A kiwi looks at the US top 1%

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James K

James is a government policy analyst, and lives in Wellington, New Zealand. His interests including wargaming, computer gaming (especially RPGs and strategy games), Dungeons & Dragons and scepticism. No part of any of his posts or comments should be construed as the position of any part of the New Zealand government, or indeed any agency he may be associated with.

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10 Responses

  1. Avatar Patrick Cahalan
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    says:

    So tax evasion impacts upon the result.  And it turns out that there was a huge change to the tax system in the US in 1986 – one that would have lead to a reduction in tax evasion (tax evasion that would have lowered the recorded share of income accruing to the top 1% in all prior periods).

    Now there has been an increase in the proportion of income accruing to the top 1% since then – going from 13% to 18% – but this shows us that the low figures of 8% in previous periods are really incomparable … in the “good old days” income looked more equal partially due to tax evasion instead of real equality.

    This is an important fact to keep in mind when we discuss what is going on over in the US of A

    Ah, but the question is: how partially?  Still, good point about structural break points.Report

    • Avatar greginak in reply to Patrick Cahalan
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      says:

      I agree its an interesting break point to look at. The conclusion that, to put it simply, the rich folk were always making out like bandits, they just don’t have to hide it since 1986 doesn’t exactly deflate the leftie/ows argument.Report

      • Avatar James K in reply to greginak
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        says:

        It depends on how much of any given person argument is based on “things are bad” vs. “things are getting worse”.  It’s the latter that Nolan analysis addresses.

        Also it helps once you want to go beyond identifying a problem to diagnosing it.  If the problem is recent, you should focus on what has changed recently.  If the problem is long-standing them recent trends won’t explain very much.Report

        • Avatar Tom Van Dyke in reply to James K
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          says:

          Yes, JamesK, I had the same thought.  I ran across a Jefferson letter to Madison today, reporting from pre-revolutionary France [1782, iirc].  The agrarian-populist was appalled that so much French land was reserved only for game-hunting by the nobles, instead of being farmland for the people.

          And I thought, how far we’ve come: now real estate can be bought by just anyone if they have the money.  In the olden days, land could only be owned by a 1% that was probably more like 0.1%.

           

          Whatever the flaws of capitalism if not “finance,” therein lies the middle and vital ground of liberty, where a man can own his piece of land, the nobles or the state be hanged.

          We notice that [Raul] Castro’s Cuba has just legalized the buying and selling of homes a half-century after the revolution, yes?  I hope we do.  This is no small thing—it’s the endgame of the 20th century and many of its bright ideas.  It should not pass without note.

          http://www.nytimes.com/2011/11/04/world/americas/cubans-can-buy-and-sell-property-government-says.html

           Report

  2. Avatar James K
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    says:

    I would say at most it eliminate the break around 1986, but not the upward trend that exists apart from that break.  So there’s definitely something left to explain.Report

  3. Avatar Katherine
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    says:

    I would agree that this doesn’t explain all (or even most) of the rise in US income inequality since the ’80s, but it is an interesting point.

    Really, though, I just wanted to say that I, also, am a fan of The Order of the Stick.  It’s amazing how attached you can get to stick figures.  A lot of TV shows with actual actors have less characterisation, humor and pathos than that strip.Report

  4. Avatar DensityDuck
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    says:

    I’ve heard people say the same thing about CEO pay; that it hasn’t actually increased that much in absolute-dollar terms, it’s just that lots of things that used to be “executive perks” are now considered reportable salary (and, therefore, taxable.)Report

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