# During W Admin, 1/400 of taxpayers got almost one-half of economic gains **URL:** \ **Category:** Great Debates\ **Created:** [August 22, 2007, 3:32pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506 "2007-08-22T15:32:54Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [August 22, 2007, 3:32pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/1 "2007-08-22T15:32:54Z")
The **top** 1/4 of 1%, needless to say. Average income is higher than in 2002 but still lower than in 2000. Story [here:](http://www.nytimes.com/2007/08/21/business/21tax.html?_r=2&adxnnl=1&oref=slogin&ref=business&adxnnlx=1187794888-9PIgIpIy5IDKrnuUUurGKQ) > [@](#): > > While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show. > > \ > > The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000. > > These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000. > > People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich. > > The group’s calculations showed that 28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. Over all, this small number of wealthy Americans saved $21.7 billion in taxes on their investment income as a result of the tax-cut law. > > \ > > The fact that average incomes remained lower in 2005 than five years earlier helps explain why so many Americans report feeling economic stress despite overall growth in the economy. Many Americans are also paying a larger share of their health care costs and have had their retirement benefits reduced, adding to their out-of-pocket costs. > > The White House noted that during the same five years, income tax rates have been cut under a series of laws sponsored by President Bush. Mr. Bush has delivered a steady stream of upbeat assessments of the economy, saying last fall, for example, “I’m pleased with the economic progress we’re making.” > > Tony Fratto, a White House spokesman, attributed the drop in average incomes to “the significant wrenching hits that our economy took in 2001 and 2002, so no one should be surprised that what a bubble economy created in the late 1990s and 2000, where economic data were skewed, would take some time to recover.” > > Mr. Fratto said the fact that nearly all of the growth in incomes was among those in the upper reaches of the income ladder and that the majority of investment tax breaks went to those making more than $1 million “is not a very interesting story.” 1. :dubious: Isn’t it? 2. Are the aftermath of the dot-com bubble bursting and the dislocations of 9/11 really the only important reasons for the stagnation of average income in America? Don’t globalization and outsourcing play some role? 3. How will this picture affect the 2008 elections? ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [August 22, 2007, 3:43pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/2 "2007-08-22T15:43:35Z")
> [@](#): > > During W Admin, 1/400 of taxpayers got almost one-half of economic gains > The top 1/4 of 1%, needless to say. Mission accomplished! ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [August 22, 2007, 4:06pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/3 "2007-08-22T16:06:08Z")
[QUOTE=RTFirefly] Mission accomplished! [/QUOTE] Heh. 😃 That about sums it up. I’m sure wealthy Republican donors are quite happy. ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [August 22, 2007, 4:40pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/4 "2007-08-22T16:40:23Z")
Who cares? These are the folks driving the economy. Without their capital and risk-taking, workers would be worse off. Furthermore, the top 1% of taxpayers pay around 37% of the nation’s income taxes. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 22, 2007, 4:50pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/5 "2007-08-22T16:50:17Z")
[QUOTE=Renob] Who cares? These are the folks driving the economy. Without their capital and risk-taking, workers would be worse off. Furthermore, the top 1% of taxpayers pay around 37% of the nation’s income taxes. [/QUOTE] So, the hundreds of millions of Americans buying cars, houses and clothing, and working, have nothing to do with it? These handful are what really counts? Plus, if income were distributed more equitably they’d pay less tax, and that should make them happy of tax is all that matters. Kind of like the “lucky duckies” too poor to pay much in taxes. I rather suspect no one is forcing them to take their multi-million dollar paychecks for driving stock prices down and mismanaging mortgages. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [August 22, 2007, 4:50pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/6 "2007-08-22T16:50:23Z")
[QUOTE=Renob] Who cares? These are the folks driving the economy. Without their capital and risk-taking, workers would be worse off. [/quote] **With** it, workers don’t seem to be any **better** off. And the rich are going to feel that eventually, because the poor are going to stop shopping and stop paying their mortgages, because they can’t. It’s already started. (Discussed [here](http://www.thenation.com/doc/20070827/ehrenreich) by Barbara Ehrenreich.) [QUOTE=Renob] Furthermore, the top 1% of taxpayers pay around 37% of the nation’s income taxes. [/QUOTE] That sounds plausible, but I’d like a cite. ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [August 22, 2007, 4:58pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/7 "2007-08-22T16:58:48Z")
[QUOTE=BrainGlutton] **With** it, workers don’t seem to be any **better** off. [/quote] I’d certainly say that being employed is much better off than not being employed. > [@](#): > > And the rich are going to feel that eventually, because the poor are going to stop shopping and stop paying their mortgages, because they can’t. It’s already started. (Discussed [here](http://www.thenation.com/doc/20070827/ehrenreich) by Barbara Ehrenreich.) The idea of the coming economic meltdown is, in my opinion, completely overblown. > [@](#): > > That sounds plausible, but I’d like a cite. Here: [Page Not Found - Search - National Taxpayers Union](http://www.ntu.org/main/page.php?PageID=6) > [@Voyager](#): > > So, the hundreds of millions of Americans buying cars, houses and clothing, and working, have nothing to do with it? These handful are what really counts? Of course they count. But without capital to produce and invent these things, there would be a lot less to buy plus a lot fewer jobs to give people money. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 22, 2007, 5:24pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/8 "2007-08-22T17:24:04Z")
> [@](#): > > 1. :dubious: Isn’t it? Isn’t…what? > [@](#): > > 1. Are the aftermath of the dot-com bubble bursting and the dislocations of 9/11 really the only important reasons for the stagnation of average income in America? Don’t globalization and outsourcing play some role? I’d say the dot-com bubble is enough of an explaination. Why are you surprised by this…it seems fairly unsurprising to me. Not very noteworthy either. I assume you understand about a bubble economy, what happenes when it bursts and why later you don’t reach the high water marks of an economy that was unsustainable? Do you have something other than Cluster-Fuck-Nation indicating that globalization and outsourcing are playing a significant role in this? > [@](#): > > 1. How will this picture affect the 2008 elections? I would say, baring a collapse due to the housing market in the next year the Republicans will do quite nicely on the economy. Except among those who are already committed to the Democrats of course. Will it be enough to overcome the negative impact they will take concerning the war? Stay tuned to the next exciting episode to see… -XT ---
**Author:** ![Jophiel](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jophiel/32/66_2.png) [@Jophiel](https://boards.straightdope.com/u/Jophiel)\ **Post date:** [August 22, 2007, 5:30pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/9 "2007-08-22T17:30:54Z")
[QUOTE=Renob] Who cares? These are the folks driving the economy. Without their capital and risk-taking, workers would be worse off. Furthermore, the top 1% of taxpayers pay around 37% of the nation’s income taxes. [/QUOTE] Lower and middle class people who are feeling worse off and more financially unstable but who are told “The economy is doing _great!_”. They might care. ---
**Author:** ![Pleonast](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pleonast/32/1183_2.png) [@Pleonast](https://boards.straightdope.com/u/Pleonast)\ **Post date:** [August 22, 2007, 6:18pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/10 "2007-08-22T18:18:40Z")
These aren’t the numbers you’re looking for. They’re not normalized for the distribution of wealth. What you want to compare is the relative rate of change. A simple example: start with 99 people with $1K income, 1 person with $1M income. Let’s say the economy changes. The 99 poor double their incomes, the millionaire gets a 10% increase. So the poor improve at ten times the rate of the millionaire (100% vs 10% gain). But, looking at the absolute numbers, the millionaire has increased his income by $100K while the poor increase their incomes by a total of $99K. So, the rich 1% of the population has gained 51% of the increase in wealth. So, in this simple example, are the poor better or worse off? The numbers you’ve given us might represent something similar. Or, they may not. ---
**Author:** ![ShibbOleth](https://avatars.discourse-cdn.com/v4/letter/s/848f3c/32.png) [@ShibbOleth](https://boards.straightdope.com/u/ShibbOleth)\ **Post date:** [August 22, 2007, 6:21pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/11 "2007-08-22T18:21:33Z")
You need to look at the big picture. Of those people that didn’t enjoy economic benefits, how many made large donations to Republican campaigns? I’m guessing very few. Serves them cheap bastards right. ---
**Author:** ![Triskadecamus](https://avatars.discourse-cdn.com/v4/letter/t/b19c9b/32.png) [@Triskadecamus](https://boards.straightdope.com/u/Triskadecamus)\ **Post date:** [August 22, 2007, 6:31pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/12 "2007-08-22T18:31:47Z")
Don’t you just love it when they trickle down on you? Tris ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [August 22, 2007, 6:45pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/13 "2007-08-22T18:45:41Z")
[QUOTE=xtisme] Isn’t…what? [/quote] An “interesting story.” Fratto (like **Renob)** is dismissing the differential effects of the tax cuts on different income groups with a “Move on, nothing to see here.” [QUOTE=xtisme] I’d say the dot-com bubble is enough of an explaination. Why are you surprised by this…it seems fairly unsurprising to me. Not very noteworthy either. I assume you understand about a bubble economy, what happenes when it bursts and why later you don’t reach the high water marks of an economy that was unsustainable? Do you have something other than Cluster-Fuck-Nation indicating that globalization and outsourcing are playing a significant role in this? [/quote] If you mean [James Howard Kunstler’s](http://www.kunstler.com/mags_diary21.html) column, he doesn’t blame globalization as such, so much as the (arguably resultant, certainly concomitant) deindustrialization and over-financialization of the American economy. (I recall hearing similar complaints from Lee Iacocca in the '80s.) From his latest entry: > [@](#): > > ``` > The Federal Reserve seems to be manufacturing an impressive supply of "greater fools" to go along with the dribs'n'drabs of credit that it is dropping into the sucking chest wound that the economy has become for the body politic. The Fed's idea, I suppose, is that if they lend a little money to the geniuses who engineered the latest (and probably last) bubble of the cheap oil age to cover their present losses, then the US economy will "right itself." What I think they don't get is that finance has virtually become the US economy -- if you subtract it, there is nothing left besides hair-styling, fried chicken, and colonoscopies. By "righting the economy" do people mean the ability to keep running a transparently fraudulent set of rackets that have nothing whatever to do with financing real productive activity? > > ``` ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [August 22, 2007, 7:08pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/14 "2007-08-22T19:08:33Z")
[QUOTE=Triskadecamus] Don’t you just love it when they trickle down on you? Tris [/QUOTE] I especially like the part where they tell me it’s raining. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 22, 2007, 7:30pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/15 "2007-08-22T19:30:52Z")
[QUOTE=Pleonast] These aren’t the numbers you’re looking for. They’re not normalized for the distribution of wealth. What you want to compare is the relative rate of change. A simple example: start with 99 people with $1K income, 1 person with $1M income. Let’s say the economy changes. The 99 poor double their incomes, the millionaire gets a 10% increase. So the poor improve at ten times the rate of the millionaire (100% vs 10% gain). But, looking at the absolute numbers, the millionaire has increased his income by $100K while the poor increase their incomes by a total of $99K. So, the rich 1% of the population has gained 51% of the increase in wealth. So, in this simple example, are the poor better or worse off? The numbers you’ve given us might represent something similar. Or, they may not. [/QUOTE] If only that were our problem [Here](http://www.chn.org/pdf/2006/2005MedianIncomeCensusDatabyState.pdf) is a comparison of median family income, in 2005 dollars, between 2004-2005 and 2000-2001. (Warning - pdf, but a small one.) The two year 2000-2001 average is $47,084. For 2004-2005 it is $46,071, a statistically significant decrease. Median incomes are particularly useful since it doesn’t reflect the skewing of the mean by the big increase in income for the rich. In your example, the median income would double, while the average income would increase from 10,990 to 12,980, about a 10% increase. The economy is improved, but the rich are getting pretty much all the benefits, while the Republicans whine about how the rest of us don’t appreciate what they’ve done for us. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 22, 2007, 7:34pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/16 "2007-08-22T19:34:53Z")
[QUOTE=Renob] Of course they count. But without capital to produce and invent these things, there would be a lot less to buy plus a lot fewer jobs to give people money. [/QUOTE] Maybe there would be more jobs with higher consumption, and thus higher demand - especially if more income went into savings, and thus investment. Remember, a problem during the bubble was excessive, inefficient, investment. A tax cut that tended to increase the money available for investment, but not for demand, was just plain stupid. A tax cut in 2001 was definitely warranted, but we got the wrong tax cut. ---
**Author:** ![Pleonast](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pleonast/32/1183_2.png) [@Pleonast](https://boards.straightdope.com/u/Pleonast)\ **Post date:** [August 22, 2007, 8:32pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/17 "2007-08-22T20:32:15Z")
[QUOTE=Voyager] If only that were our problem [Here](http://www.chn.org/pdf/2006/2005MedianIncomeCensusDatabyState.pdf) is a comparison of median family income, in 2005 dollars, between 2004-2005 and 2000-2001. (Warning - pdf, but a small one.) The two year 2000-2001 average is $47,084. For 2004-2005 it is $46,071, a statistically significant decrease. Median incomes are particularly useful since it doesn’t reflect the skewing of the mean by the big increase in income for the rich. In your example, the median income would double, while the average income would increase from 10,990 to 12,980, about a 10% increase. The economy is improved, but the rich are getting pretty much all the benefits, while the Republicans whine about how the rest of us don’t appreciate what they’ve done for us. [/QUOTE] You’re missing my point–the numbers give in the OP don’t support a conclusion either way. The numbers you’re providing are useful! Relative change of the median is a good start. Now, if we good get relative change at other percentiles (to compare how someone at the 10th percentile has done versus the 90th, for example), we could have an informed discussion. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [August 22, 2007, 9:19pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/18 "2007-08-22T21:19:19Z")
[QUOTE=Triskadecamus] Don’t you just love it when they trickle down on you? [/QUOTE] It’s Operation _Yellow_ Elephant! ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [August 22, 2007, 9:27pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/19 "2007-08-22T21:27:15Z")
FYI: the 2006 income and poverty numbers are scheduled for release on Tuesday. Check [here](http://www.census.gov/hhes/www/income/reports.html) then; should be a link to the PDF in place by late morning that day. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 22, 2007, 9:36pm UTC](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506/20 "2007-08-22T21:36:33Z")
[QUOTE=Pleonast] You’re missing my point–the numbers give in the OP don’t support a conclusion either way. The numbers you’re providing are useful! Relative change of the median is a good start. Now, if we good get relative change at other percentiles (to compare how someone at the 10th percentile has done versus the 90th, for example), we could have an informed discussion. [/QUOTE] I’ve seen that data also, though not in terms of medians. I can probably figure it out, but it would take more time than I had. However, since there is censoring at the low end, the mean is always going to be higher than the median. We’ve got a long tail at high incomes. And, I agree with you that we’d be willing to accept a big increase in high incomes if there was also an increase at the low end, as in your example. During the bubble, median incomes rose, and there was a tightening of the distribution, though people at the high end did very, very well. Incomes are not a zero-sum game. [Next page](https://boards.straightdope.com/t/during-w-admin-1-400-of-taxpayers-got-almost-one-half-of-economic-gains/416506.md?page=2)