality declined modestly. As the economy recovered over the 2010 to 2019 period, average incomes increased for each quintile, but the timing and pace of recovery varied. The top quintile was the first to have positive growth and the quickest to return to its pre-recession average income level. As a result, income inequality grew markedly over this period.
 There are racial and ethnic differences in the distribution of household income. In 2019, 37% of all households (i.e., regardless of race) had annual incomes under $50,000 whereas the share among households with a Black householder (i.e., head of household) or a Hispanic householder was higher. Black-headed households and Hispanic-headed households were less represented at the very top of the distribution, where only 5% of Black-headed households and 5% of Hispanic-headed households had incomes of $200,000 or more, compared to 10% of all U.S. households. Asian-headed households were more uniformly distributed and had higher shares in the top two income groups than White- or Black-headed households.
 Income mobility is limited, but households and individuals have not become significantly less mobile over time. Households (and tax units) do not necessarily stay in a given quintile from year to year; they can move up or down through distributional ranks over time. Such movement throughout the income distribution over time is called income mobility. In general, data from governmental sources reveal three broad trends: (1) households and individuals are not perfectly mobile, i.e., there is a relationship between one’s current rank in the distribution and past rankings; (2) individuals and households are more mobile over longer periods of time, (3) intergenerational mobility varies considerably along several dimensions within the United States.

 

[Loulit01]

Yep. Climate change is problem 1.
Wealth distribution is problem 2.

 

[NatMorton]

Things would be so much better if we were all equally poor.

 

[Loulit01]

Things would be so much better if we were all equally poor.

Why?

 

[NatMorton]

Why?

Because then we would have a GINI score to be proud of an our friends on the left could turn their hand-wringing attention to some other aestheticly unpleasing facet of daily life.

 

[Loulit01]

Because then we would have a GINI score to be proud of an our friends on the left could turn their hand-wringing attention to some other aestheticly unpleasing facet of daily life.

How would that make things better?

 

[OrphanSlug]

Contrary to popular political belief, high taxation alone does not cure this. It only swaps one aristocracy for another, the entire time ignoring economics.

 

[NatMorton]

How would that make things better?

I'd stop worrying about income distribution and start focusing on income mobility. Someone doesn't make less because Jeff Bezos and Warren Buffett are wealthy. In general, someone makes less (i.e. less than they wish to make) because they lack the skills to earn more.

 

[Mycroft]

From this study: The U.S. Income Distribution: Trends and Issues

I know the first thing a lot of people think, when they see numbers such as those presented in this study, is "OMG!!! This is BAD!!! Why doesn't the government DO SOMETHING!!!" I don't think the government has any mandate to "do something" about income distribution. Income distribution is a naturally occurring phenomenon. It's like the weather. Natural economic forces create it.

One thing that can affect income distribution, as that study shows, is group culture. That's why there is a difference between asian and black numbers. Asian culture promotes upward mobility through education and hard work. Black culture promotes victim status and a resistance to education and hard work.

If the government really wanted to effectively affect income distribution, it should be through promotion of improving black culture. btw, "promotion" doesn't mean "force". Black culture won't change because of governmental force.

 

[Loulit01]

I'd stop worrying about income distribution and start focusing on income mobility. Someone doesn't make less because Jeff Bezos and Warren Buffett are wealthy. In general, someone makes less (i.e. less than they wish to make) because they lack the skills to earn more.

Nonsense. You can worry about anything you like. I'm worried about:

A major reason for democratic capitalism’s legitimacy crisis: the gap between this country’s rich and all others grew significantly in the three decades after the fall of the Berlin Wall. Addressing the wealth gap — especially that part which reflects long-standing racial disparities — could help improve opportunity and social mobility for Americans and bolster the political standing of U.S. institutions, at home and globally. We will take on the issue in a series of editorials, beginning with this one.
First, the data: The combined wealth of all households in the United States added up to $129.5 trillion in the first quarter of this year. The wealthiest 1 percent held 32.1 percent of the total, up from 23.4 percent in 1989. The top 10 percent of households owned $70 of every $100 in household wealth, up from $61 in 1989. The bottom half, whose share never exceeded 5 percent, now holds just 2 percent of household wealth in the United States.

https://www.washingtonpost.com/opinions/2021/07/16/us-is-growing-more-unequal-thats-harmful-fixable/

The rise in economic inequality in the U.S. is tied to several factors. These include, in no particular order, technological change, globalization, the decline of unions and the eroding value of the minimum wage. Whatever the causes, the uninterrupted increase in inequality since 1980 has caused concern among members of the public, researchers, policymakers and politicians.

One reason for the concern is that people in the lower rungs of the economic ladder may experience diminished economic opportunity and mobility in the face of rising inequality, a phenomenon referred to as The Great Gatsby Curve. Others have highlighted inequality’s negative impact on the political influence of the disadvantaged, on geographic segregation by income, and on economic growth itself. The matter may not be entirely settled, however, as an opposing viewpoint suggests that income inequality does not harm economic opportunity.

The growth in income in recent decades has tilted to upper-income households. At the same time, the U.S. middle class, which once comprised the clear majority of Americans, is shrinking. Thus, a greater share of the nation’s aggregate income is now going to upper-income households and the share going to middle- and lower-income households is falling.9

The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.

1. Trends in income and wealth inequality

Barely 10 years past the end of the Great Recession in 2009, the U.S. economy is doing well on several fronts. The labor market is on a job-creating

www.pewresearch.org

This is a failed system perpetuated by a broken tax code and leading to a failed state.

 

[Loulit01]

I know the first thing a lot of people think, when they see numbers such as those presented in this study, is "OMG!!! This is BAD!!! Why doesn't the government DO SOMETHING!!!" I don't think the government has any mandate to "do something" about income distribution. Income distribution is a naturally occurring phenomenon. It's like the weather. Natural economic forces create it.

One thing that can affect income distribution, as that study shows, is group culture. That's why there is a difference between asian and black numbers. Asian culture promotes upward mobility through education and hard work. Black culture promotes victim status and a resistance to education and hard work.

If the government really wanted to effectively affect income distribution, it should be through promotion of improving black culture. btw, "promotion" doesn't mean "force". Black culture won't change because of governmental force.

Total BS. The middle-class is shrinking.

 

[Loulit01]

Contrary to popular political belief, high taxation alone does not cure this. It only swaps one aristocracy for another, the entire time ignoring economics.

Not high taxation. Fair taxation.

 

[OrphanSlug]

Not high taxation. Fair taxation.

Fine... Contrary to popular political belief, "fair taxation" alone (what ever the hell that is) does not cure this. It only swaps one aristocracy for another, the entire time ignoring economics.

Until you define these things all you are doing is spamming the forums with study absent any opening comment from yourself or a willingness to tell us how much more any one group should be taxed.

 

[Loulit01]

Fine... Contrary to popular political belief, "fair taxation" alone (what ever the hell that is) does not cure this. It only swaps one aristocracy for another, the entire time ignoring economics.

Wrong. What are you basing that statement on?

Until you define these things all you are doing is spamming the forums with study absent any opening comment from yourself or a willingness to tell us how much more any one group should be taxed.

Wrong. I'm citing sources that define the problem. You're just posting your opinions based on nothing at all.

 

[NatMorton]

Nonsense. You can worry about anything you like. I'm worried about:

A major reason for democratic capitalism’s legitimacy crisis: the gap between this country’s rich and all others grew significantly in the three decades after the fall of the Berlin Wall. Addressing the wealth gap — especially that part which reflects long-standing racial disparities — could help improve opportunity and social mobility for Americans and bolster the political standing of U.S. institutions, at home and globally. We will take on the issue in a series of editorials, beginning with this one.
First, the data: The combined wealth of all households in the United States added up to $129.5 trillion in the first quarter of this year. The wealthiest 1 percent held 32.1 percent of the total, up from 23.4 percent in 1989. The top 10 percent of households owned $70 of every $100 in household wealth, up from $61 in 1989. The bottom half, whose share never exceeded 5 percent, now holds just 2 percent of household wealth in the United States.

https://www.washingtonpost.com/opinions/2021/07/16/us-is-growing-more-unequal-thats-harmful-fixable/

The rise in economic inequality in the U.S. is tied to several factors. These include, in no particular order, technological change, globalization, the decline of unions and the eroding value of the minimum wage. Whatever the causes, the uninterrupted increase in inequality since 1980 has caused concern among members of the public, researchers, policymakers and politicians.

One reason for the concern is that people in the lower rungs of the economic ladder may experience diminished economic opportunity and mobility in the face of rising inequality, a phenomenon referred to as The Great Gatsby Curve. Others have highlighted inequality’s negative impact on the political influence of the disadvantaged, on geographic segregation by income, and on economic growth itself. The matter may not be entirely settled, however, as an opposing viewpoint suggests that income inequality does not harm economic opportunity.

The growth in income in recent decades has tilted to upper-income households. At the same time, the U.S. middle class, which once comprised the clear majority of Americans, is shrinking. Thus, a greater share of the nation’s aggregate income is now going to upper-income households and the share going to middle- and lower-income households is falling.9

The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.

1. Trends in income and wealth inequality

Barely 10 years past the end of the Great Recession in 2009, the U.S. economy is doing well on several fronts. The labor market is on a job-creating

www.pewresearch.org

This is a failed system perpetuated by a broken tax code and leading to a failed state.

Democratic capitalism doesn't have a "legitimacy crisis." What it has is a track record of economic liberation the likes of which the world has never seen before.

 

[OrphanSlug]

Wrong. What are you basing that statement on?

You cannot define "fair taxation," until then all you are doing is throwing rhetoric absent anything of value to discuss.

Wrong. I'm citing sources that define the problem. You're just posting your opinions based on nothing at all.

Defining the problem is step 1, the next step is to offer something economically sound to correct that problem based on the numbers.

So, put on the big boy pants and lets get to it.

 

[bluesmoke]

I'd stop worrying about income distribution and start focusing on income mobility. Someone doesn't make less because Jeff Bezos and Warren Buffett are wealthy. In general, someone makes less (i.e. less than they wish to make) because they lack the skills to earn more.

So, if everyone had those skills, then everyone would be paid more? Whether there's the jobs to use those skills or not? There are already plenty of people with advanced skills that are not in a commensurately paid position because those positions aren't available. That is a simple and obvious fact. You refuse to acknowledge that?

 

[Loulit01]

You cannot define "fair taxation," until then all you are doing is throwing rhetoric absent anything of value to discuss.



Defining the problem is step 1, the next step is to offer something economically sound to correct that problem based on the numbers.

So, put on the big boy pants and lets get to it.

Again, you offer nothing. Let's see your numbers.

 

[NatMorton]

A repost as perspective is so often lacking from the "income gap" scolds.

We've all seen the graphs in the media showing salaries of those in the 90th percentile rising over the last 40 years and those of the lower income percentiles remaining flat. "Unfair!" they shout. "We're heading toward late 18th century France!" they cry. Folks, it's a lie. Income distribution -- in the meaningful sense of the term -- has remain flat over the last 40 years and is even declining some.

Here's the rub. When it comes to income, It doesn't really matter what you earn. It matters what you have to spend. If you earn $500k a year but pay a 40% tax rate, you don't have $500k to spend that year; you have $300k. If you earn $30k a year, but pay little to no taxes and also receive $20k in government aid (tax credits, food stamps, loan forgiveness, etc.) you have more like $50k to spend. The majority of income gap charts you see in the media (and I would wager 100% of those charts shown in the left-leaning press) do not account for taxation and government subsidies. In short, they do not account for the transfer of wealth our government programs already do.

GINI coefficient is a commonly used measure for income inequality. The chart below shows three lines: two (gold and blue) are the US GINI coefficients over time with minor error adjustments to Census data mentioned in the WSJ article (paywall) I copied this from. The third, black line is the historical GINI coefficient for the US when you adjust for wealth transfer.

QED: we do not have rising real income inequality in the United States, and anyone who tells you we do is either misinformed or is lying to you.

source: https://www.wsj.com/articles/incredible-shrinking-income-inequality-11616517284

 

[NatMorton]

So, if everyone had those skills, then everyone would be paid more? Whether there's the jobs to use those skills or not? There are already plenty of people with advanced skills that are not in a commensurately paid position because those positions aren't available. That is a simple and obvious fact. You refuse to acknowledge that?

By and large, people are paid what the market will bear for their skills. If there are no jobs for those skills, it's because those skills are not valued, i.e. needed. That is what I acknowledge.

 

[OrphanSlug]

Again, you offer nothing. Let's see your numbers.

This is your thread, all you have is a "study" that offers very little solutions and an OP from you offering nothing.

So what is your solution to the problem you presented in your own thread?

 

[Loulit01]

A repost as perspective is so often lacking from the "income gap" scolds.

We've all seen the graphs in the media showing salaries of those in the 90th percentile rising over the last 40 years and those of the lower income percentiles remaining flat. "Unfair!" they shout. "We're heading toward late 18th century France!" they cry. Folks, it's a lie. Income distribution -- in the meaningful sense of the term -- has remain flat over the last 40 years and is even declining some.

Here's the rub. When it comes to income, It doesn't really matter what you earn. It matters what you have to spend. If you earn $500k a year but pay a 40% tax rate, you don't have $500k to spend that year; you have $300k. If you earn $30k a year, but pay little to no taxes and also receive $20k in government aid (tax credits, food stamps, loan forgiveness, etc.) you have more like $50k to spend. The majority of income gap charts you see in the media (and I would wager 100% of those charts shown in the left-leaning press) do not account for taxation and government subsidies. In short, they do not account for the transfer of wealth our government programs already do.

GINI coefficient is a commonly used measure for income inequality. The chart below shows three lines: two (gold and blue) are the US GINI coefficients over time with minor error adjustments to Census data mentioned in the WSJ article (paywall) I copied this from. The third, black line is the historical GINI coefficient for the US when you adjust for wealth transfer.

QED: we do not have rising real income inequality in the United States, and anyone who tells you we do is either misinformed or is lying to you.

This is a myth perpetuated by the right and it's been debunked countless times. You talk about tax rates. The tax system is one of the biggest problems. The poor are taxed at a higher rate than the the rich even taking into account government subsidies.

What's Wrong With the American Tax System​

Lack of fairness and poor enforcement are two of a long list of issues​

What's Wrong With the American Tax System

Problems with the U.S. tax system include higher effective rates for lower-income people, companies paying little or no taxes, and poor enforcement.

www.investopedia.com

 

[Loulit01]

This is your thread, all you have is a "study" that offers very little solutions and an OP from you offering nothing.

This is not my thread.

So what is your solution to the problem you presented in your own thread?

Haven't posted a solution. Waiting for you to acknowledge there's a problem.

 

[OrphanSlug]

This is not my thread.

Haven't posted a solution. Waiting for you to acknowledge there's a problem.

This is what happens when I argue without coffee, apologies.

 

[Loulit01]

This is what happens when I argue without coffee, apologies.

It's all right. I'm posting on insomnia and haven't had coffee in a week.