The ever-interesting Matt Nolan looks at the income of the Us top 1% and suggests some of the change may have been income reporting after tax changes in 1986. Perhaps Reagan was to blame for increase income inequality, though not quite in the way that is commonly meant.
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.
Devcat is watching over, but if you notice any problems contact the editors and Devcat will be notified and deployed immediately.
on The Four Stages of Post-election Cruelty(Dudes, I was just kidding about Nathan Hochman. Seriously. Nobody in Colorado Springs knows who he… on The Four Stages of Post-election CrueltyCan I mention the whole commercial where Harris was talking about gender reassignment for prisoners…
on Subject to Change: The Trump Cabinet So FarMeanwhile, John Ratcliffe, who I assume is the Pocahontas villain until proven otherwise, not only s… on Subject to Change: The Trump Cabinet So FarCongratulations q-anon, you managed to get a person under investigating for trafficking a minor acro… on Not Satire: The Onion Buys Infowars with Help from Sandy Hook FamiliesIn case anyone is wondering how that happened, The Onion had a slightly lower bid, but it was litera… on The Four Stages of Post-election CrueltyThere are a lot of ways that the response can be worded… “Oh, who do you think we should have abando… on The Four Stages of Post-election CrueltySo I think it was enough on the radar. Jaybird, something like 50% of stuff that was 'on the radar'…
on The Four Stages of Post-election Cruelty“No, Donny, these men are nihilists, there's nothing to be afraid of.“
on He Got Away With ItNo answer to my question above about you being on the jury? How about Biden showering with is daught…
on Open Mic for the week of 11/11/2024And the United States Armed Forces, his own personal army, navy, and airforce and all the intelligen…
November 14, 2024
November 13, 2024
November 12, 2024
November 11, 2024
on The Four Stages of Post-election Cruelty on Open Mic for the week of 11/11/2024 on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty on Series! Recap of World Series of the 2020s
on Series! Recap of World Series of the 2020s
on Open Mic for the week of 11/11/2024 on Open Mic for the week of 11/11/2024 on Open Mic for the week of 11/11/2024
on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty on The Four Stages of Post-election Cruelty
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
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
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
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
There was a joke I heard once, something along the lines of “the economic condition of Cuba is related directly to Fidel Castro’s learning about economics, and he’s a really slow learner”.Report
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
Why 1986 of all years, JamesK? I have a theory, but I’d like to hear yours first…Report
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
I agree with you, on both points.Report
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